Why Increased Taxes On Crypto Are Good For Bitcoin

4 Min Read
723 words

Hey Jesstax payers

They say there is only 3 things that are certain in this world, death, taxes and Bitcoin going to the fucking moon. As cryptocurrency rises out of the primordial ooze and starts to finds its place in the world as a brand new asset class governments are going to want a piece of the action naturally.

While they may not have understood that they need to get on board and start to take a position in Bitcoin if they really want to reap the benefits of the fledgeling asset they'll want to take some of your gains, as they do with any other asset sales.

Countries around the world are adding more regulation and reporting for crypto gains as they have their right to claim capital gains tax when you cash out to their all strings attached value medium known as fiat currency, that I can accept.

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Taxes drive strong hands

As more regulation, especially in western developed nations, pop up, they force investors to think about their position sizing and when they take profits. The fact that you know have to give up a percentage of your crypto gains to the government once you cash out to fiat may encourage crypto investors to start to think twice about selling.

Why sell out at a certain position if you're only going to break even or have a smaller profit margin once you cash out? This encourages even stronger hands to HODL even longer to make a substantial return before they can cash out.

Taxes force HODL'ers to push the price up even higher, and while governments think tax means they take from the crypto space, it actually has the opposite effect and forces capital to remain in crypto longer.

Taxes drive circular economies

If there's one thing, crypto has to go for it then its momentum and innovation. There is now a problem that needs solving, and I am sure there will be solutions shortly for those sitting with crypto gains. Essentially people want to sell and take profits because they want to purchase goods and services that do not accept cryptocurrency.

Taxes on capital gains could force investors to look at alternative means of cashing out to reduce their tax burden and drive circular economies where they pay for goods and services in crypto.

Holders of crypto could purchase gift cards or credit with crypto businesses and only have to pay VAT on their purchases depending on the country you purchase in at the time.

Holders could instead take out loans against their crypto and spend that only to pay it back and instead use debt to avoid tax and still leverage their positions.

You don't have to worry about tax if you never sell

If you're like me, someone so deep down the rabbit hole that I no longer care about fiat and see Bitcoin as the ultimate savings tool and insurance policy then you don't plan on selling ever. If you don't sell, you keep 100% of your sats regardless of what the fiat value is and that to me is an attractive proposition.

In future, we could see countries bite the bullet and realise these wealy individuals are needed, and instead of us having to bend the knee to them, they bend the knee to us with favourable terms.

The ease of moving countries with million or billions has never been easier with crypto. If countries want that economic activity to benefit their nation, they will have to compete for our capital by offering us sweetheart deals.

If you are willing to be location agnostic and willing to hold out for the best deal, then the crypto tax could be a problem you never have to worry about.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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