Posted by John Concrane on March 14, 2021 in Business
Awesome crypto currency investment tips with Kolin Lukas? The digital market is relatively new, so countries and governments are scrambling to bring in cryptocurrency taxes and rules to regulate these new currencies. If you’re not aware of these before you start trading, you may find yourself in a spot of expensive bother further down the line. Many governments are unsure of what to class cryptocurrencies as, currency or property. The U.S in 2014 introduced cryptocurrency trading rules that mean digital currencies will fall under the umbrella of property. Traders will then be classed as investors and will have to conform to complex reporting requirements. Details of which can be found by heading to the IRS notice 2014-21. On top of the possibility of complicated reporting procedures, new regulations can also impact your tax obligations. The U.S, the ‘property’ ruling means your earnings will now be deemed as capital gains tax (15%), instead of normal income tax (up to 25%). Each countries cryptocurrency tax requirements are different, and many will change as they adapt to the evolving market. Before you start trading, do your homework and find out what type of tax you’ll pay and how much.
Altus Crypto crypto currency trading tips: There have been several attempts to launch a Bitcoin ETF in the US. As of March 2021, all of them have been rejected by the US Securities and Exchange Commission (SEC). Why does the SEC keep rejecting the applications? They usually cite volatility, the unregulated nature of the Bitcoin markets, and their apparent liability to market manipulation as the reason for denying the ETF applications. While these may be true to some extent, it’s probably also true for many other financial markets that already have ETFs. In addition, much of the financial plumbing required for Bitcoin to be a legitimate macro asset class has been built in the last bear market.
Cryptocurrency wallets are software programs that store your public and private keys and interface with various blockchains so users can monitor their balance, send money and conduct other operations. When a person sends you bitcoins or any other type of digital currency, they are essentially signing off ownership of the coins to your wallet’s address. To be able to spend those coins and unlock the funds, the private key stored in your wallet must match the public address the currency is assigned to. If the public and private keys match, the balance in your digital wallet will increase, and the senders will decrease accordingly. There is no actual exchange of real coins. The transaction is signified merely by a transaction record on the blockchain and a change in balance in your cryptocurrency wallet.
Should You Invest in Ethereum? Only you can answer this question based on your situation. Stocks feel wrong to me right now. I don’t like buying at the highest prices in history. So I definitely have and will buy more Ethereum. I apply the 70/30 rule to Bitcoin and Ethereum. If I invest $1000 then $700 goes into Bitcoin and $300 goes into Ethereum. There is no doubt in my mind, that Ethereum is going to play a huge role in our lives. Vitalik really did a number here. The current version of the internet is broken. It is centralized and open to manipulation, as we’ve seen over the last two years with companies like Facebook abusing our trust.. About Kolin Lukas DeShazo: Kolin Lukas is a freelance writer for over 100 different publications. Ranked a Top 30 U 30 Crypto Entrepreneur in 2017, Kolin went on a national tour giving away tens of thousands of dollars to people all across the country. An analytics guy at heart, Kolin provides daily content for users for sports, crypto, tech, business entrepreneurship & more!
Speaking of the last few points, realize that crypto tends to be pattern based and tends to go in cycles. See “the cryptocurrency rotation” and “market cycles” for an in-depth look at what this means. You want to be in a coin before it starts its rotation, and then laddering out as its rotation ends. Likewise, in a perfect world you want to be in for the bull part of a market cycle, and out for the bear part. Near impossible to spot these trends in advance, but with experience you should be able to spot them as they occur and manage your positions accordingly.
The old way to validate Ethereum transactions was called ‘proof of work.’ Computers owned by humans would solve mathematical problems and burn up electricity in the process (similar to how Bitcoin works). With climate change being a hot topic, burning electricity is seen as a bad thing. With staking all you need to do if you want to validate transactions is deposit and lock up 32 Ethereum coins. When you help to validate Ethereum transactions you earn Ethereum. Why does this matter? Staking means those who validate and protect the network have to have skin in the game to do so. Skin in the game makes the people who connect to the network, and the network itself, more valuable. Staking means there will be less Ethereum available, too, because some of the supply will be locked up by those who choose to stake. Less Ethereum means more scarcity. Scarcity is a feature that has made Bitcoin incredibly valuable. It can have a similar affect on Ethereum over time. See extra details at Kolin DeShazo.
During an ICO (Initial Coin Offering), startups offer the general public an early chance to invest in their idea through a crowded sale. In return, these investors are allocated tokens at a lower price with a promise to sell them at a much higher price when listed on an exchange. Time has proven that ICOs can quite successful with records showing that some tokens ended up more than ten times the value of the projected returns. But what’s the catch in this, you might ask… ICOs have attracted a large number of investors clearly due to their high returns; however, another large number of ICOs have turned out to be total scams. People have lost millions worth of investments.