Millennials who think they are disrupting the financial system with cryptocurrencies are very likely to get their hands burnt, John Vail, chief global strategist for Nikko AM group, has warned in a strongly worked statement on Forbes.
Vail, the chair of Nikki AM’s Global Investment Committee, said that millennials are going to be at risk of a worldwide clampdown by tax authorities, who are likely to start investigating cryptocurrency tax evasion because they can’t “afford to let cryptocurrencies disrupt their monetary and tax systems.”
Investors are at risk if they fail to declare capital gains and asset disclosure, he said. The tax authorities could easily find ‘names’ of investors, investigating credit charges to cryptocurrencies. Once the benefit of anonymity is removed, Vail believes the cryptocurrency bubble will burst.
He also said that cryptocurrencies are still an investment bubble, even though the price keeps on rising. He also suggests that cryptocurrencies are vulnerable because they are only used for black market trades and money laundering.
Yet other experts have suggested that the high value of cryptocurrencies is unlikely to drop, because they are in such high demand across the globe and they’re also very versatile.
Ripple, for instance, is being used by banks, such as Santander and Bank of America, while Ethereum is at the centre of the growing start-up crowdfunding Initial Coin Offering (ICO).
But Veil is adamant that countries will not let cryptocurrencies undermine their tax and banking systems. As a result, they will eventually act and devalue the current worth of the major cryptocurrencies.
“It is only a matter of time before they react,” Veil said. “The major cryptocurrencies are not worthless, nor is blockchain technology, but their value will be much less when the tax authorities and other regulators act.”
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