Holders, Hodlers and whatever else you want to call them have been accused of racking up a $25billion tax bill according to research by Fundstrat Global Advisors.
The research, carried out in the wake of the 2017 cryptocurrency boom has concluded that, based on the $168bn in capital gains that had accumulated through the boom, this equates to a 20% tax bill of $25bn. That’s an awful lot of money.
Who has to pay it?
Well that’s murky water isn’t it, who really owes the money and, in that instance, do they really owe the money?
It’s expected that cryptocurrency exchanges will take the hit, amid reports that some of them have made billions in profit this year, what this might cause however is a mass sell-off of assets, in order to fund the tax bill.
Furthermore, if individual investors are targeted with some sort of a tax bill (I’m not sure how logistically possible this is) then further temptation to sell assets will present itself.
Could this be the start of a mass sell-off, of cryptocurrency assets? If so, what will happen to the markets? Well we know if people start buying the currencies again, their value goes up, its volatile though so its difficult to say what will really happen isn’t it.
Well interestingly, according to Reuters:
“Fundstrat believes the outlook for bitcoin should improve after the April 15 tax deadline. It reiterated its mid-year target of $20,000 and year-end forecast of $25,000.”
It seems that they are of the idea that the looming tax deadlines may cause a big dump of coins, which in turn will lead to Bitcoin value specifically jumping up quite rapidly, past it’s incredible heights of 2017.
Will that then just lead to an even bigger tax bill next year? Then what happens the year after?
It’s confusing, it’s hectic and frankly it’s hard work. Let’s stop thinking so far ahead and let’s have a look and see how this ‘tax bill’ is going to be implemented. If people are made to pay and exchanges start to throw currency back into the markets, then things might get interesting.
Either way, I really don’t envy the person whose job it is to go and collect these taxes, that’s for sure.
Featured Image Source: Flickr – Great Photo By TaxCredits.net