Bitcoin/Cryptocurrencies – Digital Gold or Tulip Bulb?

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So the fact that you cannot regulate/monitor transactions - because of the underlying technology/idea of decentralization - does it not make it lucrative to use this as a vehicle for illicit activities - which in turn raises the chances of stricter/knee jerk adverse regulations - which in turn makes the asset prices more volatile and maybe leads to a permanent loss of value.

I feel the tech is tremendous and obviously if used for good can lead to a revolution, but the inverse is also true, maybe in a more horrifying way.

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I believe that investors should look at Altcoins. There are lot of shit coins. But there are some with strong use cases. I recently invested in MarketMove (MOVE). They have a team that’s from Google, McKinsey and Micron, among others.

What I like -

  1. They are building a AI driven contract audit or safety audit. The idea is to do the audit and separate quality coins from rug pulls or shit coins. In simple words, they intend to help investors make better decisions.
  2. Decentralized exchanges don’t have limit order and stop-loss order. The team is likely to introduce this in the coming months.
  3. The current market capitalization is less than $20 million and they intend to raise $5 to $10 million from investors in the coming months. The coin seems undervalued.

Investors should do their own research, but it looks interesting to me and I am invested.

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War on Rugs attempted the same.

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You can ban exchanges and trading cryptos but how can govt ban HODLing. You cannot un-hold without selling. If you sell, you are in violation.

What am I missing?

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(Exchanges that don’t require KYC and DEXs like Sushiswap)

They won’t ban trading. It’s a lucrative industry and Government could tax it and fill their coffers.

Rumor has it that Governments are planning to seal off exit ramps of Regulated Crypto Exchanges to prevent users from using Crypto as Currencies. This will allow them to be tradeable as assets which can later be taxed.
Now its not rocket science to fire up a VPN and use some unregulated exchange to trade crypto and take custody of your coins on a wallet, right?
Wrong. Unregulated exchanges won’t have fiat gateways, so you can only use the existing crypto that you have in your wallet. New Rupee inflows will become impossible as Banks will partner only with SEBI Approved Exchanges.

P2P trading will survive, crypto barter ftw!

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RBI in same opinion

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This is the most bullish thing to happen for Bitcoin after El Salvador’s announcement. If it succeeds Bitcoin’s censorship resistance will go parabolic.

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@Divyanshu_Bagga, @StonePitbull I see most of the so called experts recommends to book profit in crypto before march 31, 2022 due to the new 30% tax.

Also TDS charges are applicable, as per the below link

> While the definition of the term “transfer” in itself encompasses exchange transactions, the proposed TDS provisions also specifically envisage scenarios of barter or exchange where payment is partly or wholly in kind and there is no movement in cash. Therefore, an investor would suffer TDS even in a situation where one uses crypto to buy something or even when one trades one crypto for another.

Would like to know your thoughts on this, am not sure how cryptos in Defi/Metamask holding/transactions will be traced out for TDS?

And your respective action plan if you have any ? I hope staking/hodling will not attract taxes (HODL forever) :slight_smile:

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From what I have read, you will have to pay tax only when you earn an income from transaction, transfer or exchange or crypto or other virtual digital assets. No tax is to be paid for holding crypto. So you can hold it forever without any tax ramifications. Further,
no capital gains tax would arise on the mining of bitcoins. This is because the cost of acquisition of a bitcoin cannot be determined as it is a self-generated asset. Furthermore, it does not fall under the provisions of Section 55 of the Income-tax Act, 1961 which specifically defines the cost of acquisition of certain self-generated assets.

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Not selling out. I’m going to withdraw my coins from exchanges and store them in Wallets like Trustwallet.

For transactions, I will use Decentralized exchanges like Pancakeswap, Quickswap, Tinyman etc.

No plans to cash out. It’s a small portion of my overall portfolio

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Any one can suggest which crypto will be benefited the most due to sanction imposed on Russia.
Rumours are that Russia may opt for crypto for certain transactions.

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None of the cryptocurrencies will be benefited, infact its bearish for Bitcoin if energy crisis goes wild [which will be a natural consequence of sanctions]

They won’t use Crypto, its too volatile. Russia will roll out their CBDC, till then they could strike a deal with China and use Digital Yuan. [if they get banned from SWIFT]

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Last week’s events have made me re-consider some points I made in the previous post. Economic Sanction driven energy crisis could hit Bitcoin harshly, however there is a silver lining. Russia could use the excess energy to become a Bitcoin Mining Powerhouse, which can become a cash cow, if the price rises significantly. Hell, they could even make a transition to the Bitcoin Standard, many possible scenarios.

Current Bitcoin Mining Marketshare by Countries

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All this happening while member nations of NATO struggle with the burden of high inflation caused by soaring energy prices, which might turn NATO Nations Anti-Bitcoin and start Crackdown of Bitcion Miners in a bid to free up energy for better use and ease the stress on utility prices.

They could follow China’s model by completely banning Bitcoin Mining or use Kazakhstan’s playbook.
In mid-October 2021, Kazakhstan shocked the industry by announcing that it was lowering the volume of electricity miners could tap by an incredible 95%, from around 2,000 gigawatt hours, to just 100 gWh. The reason: The huge influx of farms running towering racks of ASIC computers 24/7 was straining its grid to the breaking point, causing outages that darkened homes and shuttered plants. Within months of Kazakhstan’s flowering as one of the world’s leading hubs for mining, its government is uprooting the equipment and people minting coins, sending the displaced searching once again for new, welcoming destinations.

The danger is that as one nation after another bans or limits mining, producers will move to new, initially friendly locales with low power costs, eventually overtaxing their power generation capacity, so that a growing diaspora keeps moving to a shrinking number of places. The fewer the nations open to miners, the bigger the burden on the few that keep taking them.

The US is no stranger to Executive Orders and may implement one to ban Bitcoin entirely, if things spiral out of control. They already banned Gold in 1933. Political Unrest Warning!

What if Bitcion Standard gets realized and US, its allies start competing with Russia in Bitcoin Mining? This is the least likely scenario in my opinion with Inflation on the brink of pushing global economies to Recession.

update : Closed my short position after this event. https://capital.com/crypto-news--eu-rejects-pow-ban-following-backlash

Discl: None of this is investment advice, DYOR before you take positions. I’m short, but its just a small position.

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ANZ is a big deal

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Any ideas folks if this is actually a good idea if the tax slab is 30% already? Keeping in mind TDS thingy too

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You can sell the coins in profit and buy it back immediately, ensuring that your future profits does not include the part made before 31st March.

The bigger problem is finance minister’s statement claiming crypto is not made legal but will be taxed at 30%. Does it mean that government can harass anyone in future who declares crypto capital gains? If so, and booking capital gains from crypto is your primary goal, then you should rethink your investment.

You should not think of Bitcoin as tech stock. It is trying to create a new form of money with a fixed monetary policy. Its adoption threatens a lot of powerful groups whose interest lie in maintaining the current status-quo. Real Estate bubble in India is one such example. It is primary investment for black money which cannot be moved abroad. A lot of politicians and bureaucrats will be unhappy if Bitcoin starts competing for investment against real estate, and we don’t know what hurdles they will try to create for Bitcoin. In short, for something as revolutionary as Bitcoin, the future is going to be very messy. If you are prepared for it, then your chief concern should not be capital gains tax, but understanding how to take self custody of your coins, how to use cold storage to prevent hacking, how to maintain your privacy/anonymity on blockchain, etc.

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Have always been curious about how Japan printed so much money and still ended up with deflation. The idea of three decades of bear market in stocks is quite scary. Can the same happen to US market instead of asset inflation that we are expecting? After all the bullish case for Bitcoin depends on it.

Finally found an article which clears some of my doubts. It’s a good read.

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Several climate activist groups, including Greenpeace and cryptocurrency billionaire Chris Larsen (CEO of Ripple), are launching a campaign called “Change the Code, Not the Climate”, which aims to influence the community of Bitcoin holders to change their thinking, as BTC is already said to use the same amount of energy as Sweden (I’m not kidding)

A new Bitcoin “fork” will be developed, similar to Bitcoin Cash. Which will supposedly be extremely “green” and protect the mother earth. Serious efforts will be made to popularise this new BTC 2.0
The same group claims that changing the Bitcoin code will save 99% of energy.

“The odds of Bitcoin moving to proof-of-stake in the near future are very slim,” John Wu, president of Ava Labs, a team supporting development of the Avalanche blockchain, told Fortune. “Proof-of-work, though energy-intensive, has been fundamental to the philosophy and success of Bitcoin since the beginning.”

Wu notes that Satoshi Nakamoto, the anonymous developer of Bitcoin, mentions proof-of-work in his famous early white paper on Bitcoin as early as the fourth sentence. “Any proposed change to this core feature is highly unlikely to pass.”