Are you contemplating investing in cryptocurrency? Read on to find out everything you need to know about the new Bitcoin Tax and how it may affect you.
In the past decade, cryptocurrency has transformed the ways in which we pay for goods and services both online and in-person. But as a growing number of countries push to accept cryptocurrencies as legal tender, investors and consumers alike were recently taken aback by the news that digital currencies will now be subject to taxes. Continue reading to find out whether or not this is a move in the right direction or has the potential to disrupt the widespread acceptance of cryptocurrency on a global scale.
A brief explanation
If you are a cryptocurrency investor or just interested in purchasing digital assets in the future, it may benefit you to familiarise yourself with everything you need to know about how digital currencies are taxed. As it only recently exploded into the mainstream, it can be difficult to find the information you are looking for online or in person. In the past decade alone, the value of cryptocurrency has fluctuated wildly. For example, if you purchased Bitcoin in 2008 for mere pennies, you could have potentially made millions in 2017 when its value peaked at over five figures. As a UK resident today, however, you must pay tax on profits of over £12,300. As a result, regardless of whether you value cryptocurrency as a valid payment method or investment venture or are just looking to make a quick buck, you must pay tax on your investment profits.
A step in the right direction
With cryptocurrency accepted by a growing number of industries and sectors on a global scale, its newfound tax status could signal a step in the right direction and highlight progress towards it being valued as a valid payment method for both online and in-person transactions. For example, several e-commerce platforms, such as Shopify, and online casinos, such as ggpoker.co.uk, have accepted cryptocurrency as a method of purchasing goods and services for a number of years now. As a result, a growing number of consumers are familiar with the process and would welcome the widespread adoption of cryptocurrency with open arms. It is worth remembering, however, that paying for goods and services with cryptocurrency is different to profiting from your investment of digital currencies.
An emerging market
Cryptocurrency can be traced back to 2008 but it has only experienced mainstream success in the past couple of years. As a result, it is classed as an emerging market with little to no rules and regulations applied to the process of investing or owning digital assets as of yet. If you are an experienced cryptocurrency investor or are only contemplating dabbling in the market, you must keep up to date with any breaking news or updates that could impact your ability to continue investing in cryptocurrency going forward. By failing to do so, you may find yourself unaware of Bitcoin Tax, or any other rules and regulations associated with cryptocurrency, and inadvertently land yourself in hot water with a number of relevant bodies. When it comes to investing in Bitcoin and crypto, you must do your research. This can prevent you from making any costly or time-consuming mistakes and ensure your foray into the cryptocurrency world runs as smoothly as possible.
If you have recently invested in cryptocurrency or are in the process of preparing to do so, it may benefit you to familiarise yourself with the taxes involved. As an emerging market, it can be difficult to keep up to date with any news or updates when it comes to the ever-expanding world of cryptocurrency. As a beginner, however, you should know that Bitcoin Tax is not an option but a necessity.
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