We are in November 2020, and the craze of Bitcoin still continues. In fact, Bitcoin is showing signs of a second successful rally. Experts are predicting that it might even go further than the previous one.
Having seen the past week’s Bitcoin performance, the players who were watching from the sidelines are now kicking themselves for not entering the market sooner. If they had Invested in Bitcoin, they would have been millionaires by now.
But is the current value of the Bitcoin true value?
It seems that more investors and traders are jumping into the market for only one reason. They think that Bitcoin is an effective hedge to fight against inflation. How much truth is in this content?
Fiat currencies are indeed prone to inflation due to the overprinting of the money. And we already have assets that act as a hedge against inflation. For instance, Gold has always been investors’ first choice of a hedge. If we are considering Bitcoin as a hedge against inflation, does it mean Bitcoin is equivalent to Gold?
No! Bitcoin still has light years to cover before it can be compared to Gold.
Why Bitcoin Faces Challenges To Replace Gold As a Financial Hedge?
Despite what Digital investors say, Bitcoin is still far from becoming a hedge against inflation alongside Gold.
Bitcoin Is Not An Asset; It Is More Like Currency
We all know the fiat currencies are legal tender that is not backed with any physical commodity. Since the 1970s, when the US abandoned the Gold standard, it has become a standard for the other countries as well.
With that being said, it is clear that the Bitcoin definition comes close to the fiat currency. That means there is no way Bitcoin is an Asset. Bitcoin may not be legal tender, but it lacks the backing of any physical commodity.
Hence, you cannot just compare Gold (a universal asset) to a close-to-be currency. Some countries are in the process of creating a government-backed Cryptocurrency to take Cryptocurrency closer to the fiat currency status.
Lack Of Accessible Liquid Market
An asset is the only physical commodity that can be liquidated at any given moment. And when it comes down to asset liquidity, Gold is second to none. You can easily convert Gold into cash at any spot. And the price of Gold is not Bound by the nation’s boundaries.
Can you say the same thing for Bitcoin?
Yes, they are being regulated in the market and are accepted by the retail shop; however, mainstream acceptance will take some time.
The reason why Gold is the most liquid asset is because of its market size. It has been reported that $8 trillion worth of Gold has been mined to date.
Lack Of Security
Security is one of the major concerns of the bitcoin industry. In the past couple of years, the Cryptocurrency industry has gone through several fraudulent activities resulting in billions of worth of Cryptocurrencies stolen. Hence, while security issues are not being fully rectified, Bitcoin’s status being hedged against inflation is compromised.
Bitcoin Value Is Due To Hype
During the pandemic, the value of Bitcoin has seen a gain of 500%. This has made traders and investors worldwide rushing to invest in the Crypto trade market. Could this be just a hype created by the market?
Well, most of the veterans in the hedge industry think so. According to Ray Dalio, Bridgewater Associate thinks that people are making decisions by seeing others. They are not thinking about the future possibilities of the market.
Bitcoins Have No History As Store Value
If we compare the age of Gold and Bitcoin, there is hardly any comparison. Bitcoin has been in the market for only a decade, whereas Gold has been in the market for thousands of years. Over time, Gould has proven itself as one of the best hedges against market crisis and inflation. However, there is no such historical data on Bitcoin and other cryptocurrencies.
It is very important that you understand Gold and Bitcoin’s difference before you start comparing Bitcoin to be an effective hedge alongside Gold. We hope you understood the basic difference between Gold and Bitcoin in terms of both being a hedge. For more, you can visit official site.
Is Trading Bitcoins The New Favorite Side Hustle During The Pandemic?
Is Trading Bitcoins The New Favorite Side Hustle During The Pandemic?
The year is almost over. It seems like with the pandemic effects, 2020 has fast played itself. When the pandemic took the world by shock, most industries were left on their last leg. However, only one industry showed the most development during pandemic.
When fiat currency failed to perform during a pandemic, people were scared that the insatiable global economy would put their livelihood in danger. So to avoid a fiscal deficit, people got attached to the Cryptocurrency transaction. The first three months saw a 30% rise in Crypto traders.
Additionally, Bitcoin is rising in popularity at an acceleration. This has created the best environment for new investors to jump into the whole Crypto trading thing. If you are among those new investors, you can use official site.
Why Is Bitcoin The New Favorite Side Hustle During Pandemic?
There are several pillars that have accelerated the process. Just recently, PayPal has added new features that help their users with the Crypto transaction. This has also played a pivotal role in Bitcoin to become one of the favorite side hustle.
Here are some of the other reasons.
1. Readily Available
The best part of what we like about the Cryptocurrency and Bitcoin is that you do not have to wait for a particular time to enter the market. You can do whatever you want. You just need access to one of the best Crypto Exchange platforms, and you are all set to make trades.
You can even have different wallets that act like online vaults and keep your crypto assets safe and secure. You can trade directly from the Crypto wallets. Just recently, Paypal joined the Crypto trading industry.
You will be able to trade in Bitcoins and can even be a part of the exchange platform. This event has created an uproar in the market because the users now have access to the crypto trades from an authorized platform.
2. Price Of Bitcoin Will Increase
As we are talking about how new investors are showing their interest in Bitcoin investments. That means the market will see a rise in demand for Bitcoin. This will eventually increase the price evaluation of the bitcoin market. This future increase in price is baiting the new investors towards the Crypto trading market.
2020 has seen the Bitcoin Halving event. This has reduced mining rewards. Hence, experts believe that before the 2024 Bitcoin Halving event, Bitcoin’s demand will see its lifetime high price. So, if you are planning to enter the Bitcoin market, it is better that you do it now.
3. Safe And Secure
Cryptocurrencies is supported by Blockchain technology. Blockchain technology follows the concept of a public ledger network. When Cryptocurrency was in its initial phase, and the government had no idea what this was all about, people used this currency for fraudulent activity.
But soon, the government was able to track these illegal activities and put them all under the anti-money laundering act. Since then, developers are working on making the Blockchain network more hack-proof than before.
4. Fast Transaction
The sole purpose of Cryptocurrency and Bitcoin was to provide a network that can work independently with the traditional finance system and will be able to transact money faster than the traditional methods.
To complete one money transfer process through a traditional financial transaction system, you need to wait for a couple of days. But with Bitcoin, you can do one complete transaction within sixty minutes. You can even reduce this time using Bitcoin Fork (Bitcoin Cash) for a couple of minutes.
Additionally, unlike traditional financial transactions, you do not have to pay any extra charges to ant intermediaries.
What Future Bitcoin Holds As A Side Hustle Investment?
Bitcoin is on its second successful rally. Experts are predicting that the price will keep on increasing. Hence, this is the perfect opportunity for the new traders and investors to open their first deals in the market. If you know about any other reasons that might help our readers, we welcome you to put them in the comment section below.
Will Bitcoin Die A Natural Death: What Experts Are Saying
Bitcoin is Back!
For the people who have thought that 2020 might have been the last year, their predictions have been slammed down by the Bitcoins Mad bull run in November. During this run, the price evaluation of Bitcoin exceeded $18,000 for the first after the successful rally in 2017.
Seeing how Bitcoin and other Cryptocurrencies Have performed this year even amid the pandemic chaos has certainly filled the people with hope. Though Bitcoin is repeating the same thing repeated in 2017, experts believe that both scenarios are completely different.
According to the experts, the 2017 rally was in an environment where people hardly knew about Bitcoin and Cryptocurrencies. The market was also not favorable for Bitcoiin as there were only limited methods to regulate the Cryptocurrency and Bitcoin.
What’s The Difference This Time Around?
Most of the traders and investors believe that the Crypto industry has matured over the last three years. Today we can see a broader regulation network than it was in 2017. According to the experts, the main difference between the 2017 rally and the 2020 rally is that the market was regulated with speculation alone back then. But today, the market is driven by billionaires, enterprises, corporations, and silicon valley industries.
For instance, Wall Street incumbent Fidelity set up a new facility for its client to encourage them to invest in Bitcoin and Cryptocurrencies. While on the other hand, PayPal launched a new feature that allows its users to buy, sell, and golf Crypto assets. The Crypto industry has also been joined by world-renowned billionaires like Paul Tudor Jones and Stanley Druckenmiller.
Then there is the pandemic, which has helped the Cryptocurrencies by creating the most favorable environment for them to grow. People have started comparing Bitcoin as a safe-haven alongside gold. This has created a market where investors have flocked towards the Crypto trademark to fight the financial turbulence.
Will Bitcoin Die A Natural Death?
Well, there is nothing written with certainty in the Crypto trading world. Bitcoin itself is a decentralized currency without any central institutional asset backing up. The only thing that backs up Bitcoin is the belief of the people who are investing in Bitcoin. That means, as long as people believe in Bitcoin, it will remain in the market.
However, this might act as a double edge sword. That means when people stop believing in Bitcoin, the whole existence of Bitcoin will be meaningless. Hence, to answer “Will Bitcoin Die A Natural Death?”, you have to comprehend the current market very well. You need to have an idea of what people are thinking before making a Crypto investment.
As of now, we can see a healthy market, where people believe in a future based on Cryptocurrencies in the financial mainstream. Hence, for now, we can say Bitcoin is not going to die anytime soon.
What Are Experts Saying?
There are plenty of predictions made by experts. Some believe that Bitcoin will become one of the best short term investment assets, while something as an alternative to gold. But according to passing entrepreneurs and Crypto traders, the price of Bitcoin will reach a lifetime high.
According to Greenspan, there is a high possibility for Bitcoin to reach its lifetime high price evaluation. He said these words after seeing the performance of the Bitcoin in November 2020.
Pascal Gauthier, CEO of a hardware wallet, predicted that this rally might run longer than the last one. He also added that Bitcoin has matured and has been recognized, making it one of the top digital assets that might be here for a longer period.
The Fate Of Bitcoin
Bitcoin has certainly shown the world that it has the potential to become an alternative to mainstream finances. The only way Bitcoin investment and transactions are manipulated are the number of users making transactions in the market. Hence, the more users in the Crypto trade, the more will be the price evaluation.
If you think that bitcoin’s price is prone to inflation, then let us add that there are only 21 million BTC in the market. Hence, forget about inflation.
If you are interested in owning your fair share of Bitcoin out of 21 Million, visit Golden Profit App.
Bitcoins And Capital Tax Gains: What You Should Know
Bitcoin is now finally taken seriously by the central government and is now added to exchange platforms alongside Dollars and Euros. The US treasury has acknowledged Bitcoin’s existence in the market and how it has helped the economy grow. The central government of the US has now considered Bitcoin trading legal.
At the beginning of its career, Bitcoin grabbed the attention of the traders and investors for the sole purpose of avoiding tax obligations. Bitcoin’s decentralized nature has helped the user with new financial transaction platforms that have helped them save some bucks in taxation.
However, after the successful rally in 2017, the US central authorities were able to see the potential future Bitcoin holds and declare Bitcoin to be a legal trading asset, and the traders and investors dealing with Bitcoin will be liable to pay taxes on their Crypto profits.
In addition to that, authorities were able to gauge the future threat and fraudulent activity that could come around Bitcoin Transaction. This accelerated the whole process.
The central government around the world is now trying to bring the Crypto taxation into regulation. The US Internal Revenue System (IRS) is also in favor of Crypto taxation. As per IRS guidelines, cryptocurrencies behave more like assets rather than currencies. This practice will clear the tax implication on Cryptocurrencies.
Now that Bitcoin and Cryptocurrencies are considered as assets, people holding on to these assets will be taxed accordingly. They have also warned the traders and investors who are holding Crypto assets and are not paying taxes will be dealt with accordingly.
The IRS has made it clear that no matter how small or big a transaction is, you need to show all the transactions at the time of filing tax. Here is a small summary to show on what ground you have to pay tax.
- Selling Bitcoins, Self Mined, to Third parties.
- Selling Bitcoins, Bought from someone to third parties.
- Paying shopping bills in Bitcoin.
- Getting paid in Bitcoins.
When you are buying and selling the Bitcoin in short intervals, it will be considered a short-term gain, and profit will be subject to income tax. The short term gains can include buying and selling Bitcoin on short notice, getting paid in Bitcoin for the work, and making micro-investments.
Long-term gain means that you are buying Bitcoin and then holding it for a long period (At least one year), then the profit you will make from the Bitcoin will be considered property income and will be subject to capital gain tax.
The income tax rate for the long term investment is zero percent if your capital income is less than $78,850. The same capital increases to 15% if the capital gain is more than $78,850 to $434,550.
In conclusion, individual tax pays are lower or even 0% if you invest in the long-term. However, this also reduces the tax deduction on the losses you have accrued on long term investment.
Crypto Tax Implication
Now that you know that crypto profits are taxable, what methods fall under taxable charges? Here is how your Crypto profit will be taxed.
- Trading in Cryptocurrencies: Buying and selling of Cryptocurrencies.
- Exchanging: Exchanging one Cryptocurrencies with the other Cryptocurrencies.
- Receiving payments: Getting paid for the world and services you have offered. Most of the companies even pay their employees a certain part of their salary in Cryptocurrencies.
- Spending Crypto: Paying your utility bills and shopping bills in Cryptocurrencies.
- Cryptocurrencies conversion: Converting Cryptocurrencies into Fiat currencies.
- Bitcoin Mining: Earning Bitcoin reward after successfully mining one block of Bitcoin.
Taxation, reporting, and filing of the Bitcoin are not as simple as you think. For starters, you need to be well informed of the bitcoin’s market price at the time of making trades. Hence, the IRS tries to maintain consistency with the reports, so if you purchased with a day’s high price, you should maintain the same for the sales.
If you are having issues with Crypto payments tracking, just click here. It is a complete platform that helps its user within the trade and lets the user keep track of their transaction and Crypto assets.
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