Thread: Bitcoin

Not too crazy about this being in the "infrastructure bill", but exchanges should be reporting this activity to the IRS. I doubt many who trade bitcoin even bother to file taxes properly.

The provision in the roughly $1 trillion plan, approved by the Senate Tuesday, requires brokers of digital assets to report on gains from trading to the Internal Revenue Service. As crafted, it would raise an estimated $28 billion over a decade to help pay for improved roads, bridges, ports and other infrastructure.

https://www.wsj.com/articles/crypto-...k-11628693953?

Boom!

Bitcoin jumps to nearly 5-month high, topping $55,000 on Wednesday

https://www.cnbc.com/2021/10/06/bitc...wednesday.html

I think Bitcoin will soon set a record again and break the $60,000 bar. Also, Solana has been very surprised lately

New bitcoin ETF based off futures? Think about USO and UNG which also hold futures.

I'm seeing many comparisons to this being like the inauguration of the GLD ETF for the price of gold. GLD holds physical gold, so there is no comparison there.

One of the biggest limitations is that the futures ETF cannot hold 100% bitcoin futures. It would also have to hold Treasuries and even cash, while leveraging futures exposure to achieve the target allocation. This could cause the bitcoin futures ETF to perform differently than bitcoin itself.

There is also a substantial roll cost associated with futures-based funds. Because a futures contract is a contract for future delivery, the ETF has to continuously sell the futures contracts in the front month and buy another month out.

https://www.businessinsider.com/bitc...itwise-2021-10

First bitcoin futures ETF rises 3% in trading debut on the NYSE

Ticker Symbol: BITO

https://www.cnbc.com/2021/10/19/firs...ing-debut.html

Paul Tudor Jones says crypto is his preferred inflation hedge over gold right now

KEY POINTS

Billionaire investor Paul Tudor Jones told CNBC on Wednesday he views cryptocurrencies right now as a better hedge against inflation than gold.

“Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment,” he said.

“I’ve got crypto single digits in my portfolio,” Jones said, referring to the percentage of his holdings in cryptocurrencies.

https://www.cnbc.com/2021/10/20/paul...right-now.html

What is the best way to start Bitcoin/Crypto? or should I say, how do I start bitcoin/crypto trading?

If you want to trade, the new ETF BITO or GBTC, preferably in a tax sheltered account.

If you are looking long term, buy the actual "coins".

Originally Posted by Bullitt

If you want to trade, the new ETF BITO or GBTC, preferably in a tax sheltered account.

If you are looking long term, buy the actual "coins".

Thanks Bullitt.
Question: what do you mean buy actual "coins?" Help me out. I am a dummy when it comes to this topic. Any good reference to read for a novice?

Without getting into the weeds with satoshi's and other denominations, the price you see for Bitcoin is the price of 1 coin, but there are no physical coins, it's all digital. You can dump $10 into an exchange and get a fraction of a bitcoin (or any crypto currency for that matter). It's not like Berkshire Hathaway stock where you have to shell out $431,000 for one whole share. In fact, most transactions are fractional transactions, unlike stock which you cannot do (unless your broker somehow allows it).

Unless you hold the actual coins in a wallet (hot or cold), you really don't own the coins. You can buy on Paypal or Venmo, but you can't take the coins off their exchange. Same with the ETF's and trusts, you're just trading on the price. Some Gold ETF's allow you to take physical possession of the gold you own via ETF shares. This does not exist yet for any crypto currency and is what much of the fuss the past few years has been about. Kraken and Coinbase allow you to take the coins off their exchanges use elsewhere. If you go the ETF/trust route in an IRA you won't have to worry about taxes which are a nightmare for crypto currency. If you buy coins on Paypal for example, then send them to a friend, your capital gains on the transaction are taxed and it's your responsibility to keep track of all that.

Once again, it all comes down to your goals. Do you want crypto to have a real place in your portfolio? What percent allocation? How will you handle any taxable events? Do you want to take the coins off exchange? Keep in mind any allocation less than 5% will have near zero effect on your total portfolio (TSP, IRA's, taxable accounts, savings, etc.)

There are so many blogs, news articles and books on the topic, I really don't know which direction to send you first. I feel most blogs and news articles are just pumping the price and pushing the FOMO out on everyone else while the writers watch their "wealth" rise. The book, "The Bitcoin Standard" by Saifeden Ammous was a great overview of the topic.