Ask HN: If a Bitcoin crash was to occur, what would it entail?
8 comments
this is applied to the 1 year period
from my understanding, if bitcoin went down 50% based on the value you had invested in the beginning of the year, you pay nothing of taxes, because you had no profit. and you only pay taxes if you sell it.
i frequently trade in the stock market and that's how it works there though.
from my understanding, if bitcoin went down 50% based on the value you had invested in the beginning of the year, you pay nothing of taxes, because you had no profit. and you only pay taxes if you sell it.
i frequently trade in the stock market and that's how it works there though.
Exactly, if you held it for one year or less, it is a considered a short-term gain and is taxed as ordinary income. Depending on your tax bracket for 2017, that could range from a tax rate of 10 percent to 39.6 percent.
https://www.cnbc.com/2017/11/30/bitcoin-investors-beware-the...
https://www.cnbc.com/2017/11/30/bitcoin-investors-beware-the...
The difference in Bitcoin is that it is relatively insulated from other securities. A bitcoin crash would have little to no impact on anything but other coins, and even then the impact would likely be minimal for more stable coins.
And, if Bitcoin did crash for good, another coin would probably take its place.
it crashes all the time.
https://www.bloomberg.com/news/articles/2017-11-16/bitcoin-h...
https://www.bloomberg.com/news/articles/2017-11-16/bitcoin-h...
it crashes all the time
https://99bitcoins.com/bitcoinobituaries/
https://99bitcoins.com/bitcoinobituaries/
same as any other crash: a lot of people would lose unrealized gains and some would have unrealized losses. the use of leverage could exacerbate the fall
Also don't forget our IRS friends, every time you sell a crypto coin to cash out or buy another, you owe Uncle Sam a big junk of your profits - for a holdings less than a year, more likely equal to your income tax bracket and if you think you are anonymous, think again and consider how likely your exchange is to turn all their records to the US government...