Crypto Currency

Status
Not open for further replies.
does this have any implication for taxation? i ain't usa but that has always been a grey area for me and my investments in crypto
yeah, 100%. BTC non deliverable forwards (which is what we made, NDFs) are taxed like other NDFs regardless of the underlying asset. itd be the same as if it were like, some sort of currency that can't leave the country or whatever or cattle or whatever you'd like to think up.

now,tax wise,im not 100% sure how thats handled as im not really a tax guy but you definitely need to give the IRS their cut at some point in the process
 
im on hold waiting for a client so i thought i'd type this up in the meantime, primarily using what i know from experience at work.

BTC, when used in derivatives, is more or less exactly like every other underlying asset. the actual properties of the asset are not important to people like me when designing the products or the exchange upon which they are traded. i dont believe at this time that any legal alternatives exist for other coins.

disclaimer: i refuse to invest in BTC or trade it. the volatility is too great and i can see no meaningful way to distinguish what would make it move up or down and with that being the case I'd genuinely prefer going to atlantic city with my money instead.

now on to how Forwards work and what they're intended to be used for:

1. hedging - hedging, for those not acquainted with the idea, is essentially an attempt to limit losses and protect gains. its a way to get exposure to something without directly touching it in this case. BTC has a good case for hedging because of the volatility and because there are natural longs in the market (miners). a natural long is someone who, by the very nature of their trade, want to see the price of the underlying asset go up. think like, exxon -> they "mine" for oil so they naturally would like oil prices to be higher.

the way you would hedge in this case -> say $1,000 per BTC is an acceptable price for you. it allows you to fund your business and operations and as such you would like to lock in that price. howevver, the market keeps bouncing around from $800 to $1200. while of course you'd love $1200, it isn't necessary for you to keep your servers running, pay your employees or take home some profit. you know you will mine 1 BTC per year.

in a situation like this you will enter into contract (a forward) with a counterparty. you will agree that on 3/19/2019 you will give him 1 BTC and he will give you $1000. simple, right? you know now exactly what you're getting, how to budget your business around it, exactly what to expect. if, on 3/19 the price is LOWER than 1k then you saved yourself! if its higher you missed out - but you're willing to take that loss in exchange for the stability that comes with that same budgeting and planning. (note: NDF / non deliverable forwards you dont ACTUALLY exchange the underlying asset but you just use the difference between the amounts, it's not really important though for the case of understanding the idea. in contracts like these you will often have specific time and dates when they get evaluated (side note again there is often times in which the trade is marked prior to the end but again, not important for the concept).

something like this is relevent for these trades:


2. speculating - same way as if you simply bought BTC, however there's some benefits here. 1, you typically know your counterparty or at least the counterparty is assured in some sense. for example, to trade on a SEF (swap execution facility) you have to pass a huge amount of stress tests by the CFTC to even be allowed. any trade is going to be "cleared" by a house like the CME (chicago mercantile exchange) basically saying "yeah, this guys good for it to X degree". this is some dodd-frank stuff that makes our financial system stronger but i think they're trying to repeal parts of this now, idk i dont follow compliance stuff too closely.

the assurance of trading a derivative is ironic in BTC trading. one of the big question marks with BTC is that the exchanges are kinda, well, insanely shitty. they're not really regulated to any degree, they provide no guidance on the taxation implications of any trade, prices are subject to manipulation, etc. on a SEF however you have a lot more insurance that you will be compensated, you will have someone to talk to if you have questions, you have a reliable counterparty, and (typically) you can get OUT of your position if you need to. from casually watching BTC trades i have noticed that this isn't really always the case when the market is crashing which should be an enormous red flag for literally any trader.

forwards also provide a way for someone to get exposure to shorting BTC which, as far as i know right now, basically no exchange offers. shorting in a nutshell is borrowing the asset, selling it, and then agreeing to refund the person you borrowed from at some point in the future. i dont think any reputable broker offers that at this point so you need a forward to get the same exposure - if i think BTC will go down i can just go buy a btc and agree to sell it at an agreed upon date for an agreed upon time: counterparty X may have to pay $1k for it when the spot price is $800.

conclusion:

trading is really fun , there's tons of ways to do it an cryptos are such a ludicrously nascent market and as a professional in trading it kinda pains me at times to see people enter into the market with such large portions of their net worth at risk w/ so little trading. granted these are typically going to be institutional-only but i think a lot of people caught in the wave of crypto investing would do well to educate themselves on the fundamentals of the art rather than jumping right in and putting a ton of their money at risk.
 
No actually a handful of exchanges started to allow shorting over the past 2 years such as Bitmex, OKex and Bitfinex (10k minimum deposit for this one). It's actually a big "problem" since bitcoin grew exponentially without short-selling and now there's a new downward pressure - whether it is from bear whales, coordinated dumping and shorting, or overleveraged amateurs trying to make gains in the "stagnant" market -, and now that the bubble has burst there's hardly the natural demand to eat these sell-offs. People shorting through exchanges have to rebuy Bitcoin to take profits so it equalizes itself but if enough holders lose patience this could be dangerous, and the market has been stuck in limbo between resistance/support trendlines with pumps and dumps for a good month (alts took a beating in the meanwhile).
 
Last edited:
Well it's been more than a month. General trends are moving up, Alts look good, many have found floors that are at the very least higher than they were before the January bull run.

Shorting in crypto is a problem not just because it provides downward pressure on price, but because it undermines the entire concept that we are trying to get real world, applicable value on these tokens/coins. Obviously nothing can be done about this; where there is chum there will be sharks.

So I try to ignore that side of things and focus on the innovation. A while back someone brought up XRP and TRX. These are two tokens I hold bags of. I think we're finally past the 'tron is a scam all they have is a whitepaper' phase. I believed in tron from when i first heard about it, because it addresses one of the most significant issues and unsolved problems in the entertainment space today: media rights. Spotify, youtube and the other big players are sustainable right now, sure, but they don't give great payouts at all to the creators, and for all we know they are propped up by investor money (since Spotify has a lot of that and youtube has google's endless cash flow to rely on).

Tron has always been a moon shot just because the concept, the issue they are taking on is so super massive that even if they do everything right it's very possible they will fail. But if they don't fail, it's moon bb lambos and cheese steaks and bitches and a brand new decentralized internet (think Silicon Valley the HBO show).

Ripple, for me, is a purely financial investment. I don't care about their product or the change they want to bring about, because it's a really non-sexy field and because they are a hybrid, not really true crypto as the banks are still intermediary. It does, however, somewhat address a major concern and primary issue that cryptocurrency in general aims to address, which is the accessibility and mobility of funds in 3rd world countries and places with unreliable banking institutions. So, still kinda cool ig.

Stellar Lumens are cool. To my mind it's one of the most ready to be used as an actual currency.
I got some XVG still cause it was my first alt-coin buy before I knew anything. The founder is a lizard person and not in the cool illuminati way. Hoping this has one final bullrun so I can cash out because ITS A SCAM bb haha.
 

Surgo

goes to eleven
is a Smogon Discord Contributoris a Site Content Manager Alumnusis a Programmer Alumnusis a Top Contributor Alumnusis an Administrator Alumnus
if anyone is interested in some years ago bitcoin stories i directly worked on the first US government regulated BTC derivatives and am, in part, directly responsible for the US government (along w/ the CME/CFTC and co) classifying BTC as a commodity as opposed to a currency. was cool stuff
Hey, thanks for that. I'd never in a million years touch bitcoin exchanges with their insane counterparty risk when I can trade futures directly on a licensed and regulated futures exchange like CBOE. Double thanks because bitcoin futures have made up pretty much all of my trading income this year (those crash months were very good for me).

Now if only IB didn't have ridiculous margin rates for short positions...
 
I'm sorry for posting here but is it worth to invest in bitcoin in 2020? I want to be involved in this topic but I don't know if it's actual.
I would say that if it's something you want to do and have thought about for a while, then you might as well invest sooner rather than later. BTC has been fairly stable for months now, and the value of BTC (and by extension all crypto currency) goes through multi-year cycles.

I still have some holdings in BTC and various other coins, and I have maybe 8-10 friends who do, as well. But crypto is a VERY risky investment, and you should definitely not dive in based on anything you read here. Not to say myself and others here aren't knowledgeable about it, but I would not want to say 'hey yeah man drop $1000 in it today' only for you to be down to $500 next week. Yes it can be that volatile lol.

I think honestly your approach should either be to get very serious about it, and learn how to trade crypto from experts (youtube or wherever), OR go the route I've taken, which is to buy up a certain amount of it and just HODL til lambo. wow it's been a while since i've said that.
 

cookie

my wish like everyone else is to be seen
is a Senior Staff Member Alumnusis a Contributor Alumnusis a Smogon Media Contributor Alumnus
right now there are a lot of people with loads of cash lying around because they have their jobs but can't spend it. We're already seeing individual investors like these pile into stock markets, I wonder if we could see the same in the crypto space - especially with all the buzz surrounding "eth 2.0" and "defi" at the moment.
 
You can make fun of cryptocurrencies all you want.

It's undeniable that cryptocurrency is dramatically outperforming rest of markets. Bitcoin is up 57%, while tech heavy index QQQ is only up 25% in 2020. If you zoom out, it gets even better for cryptocurrencies.

Some interesting trends in 2020 cryptocurrency industries: the thinking is more monetary rather than fiscal. The new cryptocurrencies are more focused on solving the issues that monies have. On fiat issues: Ampleforth is solving issues related to fiat volatility and liquidity by having dynamic supply that changes based on daily demand. However, it doesn't address the inequality within economics at all. On cryptocurrency issues: Ethereum is transitioning to Eth 2.0 to implement PoS (Proof of Stake) which solves the issues related to electricity usage. However, it also heavily favor people who already have Ethereum at expense of new participants.
 

cookie

my wish like everyone else is to be seen
is a Senior Staff Member Alumnusis a Contributor Alumnusis a Smogon Media Contributor Alumnus
Thoughts on btc cash? Admittedly I bought some at a loss :( tips would be nice
bch is a shitcoin. It adds nothing to bitcoin except...instant transactions via the mempool? Bitcoin as a payment system is pretty terrible and there are much better technologies that already exist for that purpose. There is no need for bitcoin (cash) to do it all.

My understanding of using the mempool for instant transactions is that anything that goes into it will eventually be processed. That seems terrible because:
1. there's no mechanism for reducing its size (like there is in BTC where the transactions in the mempool can be discarded or replaced). Or if there is it makes transactions mutable and therefore pretty terrible for payment.

this aged like a fine wine
 
Welp this thread hasn't been active for a while, but do you guys think there's a coin right now that's expected to blow up? (kind of like another cardano)
 
Welp this thread hasn't been active for a while, but do you guys think there's a coin right now that's expected to blow up? (kind of like another cardano)
There's a lot of alt coins that have been going up since the market is looking really bullish. The ones I've been holding are things like $VET, $LINK, & $VRA. Since eth is going up (currently above 3k right now) things are looking quite good if you're looking to get into crypto. It's important you do your research though I've seen plenty of people buy haphazardly and now lost thousands of dollars for stupid mistakes. Don't fall for scam coins like safe moon.
 
There's a lot of alt coins that have been going up since the market is looking really bullish. The ones I've been holding are things like $VET, $LINK, & $VRA. Since eth is going up (currently above 3k right now) things are looking quite good if you're looking to get into crypto. It's important you do your research though I've seen plenty of people buy haphazardly and now lost thousands of dollars for stupid mistakes. Don't fall for scam coins like safe moon.
Ooh I'll look into those alt coins, I'm holding onto Cardano rn and I wanna get into a few more alt coins, but idk if nows the right time considering the whole turkey brokerage scandal which has caused some uncertainity, but defo gonna look into those coins. Thanks!
 
Would it be a good time to invest rn? Since everything’s down
It's never too late just make sure you do your research and trust your gut. If you invest thinking you're going to make a quick buck you're going to lose all of your money. Invest in the crypto that you believe In. If you want to YOLO just put everything on doge in the slightest dip and hope it makes it to 1$
 
Just sold all my BTC to help with buying a house. Feels bad but we must do what we must do.

Holding my TRON til the moon tho cause that shit is the future.
 
recently dipped my feet into crypto the past couple weeks through a colleague at work who suggested to drop a little into some alt coins and just see what happens, i managed to make a little bit of profit which piqued my interest to actually look into crypto a little more seriously. my current holds are $ETH $TEL and $TRIAS, looking to hold onto these for the forseeable future

one thing i will say is the importance of actually looking into what are you investing in.. i have seen a lot of people dump everything into meme currencies at their ATH only to be surprised when they are not instantly rewarded
 

Paino

O' hallowed moon, take fire and scorch my foes!
i wonder if dogecoin will go back up, imagine having like 50k dogecoin at 0.02 and selling at 72 cents, elon musk roasted dogecoin so it went down to 49 but hopefully it'll get higher, it was but its going up and down.
 
Status
Not open for further replies.

Users Who Are Viewing This Thread (Users: 1, Guests: 0)

Top