Since the popularity of cryptocurrency is on the rise today, it has become essential to enhance your knowledge about it. In the last year, the valuation of Bitcoin has grown over four times and that of Ethereum by ten times! These are great numbers that have attracted retail investors from around the globe to dip their feet in this intriguing class of assets!
If you’re also planning to dip your toes in this market, we recommended reading the facts listed below. Swyftx will help you obtain a fair idea of the market.
1. You’re Still Liable to Report Your Gains to IRS
New investors might argue that when cryptocurrency is unregulated, why they are expected to pay tax on their profits. It is a fair argument because cryptocurrency is not backed by any regulating body or financial authority. There’s no one to question the nature of your transactions – you may use the money for gambling, buying real estate, or anything you want.
Even so, the Internal Revenue Service (IRS) hopes you to pay tax on the gains you bagged and does everything in its authority to ensure it happens.
In 2017 the IRS triumphed a lawsuit against Coinbase to provide data on more than 14,300 users who carried out more than $20,000 worth of yearly trading from 2013 to 2015. It is an interesting fact because between 2013 to 2015, only 800 to 900 taxpayers notified their earnings, suggesting that many users sidestepped paying taxes.
Although Coinbase is one of the biggest digital coin trading platforms, it had to comply with the court’s decisions!
2. Investors Often Overvalue Latest Technology
You’ll be surprised to know that investors around the globe have a prolonged record of overvaluing the uptake of the latest technology on the market. This fact can be supported by the record of two decades when the investors drove the value of technology companies, such as internet giants, B2B commerce businesses, and 3D printing.
It was observed that investors tend to overvalue recent technology, skyrocketing the worth of their stock, only to find their bubbles shattered some time later. It doesn’t mean that these businesses failed in their area or didn’t make any profits but failed to meet the expectations of the investors.
If these businesses want to succeed in the crypto world, they must integrate blockchain technology into their systems. Failing to do so will lead to the bubble bursting!
3. Cryptocurrency is Prohibited in Some Countries
Yes, there are still many countries that prohibit the use of cryptocurrency as a legitimate mode of payment. In such countries, crypto isn’t legal, and citizens consider Bitcoin a ‘mirage’. It is a hoax, and its future is dense there.
Crypto might be the hottest thing in your country right now, but in some countries, it is not acceptable. It is because of its unregulated and decentralized nature. Since no financial institution or authority is backing its transactions, it is considered unreliable.
Countries banning using online currency for purchasing goods or services or making payments include Bangladesh, Nepal, Ecuador, Morocco, Kyrgyzstan, and Bolivia. You might think this is it to the checklist, but hold that thought! This checklist might extend as Russia is also banning the transactions carried out using crypto for some time.
4. Obstacles to Enter the Crypto World Are Low
You will be surprised to learn that while blockchain technology alters the working of the monetary enterprise to a great extent, there are no prohibitions to enter the crypto world. If you have a basic understanding of the virtual currency market, know about coding, and have enough funds and time, you can certainly step into the online currency market.
Year after year, more and more virtual tokens are being presented into the market, backed by blockchain technology. These coins pose a threat to the existing ones and their blockchain. For instance, Bitcoin is the oldest surviving online token in the market. It has witnessed numerous coins come and go but has managed to stay.
5. Blockchain Technology Offers Several Perks
Blockchain technology is decentralized, implying that it maintains no record of your dealings. It allows you to use the money on anything you like. Besides, online money miners work round-the-clock and seven days a week. So, they can validate the dealings much faster, unlike conventional banking, which closes within eight hours, is open on the weekends, and maintains reserves with it.
Besides the perks listed above, blockchain offers its users complete clarity and authority over their dealings. Regarding the future development of digital tokens, it is only the blockchain members who get to control it or have a say in it.
It is a digital infrastructure of the cryptocurrency, maintaining a decentralized ledger to record all the payments and securely transfer dealings. If you wish to learn more about crypto, you can visit https://www.okx.com/markets/prices.
6. Investing Your Money in Crypto is Very Easy
Virtual currency might come across as a big deal, suited for only technically skilled individuals. But that is not the case at all!
Although investing in crypto was complicated and considered a big deal until a few years ago, the scenario has changed today. It has become a currency with virtual existence – no more than that! You can use it for carrying out various types of dealings and store it in an online wallet. Just like stocks and bonds, you can also use them as an investment tool.
Apart from the points listed above, there are some general facts about cryptocurrency, such as its exceptionally volatile nature and absence of reliable backing. As many youngsters today are looking to risk their money in the digital money market, they need to learn about it as much in detail.
We hope the above listed has provided you with an insight into the crypto world and enhanced your knowledge about its working. If you don’t fully understand the market, we suggest clearing your basics before risking money!