The recent success of the cryptocurrency space, which resulted from the growth in price value of significant digital assets like Bitcoin, Ethereum, and a few other assets, continues to be on a high. Fortunately, this success has contributed to the overall adoption of cryptocurrencies in the space like Bitcoin- which is now used to make payments for goods and services. However, at a webcast two days ago, CEO of Ark Invest- Cathie Wood has warned Bitcoin owners to slow down a bit with their digital asset usage to make purchases or trading due to the proposed high crypto tax by the IRS.
Wood believes the investors feel the burden of spending Bitcoin
Speaking at the event, the Chief Investment Officer discussed the fortunes of Bitcoin, describing it as an asset that has given its investors bountiful rewards. The businesswoman believes that the asset’s growth will continue to plummet, as she is optimistic that the asset’s fortunes will favor its investors. However, she expressed her concerns over tax policies concerning the digital asset, as she believed that the holders of the token would have to pay more in taxes, even as they spend it. She has now advised Bitcoin investors, especially those who want to spend it heavily, to slow down a bit as taxes will likely hamper their spending.
Earlier in the week, Elon Musk’s Tesla joined the growing list of businesses that have now announced that they will accept Bitcoin as payment for their goods and services. Wood believes this is a good move and will favor the adoption of Bitcoin by the general society. However, she believes the burden of developments like this will fall in the Bitcoin holders’ hands, who will have to comply with the IRS by paying heavy taxes for spending the cryptocurrency. However, Wood believes that the IRS will look into the high crypto tax and probably revert with something better, but until then, crypto investors should slow down with spending Bitcoin.
A new crypto tax policy will favor all
The words of Cathie Wood have been echoed by many crypto analysts who believe that the IRS tax policies on cryptocurrency trading are very unfavorable. Earlier in the year, a research by the U.S library of congress concerning crypto tax reported that only five countries in the world have a proper understanding of crypto tax, a problematic situation. However, the IRS believes that digital assets are capital assets and have continued to tax the sale and buy of these digital assets, in spite of a gain or loss in price value.
Unfortunately, the IRS believes that many crypto investors and traders are still tax defaulters despite these policies in place. Before now, the IRS has had to force crypto exchanges like Coinbase to disclose transaction details and their customers’ tax status. However, many around the crypto space are optimistic that a proposed new crypto tax reforms will be the best for all parties involved, as cryptocurrency adoption continues to be high in the country.