Thread by @ren_heinrich

Why you should be aware of increasing crypto taxation and possible implications for the use of cryptocurrencies.

#crypto #cryptotax

//THREAD

Most politicians are still playing down or ignoring the impact that crypto has.

I think this will change significantly over the next few years.

One of the reasons is that crypto offers a big opportunity for governments to generate much needed revenue via taxes.

Let me explain.

Economic growth in most developed nations has been flat for 2 decades now.

Meanwhile debts have exploded.

The pandemic made everything worse. And contrary to what mainstream economists say, economic growth is not coming back.

The situation will deteriorate over the next few years.

#Inflation is now baked into the cake. Putting immense pressure on populations and as a consequence on governments to do something about it.

There are no more good options left.
medium.com/coinmonks/how-…

If central banks hike interest rates or when a vital part of the propped up economy gives way, everything will crash.

When that happens 20% of businesses will die because they rely on cheap credit. That would mean lots of people losing their jobs.

Tax revenues will collapse.

What will gov’s do?

Forget about "tax the rich” because the wealthy own the politicians. Ditto big corporations who use every trick in the book to avoid paying more taxes.

So the authorities’ eyes will (again) fall on the middle class or what's left of it.

Enter crypto.

It's one of the few growing sectors left. There is no doubt that it will become mainstream. In 2021, Bitcoin transacted more value than VISA.

Soon gov’s will figure out that there is huge potential to tax these transactions and crypto gains in general.

The transparency inherent in crypto will help authorities to quickly seize this opportunity.

And compared to just a few years ago, the authorities’ capabilities in this regard have grown significantly.

As a crypto investor you need to prepare for this.

https://twitter.com/ren_heinrich/status/1464609105348333571

What does more crypto taxation mean for you as a #cryptoinvestor?

3 options:

1. Swallow your disgust/anger and pay your taxes
2. Move to a place with lower/no crypto tax
3. Do crypto business in spaces where the state can’t see/reach.

I think that a combination of points 1 & 3 will be the solutions picked by most.

For some things you will use an official wallet that the authorities can connect to your person. For other things, though, you will use a combination of anonymous #cryptocurrencies and wallets.

I think that as a reaction to the heavier taxation by the state, the crypto shadow economy, which is still relatively small today, will grow strongly in the coming years.

Another reason will also be that more and more people's trust in fiat currencies is eroding.

This will inevitably also trigger a reaction from the authorities towards more control of #cryptocurrencies.

It is difficult to predict how things will develop in concrete terms. But it is clear that the coming years will be very interesting.

As predicted, taxation on crypto transactions is coming.
coindesk.com/policy/2022/03…