Bitcoin up more than 900% in the past 12 months
Bitcoin up more than 900% in the past 12 monthsand is still going strong. Bitcoin’s early use as a way to buy and sell illegal goods via the now dead black market Silk Road is gone. Now it’s just a rebellious phase of the Bitcoin’s growth story.
New interest in Bitcoin from institutional investors has undoubtedly given its image a different life. Earlier this year, the world’s largest futures exchange, the Chicago Mercantile Exchange, said it would offer Bitcoin futures due to demand from its clients. WOW!
Bitcoin investors took it as a good sign. The introduction of futures would, in theory, increase the number of institutional investors in the Bitcoin world — thereby increasing the market’s liquidity and stability. Meanwhile, the Nasdaq and Cantor Fitzgerald are also reportedly planning their version of a Bitcoin futures exchanges. If the two powerhouses succeed, many cryptocurrency experts believe the Bitcoin Boom will explode.
Bitcoin up and growing.
So what if an investor had gotten in on the Bitcoin bet before the CME decided to offer Bitcoin futures?
Well, if you had decided to go onto a Bitcoin exchange and buy some $100 worth of Bitcoin a year ago, it would be worth about $1,382 today, with Bitcoin prices resting at about $10,255 (Bitcoin exchanges such as Coinbase allow users to buy a fraction of a Bitcoin).
With $1,000, that stake would have grown to $13,820 in the time span of 12 months. Invest the cost of a luxury vehicle, about $75,000, and that stake would be worth about $1 million today.
And yes you can buy an automobile with bitcoin. In fact, buying and selling Bitcoin can be used to purchase anything!
Remember that income is taxable. When you receive profits from investments, even Bitcoin, Uncle Sam wants his share. Bitcoin’s emerging popularity has also been brought to the attention of the Internal Revenue Service. So if investors cashed out their Bitcoins after holding it for a year, they’d be subject to a capital gains tax, which is typically around 15%. So if investors cashed out a Bitcoin investment that was initially worth $100 but appreciated to $13,820 in a year, their tax could be around $1,923. But a short-term Bitcoin investor, who spent or sold their Bitcoin within a year of first buying it, they’d be taxed at the ordinary income tax rate, which can be as high as 39.6%. Capital gains taxes max out at a lower 20%.
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