Regulation is likely to win the future of cryptocurrencies

Shane Stephenson, CEO, Coin tree

Despite market revisions earlier this year, cryptocurrencies have shown resilience as an asset class and continue to attract the attention of thousands of investors. However, entering fiscal year 2022, it is clear that there remains uncertainty about cryptocurrencies and how they interact with the Australian tax system.

Many investors consider the lack of regulatory intervention in this asset class affirmative, and some believe that digital currencies can be operated without banking, financial institution, and government intervention. I am.

The amount of wishful thinking does not impede growing investment opportunities from facing regulation. Especially if the opportunity can generate the growth seen across cryptocurrencies in the last year alone. The government is simply not so benign.

But that’s not all. In Cointree’s view, tighter regulation of this asset class could bring long-term benefits to investors.

Justification of the industry and our assets

A less regulated environment can increase investor agility in taking advantage of investment opportunities, but regulation allows the government to approve new concepts, technologies, or assets in a broader economic or industrial system. It often indicates that you are aware of that potential.

We believe this is a possible consequence of blockchain technology and cryptocurrencies. Regulation is inevitable. When this happens, assets will become more acceptable to more investors, especially institutions such as banks and aging funds. The green light of regulation makes this asset the mainstream of investment, which in turn increases the value of the crypto sector.

Replace volatility with stable growth

Both since the introduction of this asset class in 2009 Coin tree And the broader industry has focused on educating investors about the volatility of the crypto market and understanding the importance of having a rigorous investment strategy.We do this online Learning hub..

As regulations tighten, we recommend that short-term traders and speculative investors leave the market, seek wise advice on developing investment strategies, and carefully consider the role of cryptocurrencies and their underlying assets. More investors may adopt the principle in their portfolio.

This will reduce some of the trading fluctuations seen in the market when the “Panther” with the spirit of gambling fraud comes out of the market, and cryptocurrencies and blockchain assets will grow more predictably as a tool for a long time. Hope it can work-Termwells Generation. This is the role Cointree supports and believes in.

The tax framework is still in its infancy

Regardless of the investor’s belief, the ATO insists on how cryptocurrencies work under tax law and gives new investors and traders the same cryptocurrency capital gains as traditional assets. It warns you to remember that you need to submit your gains and income.

“ATO considers cryptocurrencies to be assets rather than currencies, so they are taxed when buying, selling or exchanging,” said Tim Loh, ATO’s assistant commissioner, and regulators say that many cryptocurrency traders do not have taxes. It suggested that they were concerned about their impact on radar as they embarked on their trading journey.

For each cryptocurrency transaction you make, it may be helpful to maintain the following for tax purposes:

  • The date of each transaction.
  • The value of cryptocurrencies in Australian dollars at the time of transaction.
  • Purpose of transaction;
  • Details of other parties involved.

Keeping these records is a good starting point and filing a tax return containing crypto assets is not difficult, but you can see exactly what your portfolio is doing and capital gains or Finding out if you need to pay income tax is crucial to ensure you are not one of the 100,000 traders estimated to receive a call from ATO this year.

Investors believe it is important to be educated about the regulatory framework of the businesses and assets they own, rather than responding quickly to change.

In the long run, regulation is unavoidable and can benefit investors. If you are considering investing in this growing asset class, it may be wise to incorporate the impact of the new regulations into your investment strategy.

Regulation is likely to win the future of cryptocurrencies

Source link Regulation is likely to win the future of cryptocurrencies

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