Displaying items by tag: crypto

Advisors need to make sure their clients are paying heed to their crypto returns as they focus on tax loss harvesting. In the past, many investors “flew under the radar” with their crypto returns, but the IRS is now focused on the issue. Some clients may have major gains that they need to report. The IRS considers crypto to be property, which means investor have to pay taxes on their profits.

FINSUM: Despite how the market looks now, stocks had a great year in 2021, and combined with some potentially big crypto wins, there is a lot of capital gains to offset with tax loss harvesting.

Admit it: The first time you heard about non-fungible tokens, or NFTs, you probably thought they were ridiculous ... [Read More]

Bitcoin has stumbled as of late, all the way down to $46,000, but Goldman Sachs isn’t backing off their bullishness and they say the price may double to over $100,000 by the end of 2023. The first of the primary reasons is just the groundswell into digital assets generally. The second big factor is how investors will fundamentally see bitcoin moving forward, as a store of value substitute. They see bitcoin eating away at a stalling gold bouillon. To date, bitcoin only makes up a fifth of the ‘store of value’ market, but that could swing all the way up to a market majority. Other cryptos could also jump in to take some of the markets as well.

FINSUM: As Fed uncertainty lingers, investors are going to push themselves more into alternatives to hedge inflation and interest uncertainty and maintain a store of value.

Christopher Giancarlo is a former chairman of the Commodity Futures Trading Commission, and he spoke out against the Biden Admin’s crackdown on crypto. Biden’s Administration has made it clear that he wants tighter controls on stable coins, which peg to the existing government currencies, and crypto more broadly speaking of the systematic risk. Giancarlo says these regulations are short sited and they fail to see how crypto could improve economic growth and efficiency. He also said that a new regulation bureau should be created to manage crypto and that the government should create its own digital dollar. Giancarlo was a republican appointed by the Obama administration, and this criticism could be very important.

FINSUM: Don’t overlook the ability of stable coins to improve economic effectiveness in allowing for more efficient global financial flows.

Traditional crypto dominates headlines, and while regulations are an inevitability in the U.S.; stable coins are getting some attention from regulators as well. Stable coins are cryptos pegged predominantly the U.S. dollar, using assets like T-bills to back them as an underlying asset. They are used to trade other crypto currencies by many investors and have yields bringing in over 7%. However, the underlying assets backing stable coins are opaque and include commercial paper, loans, or swaps. The Biden admin is calling on Congress, and the Treasury if they fail to act, to regulate the industry because the fear of a run on stable coins is gowing. However, Wall Street views these regulations as a positive for the industry and legitimize stable coins. Mastercard, Visa, Western Union, Silvergate Capital and Signature bank could all benefit given how much they interact with stable coins.

FINSUM: Regulation is the best thing for stable coins, they get so many overseas investors who want hold dollar denominated assets, and this will calm fears of a run on the asset.