Was thinking earlier why would MAID survive this onslaught of everything without being hype copycat and without at least some kind of base/promising proven product—with the question of why remaining even after it gets a bit more steam. And then I thought, “because it brings something new to the table,” which has value; value doesn’t exist solely with just the ‘general crypto products with a few twists’ currently out there. It can grow into “that new paradigm”.
Easy to lose sight of this, when falling so far from the top along with not realizing the above.
This seems to be the underlying problem as it currently is. GameStop has a total of 76m stocks issued. However, the real amount of tradable shares on the various US stock markets is far above this. Even the lowest estimate is 140% of the total stock is in the market place.
It is not the company itself “printing” shares. It is the market makers / hedge funds / banks. The general rational is that they are providing liquidity to the market, hence they are allowed to temporarily create what effectively is a synthetic share. The system dynamics are such that in ways too complicated to detail here, the “temporary”part is not so temporary.
This is a life and death situation for some companies, especially if they are struggling. Hedge funds will take short positions against the company. Which leads to an increase in supply of stocks - which leads to lower stock prices. Low stock prices lead to unfavorable terms for additional capital on the company. Which makes it more difficult to turn around the company around.
Hedge funds have to pay capital gains tax when they close positions. But for some reason, if the company they are shorting goes bankrupt and is delisted - they do not have to pay tax on the gains. So there are significant incentives to keep shorting - inflating the number of stocks. Effectively shorting the company to death.
That in turn obviously is to the detriment of the company’s stock holders. The bod/mnmgt have a legal responsibility to act in the best interests of the stockholder. So that is why they will not print shares/NFTs indiscriminately. And also why they want to thwart the hedge funds.
Is that true?! If so that really needs to be changed. That’s a windfall and should be taxed consistent to other gains. Makes no sense that gains are taxed until they get big enough then, poof, no more tax on any of it when the maximum gain is reached.
Maidsafe and civic coin standing firm today in spite of the sell offs throughout the market.
I mention civic because as an owner of that too, I wondered how it was holding up.
Yes, in the US apparently that is the case. I was amazed myself. When you short something you borrow a stock and sell it. If the underlying company goes bankrupt or is delisted, you cannot buy back the share to give back to the lender. And the lender’s property is already worthless, so presumably they don’t care.
If the stock market starts to falter, many people will start cashing in those huge crypto gains to cover losses and ensure 2021 looks good on the books. (Imo)
Apparently the stock market drop was fear of a new covid variant, but there’s no evidence its any more dangerous than any others, just different, so chances are this will blow over and the markets will go back up.
On the other hand, if it is massively more dangerous then for sure I would expect everything to crash including crypto
In the UK for sure CGT is paid even if subsequently, you lose everything. So convert BTC → Doge with a gain of £1000 and then Doge collapses, you still have a £200 tax bill even if you lost everything
The same was introduced in Bulgaria. I say introduced, but in reality there is still no law on crypto in Bulgaria and this is the interpretation of the tax authorities, so…
Yeah - the “taxman” never leaves “free money” on the table. What’s scary in the US is there is some talk of taxing unrealized gains. This to me is way beyond criminal. I can’t see it making it into law, though. It’s just goes too far and would be very messy to implement.
Unrealized gain meaning if my MAID (or stock, or any asset) doubles from $0.50 to $1.00 I would still have to pay tax on the gain even if I didn’t sell anything. Insanity. Would I get a refund the next year if it fell back from $1.00 to $0.80?! Somehow I suspect that wouldn’t be as easy. This policy would crush any kind of economic growth if enacted.
You have to detail every single transaction and take the fiat price at open or close but apply that same to all transactions that financial year.
This can be the case if you cash out in the same financial year, so you can possibly mitigate if you get the timing correct. Each TX you do is a taxable event and you need to work out the gain or loss on each tx.
It’s a horrible system really, if it were only paid on cash out or spend of tokens then it makes sense. As is it’s quite complex.
So in year 1 you change from crypto1 to crypto2 and gain £1000 - you pay £200 in tax, so now you need to sell some crypto2 to pay that and that causes another taxable event that may be a gain or loss and on it goes. So holding crypo2 for a store of wealth get’s tricky as you need to sell some every year to pay that taxman.
I keep hearing that voice in my head that “Al Capone could escape everything but the IRS lol!!!” I have an overriding voice, however, which says, “This is the stupidest f’n system ever devised in the history of humanity, it makes no sense, I don’t understand it, you can’t make me understand it, nor take any action whatsoever, and just sell slowly over years without doing a damn thing about taxes, since the whole thing is just a confusing mess, there is no guiding hand to even assist these criminals in collecting my money, you have to figure it out all on your own, and F it all anyway.”
I think I got it from this. I can’t vouch for accuracy either… I seem to remember something about tax on unrealized gains to be directed towards removing this loophole.
Blockquote
Further to this, there is a huge tax advantage to shorting a company that goes bankrupt. Your profit from the short sale is tax free until you repurchase the shares. If you are short on a company that goes bankrupt and you do not repurchase the shares, you do not crystalize any gains. So the profit that you made shorting the company, not having to buy back the shares, remains tax free!
Interesting. I don’t touch short-selling anyway. Too risky (limited upside, unlimited downside). And the couple of times I tried options ended as painful “learning experiences”. Hard enough to predict direction never mind timing.
Have we, or, are we about to break the long term downward trend? If you draw a downward line from April’s highs. it looks like we are breaking it. For bitcoin this normally meant a strong period of growth in the past…