Is anyone else starting to become a bit worried? mod note in first post

The One Doctor

Participated in a pump and dump today, interesting experience. Made 10.5% but a tense few minutes. Price went from 0.00000256 to 0.00000383 in two minutes, tough getting orders in and out.

Very low volume coin, 0.04BTC. MOTO on Cryptopia. Pump is long gone so don't buy it!

Edit - Yes, I know it's immoral, but I was curious. It's not a viable way of making money as the max order was 0.017BTC (mine) and I accidentally picked my sell order to be at 0.00000380 (was a wild guess). Not like you could dump in 1BTC and get 0.105 back out.

Chancer3001

I'm 99% sure tether is a scam.

But when it blows the Bitcoin price to death...u wonder if all the other coins will die too

JohnnyFlash

Chancer3001 wrote: »

I'm 99% sure tether is a scam.

But when it blows the Bitcoin price to death...u wonder if all the other coins will die too

The entire thing looks very troubling to this keen observer. There's over 2 billion worth of Tether being used to pump the price every day. Like why would some regular punter put his real money into crypto, when the Tether lads just created billions of 'dollars' out of thin air, and are using it to move the market in just the way they want? Using tactics that cannot be used in any proper trading market - wash trading, painting the tape, going long and then manipulating the market on bitfinex to clear out the (increasingly rare) short positions?

Meanwhile the miners are having to cash out into real money all the time to pay the leccie bill etc. Where's the liquidity? The money that came in through Coinbase, Kraken and the other FIAT gateways must be well washed through the system by now. I know tether and bitfinex are seen as the dodgy actors in all this, but I think Binance is the other huge elephant in the room. As dodgy as a nine bob note.

Roberto_gas

6000 from 9000(assuming it was predicted then ) is a drop of 33% and its not a guess...lets give credit where its due...

smacl

JohnnyFlash wrote: »

The entire thing looks very troubling to this keen observer. There's over 2 billion worth of Tether being used to pump the price every day. Like why would some regular punter put his real money into crypto, when the Tether lads just created billions of 'dollars' out of thin air, and are using it to move the market in just the way they want? Using tactics that cannot be used in any proper trading market - wash trading, painting the tape, going long and then manipulating the market on bitfinex to clear out the (increasingly rare) short positions?

It is a fair point, but I wonder whether part of the current decline isn't already due to huge loss of trust in tether and people simply not holding it any more. If you think about it, tether was used on a trust basis as safe haven to hold crypto in a wildly fluctuating market. Once that trust is gone, which I believe has been the case for some time for most people, tether only gets held in far smaller amounts for short term transactions. Further to this, if an exchange starts handling FIAT pairs, as Kraken currently does and binance is mooted to do in the near future, tether becomes entirely obsolete. I agree that tether and Bitfinex are not long for this world, but doubt the larger exposure is anything like what it once was. The big money has most likely already left the scene, and the downturn we're seeing could well be the result of that.

Pure speculation, but if binance starts providing FIAT pairs (which seems likely), tether will be about as significant as a fart in a hurricane.

smacl

Pintman Paddy Losty wrote: »

Anyway, this current bear run will look like absolutely nothing once Tether collapses. That will be an absolute bloodbath for bitcoin, quite possibly a death blow.

Bloodbath? Careful there Paddy, you're treading dangerously close to Brendan the butcher's turf there

makeorbrake

smacl wrote: »

I agree that tether and Bitfinex are not long for this world, but doubt the larger exposure is anything like what it once was.

How are they not long for this world? i.e. what mechanism is there to stop them from doing what they're suspected of doing?

I'm also struggling to understand how it's no longer relevant. If they are dreaming up tether - issuing them without any backing and then using that 'currency' to buy bitcoin, surely that's always going to have an effect on liquidity...perceived liquidity as opposed to actual liquidity in the market??

Dohnjoe

Pintman Paddy Losty wrote: »

Anyway, this current bear run will look like absolutely nothing once Tether collapses. That will be an absolute bloodbath for bitcoin, quite possibly a death blow.

If I had one Dogecoin for every "Bitcoin "trader"/psychic who comes in here claiming to know future events and prices (yet mysteriously doesn't put their money where their mouth is) then as if by magic disappears when their predictions fail to materialise"..

smacl

makeorbrake wrote: »

How are they not long for this world? i.e. what mechanism is there to stop them from doing what they're suspected of doing?

I'm also struggling to understand how it's no longer relevant. If they are dreaming up tether - issuing them without any backing and then using that 'currency' to buy bitcoin, surely that's always going to have an effect on liquidity...perceived liquidity as opposed to actual liquidity in the market??

They can dream up as many tether as they like, but they have no value other than devaluing existing tether unless people buy them. If people stop holding tether and exchanges start trading FIAT pairs, tether effectively disappears. Put another way, who in their right mind would hold large volumes of tether at this point in time? What exactly is the value of tether without absolute trust that it is fully and securely underwritten?

As i say, speculation, but if the whales lost trust in tether, what would they do and how would that effect the market? My guess is get rid of tether through other coins and quietly dump those coins back to FIAT, which would depress the market. This seems to match what is happening to the market.

It could well be when and if tether goes pop, it will trigger growth rather than decline, as the elephant in the room is shown the door.

makeorbrake

smacl wrote: »

As i say, speculation, but if the whales lost trust in tether, what would they do and how would that effect the market?

Like you say, who in their right mind can justify holding tether? Can't figure it out....yet price has not devalued.

As regards if and when tether can be put behind crypto once and for all, it can only be a positive for the space.

Dohnjoe

makeorbrake wrote: »

Like you say, who in their right mind can justify holding tether? Can't figure it out....yet price has not devalued.

As regards if and when tether can be put behind crypto once and for all, it can only be a positive for the space.

Traders are reliant on it to make their spreads and margins, it's the sheer necessity

When there's more liquidity in the market that may change

smacl

makeorbrake wrote: »

Like you say, who in their right mind can justify holding tether? Can't figure it out....yet price has not devalued.

As regards if and when tether can be put behind crypto once and for all, it can only be a positive for the space.

As soon as the the price is devalued, tether is broken and gone. Even if tether becomes slower to sell, I'd say it is gone, as the whole point is that you don't have to discount it and anyone who can't sell will. I'm guessing (and this is all guesswork) bots are using it is as a short term holding mechanism to take advantage of perceived market fluctuations. At this point, anyone running bots or a bot net with any savvy is going to make damn sure the total tether held is relatively small at any given point in time. It is worth remembering that regardless of how many tether are issued, nobody is obliged to buy them and they stay on tether limited's books / wallet until such time as they have a buyer. Of the total tether technically in circulation, we don't know how many are held by tether limited and hence can effectively be eliminated. What is interesting is whether exchanges are holding tether, in what quantity, and whether they have other guarantees with tether ltd.

h0neybadger

If tether is being held by exchanges, then I wouldn’t leave a single Satoshi on any exchange.
If that bang goes off, who knows what would happen.

JohnnyFlash

h0neybadger wrote: »

If tether is being held by exchanges, then I wouldn’t leave a single Satoshi on any exchange.
If that bang goes off, who knows what would happen.

You can see this on coinmarketcap. Over 45% of all trades yesterday were btc/usdt (tether). Bitfinex, Binance, Okex were the main exchanges using this. 1.8 billion of the total supply of tether was used to buy and sell bitcoin on these exchanges. That’s yesterday. There’s days when the entire market supply of tether is used for these trades. It’s extremely suspicious activity. You’d have to wonder is there any real money coming into crypto at all these days, so is the entire thing just tethers being used to manipulate the price in an attempt to extract the last of the real money floating round on the exchanges. It looks and smells like an enormous exit scam from the conmen at Tether Ltd.

smacl

JohnnyFlash wrote: »

You can see this on coinmarketcap. Over 45% of all trades yesterday were btc/usdt (tether). Bitfinex, Binance, Okex were the main exchanges using this. 1.8 billion of the total supply of tether was used to buy and sell bitcoin on these exchanges. That’s yesterday. There’s days when the entire market supply of tether is used for these trades. It’s extremely suspicious activity. You’d have to wonder is there any real money coming into crypto at all these days, so is the entire thing just tethers being used to manipulate the price in an attempt to extract the last of the real money floating round on the exchanges. It looks and smells like an enormous exit scam from the conmen at Tether Ltd.

You could well be right, but there has to be more than Tether Ltd involved as they can't make anyone buy tether and there is no gain to be had to holding tether other than as a short term stop-gap for trading purposes. People who are cashing out don't have any reason to use tether that I can think of. On the assumption that Tether Ltd aren't buying tether, who is and why?

kaymin

smacl wrote: »

You could well be right, but there has to be more than Tether Ltd involved as they can't make anyone buy tether and there is no gain to be had to holding tether other than as a short term stop-gap for trading purposes. People who are cashing out don't have any reason to use tether that I can think of. On the assumption that Tether Ltd aren't buying tether, who is and why?

My understanding is that many of the exchanges are unable to open bank accounts as the banks don't want to deal with them and so they use tether instead as a way of maintaining liquidity and providing an exit mechanism.

If tether ceases this exit mechanism is lost and crypto holders won't be able to convert their holdings into fiat.

If tether is not actually backed up by dollars as it claims then it's a bit similar to Madoff and those last out or unable to get out will be wiped out - this applies to crypto beyond tether.

smacl

h0neybadger wrote: »

If tether is being held by exchanges, then I wouldn’t leave a single Satoshi on any exchange.
If that bang goes off, who knows what would happen.

I can't see why an exchange would hold much tether or any coin for that matter. They facilitate exchanges but those exchanges are all based of other peoples coins temporarily hosted in exchange wallets. AFAIK, the exchange doesn't need significant funds beyond this for most transactions. Tether is a funny one in this regard, and I'd guess the tether wallet on any exchange is either owned by Tether Ltd or handled by a back to back agreement with them. After all, the trust relationship with respect to tether isn't dependent on the exchange.

smacl

kaymin wrote: »

My understanding is that many of the exchanges are unable to open bank accounts as the banks don't want to deal with them and so they use tether instead as a way of maintaining liquidity and providing an exit mechanism.

If tether ceases this exit mechanism is lost and crypto holders won't be able to convert their holdings into fiat.

If tether is not actually backed up by dollars as it claims then it's a bit similar to Madoff and those last out or unable to get out will be wiped out - this applies to crypto beyond tether.

Excuse my naivety, but why exactly does an exchange need liquidity? It is hosting wallets for people and facilitating trading, but it is not engaged in any kind of lending where it could be exposed to loss or have a need of funding.

kaymin

smacl wrote: »

Excuse my naivety, but why exactly does an exchange need liquidity? It is hosting wallets for people and facilitating trading, but it is not engaged in any kind of lending where it could be exposed to loss or have a need of funding.

I don't trade crypto so don't know all the mechanics but don't the exchanges buy your crypto for fiat upon request at the going rate (subject to usual withdrawal limits)?

smacl

kaymin wrote: »

I don't trade crypto so don't know all the mechanics but don't the exchanges buy your crypto for fiat upon request at the going rate (subject to usual withdrawal limits)?

Not so far as I know. You trade in currency pairs, e.g. BTC/ETH. I say i want to sell x BTC for y ETH on an exchange and an order gets placed. Someone else says they want to buy x BTC for y ETH and the exchange gets made and the order fulfilled. This is something of an over simplification, as the amounts don't stack up, and one sell order could be fulfilled by multiple buy orders and vice-versa but this is the gist of it. AFAIK, the exchanges are made without using any other intermediate currency or equivalent instrument.

Edit: For exchanges that support FIAT, such as CoinBase and Kraken, yes you can buy and sell crypto for FIAT at the exchanges rate plus fees, which is where a link to a bank comes into play.

kaymin

smacl wrote: »

Not so far as I know. You trade in currency pairs, e.g. BTC/ETH. I say i want to sell x BTC for y ETH on an exchange and an order gets placed. Someone else says they want to buy x BTC for y ETH and the exchange gets made and the order fulfilled. This is something of an over simplification, as the amounts don't stack up, and one sell order could be fulfilled by multiple buy orders and vice-versa but this is the gist of it. AFAIK, the exchanges are made without using any other intermediate currency or equivalent instrument.

How do you sell your crypto for fiat then? There's another thread on cash withdrawals which seems to indicate exchanges provide fiat in exchange for your crypto.

Assuming that is the case then exchanges without bank accounts may use tether as a way of getting their hands on dollars (in the absence of new investors with fresh dollars).

So tether could be perceived as a ticking time bomb should the regulators close up tether (i understand it is being investigated), the auditors finally get to report on the dollar backing or lack there-of or there is a rush for the exits by crypto investors and tether doesn't have the fiat resources to pay the exchanges who in turn will be unable to pay the crypto investors.

kaymin

Arguably this is FUD but as this article explains, the increase in the volume of tether coincides with a sharp rise in the values of cryptos. If tether is not backed up by dollars then the crypto price rises are not supported by new investor money but by manipulation.

https://www.google.ie/amp/s/www.cnbc.com/amp/2018/02/02/tether-what-you-need-to-know-about-the-cryptocurrency-worrying-markets.html

smacl

kaymin wrote: »

How do you sell your crypto for fiat then? There's another thread on cash withdrawals which seems to indicate exchanges provide fiat in exchange for your crypto.

Many if not most exchanges such as binance don't support FIAT so this isn't an issue. To move between crypto and FIAT you need to go via one that does, such as CoinBase. Those exchanges that support FIAT have bank accounts and work with banks.

Assuming that is the case then exchanges without bank accounts may use tether as a way of getting their hands on dollars (in the absence of new investors with fresh dollars).

How exactly? Tether is just another coin, you still need to go through an exchange that supports FIAT to get FIAT from tether.

So tether could be perceived as a ticking time bomb should the regulators close up tether (i understand it is being investigated), the auditors finally get to report on the dollar backing or lack there-of or there is a rush for the exits by crypto investors and tether doesn't have the fiat resources to pay the exchanges who in turn will be unable to pay the crypto investors.

Tether is a ticking time-bomb not because of what it does but because there are serious question marks as to whether or not it does what it purports to do. If it was properly underwritten and audited there would not be an issue, but for this to happen I imagine it (or an equivalent) would need to be traded at a premium to insure against losses to the underwriter. As it stands, it is extremely dubious, and I imagine anyone with any financial nous has long since limited their exposure to it. Exchanges have a habit of going on the blink when anything bad happens that leads to a big run on currency and while I haven't read all the T&Cs of the ones that I use I'm guessing they can all pretty much be summed up as caveat emptor. Personally, I'm not worried as I don't confuse my exchange accounts with my bank accounts

JohnnyFlash

smacl wrote: »

Many if not most exchanges such as binance don't support FIAT so this isn't an issue. To move between crypto and FIAT you need to go via one that does, such as CoinBase. Those exchanges that support FIAT have bank accounts and work with banks.



How exactly? Tether is just another coin, you still need to go through an exchange that supports FIAT to get FIAT from tether.



Tether is a ticking time-bomb not because of what it does but because there are serious question marks as to whether or not it does what it purports to do. If it was properly underwritten and audited there would not be an issue, but for this to happen I imagine it (or an equivalent) would need to be traded at a premium to insure against losses to the underwriter. As it stands, it is extremely dubious, and I imagine anyone with any financial nous has long since limited their exposure to it. Exchanges have a habit of going on the blink when anything bad happens that leads to a big run on currency and while I haven't read all the T&Cs of the ones that I use I'm guessing they can all pretty much be summed up as caveat emptor. Personally, I'm not worried as I don't confuse my exchange accounts with my bank accounts

Binance is by far the biggest user of Tether after Bitfinex (Bitfinex themselves refer to it as USD for trades - as they believe the claim that Tether is backed one-to-one with a dollar for each tether. Which isn't surprising as Tether and Bitfinex are the same people!

Binance traded almost 400 million dollars of BTC/USDT yesterday, and that was a quiet day. I think Binance is as dodgy as hell as well to be honest. It's not bad around here, but anyone suggesting same on Reddit is downvoted to oblivion. This CZ lad is like a god to them, despite running an exchange that seems to be up to some shady practices themselves.

Dohnjoe

smacl wrote: »

How exactly? Tether is just another coin, you still need to go through an exchange that supports FIAT to get FIAT from tether.

I'm not knowledgeable on this, but Tether is acting as a type of market liquidity - representing stable cash vs volatile assets in this market. Which means that Tether can be safely "held" intraday or overnight without the urgency to cash it out. It can be exchanged at a fixed time to Eth/BTC/whatever, which in turn goes to a fiat exchange to be cashed out (under time pressure due to the market volatility)

If Tether didn't exist then the markets would dramatically seize up. It's a form of "stable crypto liquidity", very different from the other coins

Kenny Logins

Can you dig to the moon?

kaymin

smacl wrote: »

Many if not most exchanges such as binance don't support FIAT so this isn't an issue. To move between crypto and FIAT you need to go via one that does, such as CoinBase. Those exchanges that support FIAT have bank accounts and work with banks

The news reports (such as the one I linked to) indicate that tether is being used in many instances by exchanges rather than exchanges supporting fiat hence why tether is viewed as systematic to the whole crypto universe. Do you think this is misinformation?

smacl

Dohnjoe wrote: »

I'm not knowledgeable on this, but Tether is acting as a type of market liquidity - representing stable cash vs volatile assets in this market. Which means that Tether can be safely "held" intraday or overnight without the urgency to cash it out. It can be exchanged at a fixed time to Eth/BTC/whatever, which in turn goes to a fiat exchange to be cashed out (under time pressure due to the market volatility)

If Tether didn't exist then the markets would dramatically seize up. It's a form of "stable crypto liquidity", very different from the other coins

I actually think that tether is a kind of pseudo-liquidity here, in that it performs this function without actually being a stable asset itself (until such time as it is audited, which seems less likely as time goes on). I can understand the need for it at this point in time, but that need could be largely eliminated by better FIAT support on other exchanges and faster intra-exchange movement of coins. Either that, or a more reputable financial institution puts together something like tether that is fully backed and underwritten (and no doubt has the fees to match). When you think about it, tether should be expensive to use, as it is covering a substantial risk.

smacl

kaymin wrote: »

The news reports (such as the one I linked to) indicate that tether is being used in many instances by exchanges rather than exchanges supporting fiat hence why tether is viewed as systematic to the whole crypto universe. Do you think this is misinformation?

Exchanges support tether, but the people carrying the risk in them doing so are the traders, not the exchanges. I think it is wrong to say tether is being used by exchanges, rather it is being supported by exchanges that don't support FIAT as a mechanism to let them do business. If you use an exchange that supports FIAT, you have no reason to go through tether. If you use an exchange that doesn't support FIAT and you want to crystalise your crypto in FIAT terms, your choices are to use tether, or transfer BTC or ETH to an exchange that does support FIAT and then move to FIAT at that point. Personally, I'd always use the latter, but for a trader the process is too slow and costly. In that case they suck up the risk as part of the game they're playing. Trading crypto is a very high risk game and that's just one more risk among many.

Edit: Just to add, for FIAT, exchanges don't need liquidity either. FIAT pairs are the same as any other pair. Someone wants to buy x BTC for y USD the transaction is only made when someone else is willing to sell x BTC for y USD. All the FIAT used comes from customer wallets and the exchange doesn't guarantee that you can buy in or cash out for anything other than the current market rate to the limit of the available orders on its books. The liquidity is no more or less than the current stack of orders on the exchanges books and comes entirely from customer wallets. If you look at it that way, there is no risk to a bank in supporting an exchange as they are never lending to that exchange.

Dohnjoe

smacl wrote: »

I actually think that tether is a kind of pseudo-liquidity here, in that it performs this function without actually being a stable asset itself (until such time as it is audited, which seems less likely as time goes on). I can understand the need for it at this point in time, but that need could be largely eliminated by better FIAT support on other exchanges and faster intra-exchange movement of coins. Either that, or a more reputable financial institution puts together something like tether that is fully backed and underwritten (and no doubt has the fees to match). When you think about it, tether should be expensive to use, as it is covering a substantial risk.

Stronger Fiat support will be a big improvement. Have you read about Qash? seems an interesting project to bring more liquidity to the markets - fully compliant with the regulators also

Euro banks are trialing instant SEPAs (with super low fees) in about 6 months which may also change the landscape

Bob24

All coins very green today after BTC touched its February bottom over the weekend and rebounded a bit.

From a technical analysis perspective the next few days might be decisive to set the trend for a coming weeks/months.

smacl

Dohnjoe wrote: »

Stronger Fiat support will be a big improvement. Have you read about Qash? seems an interesting project to bring more liquidity to the markets - fully compliant with the regulators also

Euro banks are trialing instant SEPAs (with super low fees) in about 6 months which may also change the landscape

Hadn't read about Qash but have now, so thanks for the heads up. It certainly seems likely that binance will support FIAT soon enough which will change the trading landscape dramatically.

Dohnjoe

5 years of watching the market, In my experience technical analysis on such an irrational market is nonsense (my own opinion)

Most are just waiting for it to hit a floor and hold. This might be the one, we'll see.

Bob24

Dohnjoe wrote: »

5 years of watching the market, In my experience technical analysis on such an irrational market is nonsense (my own opinion)

Most are just waiting for it to hit a floor and hold. This might be the one, we'll see.

Yes agreed that’s why insisted saying “from a technical analysis’ perspective). I wouldn’t make any strong predictions based on those as they are assuming there is a logical trend whereas it is not necessarily the case. It’s still interesting to look at what they say though, more as a reflection on what the latest developments have been rather than an investment guide.

smacl

Dohnjoe wrote: »

5 years of watching the market, In my experience technical analysis on such an irrational market is nonsense (my own opinion)

Most are just waiting for it to hit a floor and hold. This might be the one, we'll see.

Much newer to the market here with no background in financial analysis but some experience in pattern recognition. I'd guess there could be mileage in writing experimental bots to apply deep learning techniques to look for repeating patterns and do very short term forecasting on that basis. Basically, if you have a period of data, train your system based on part of it and see whether it can make reasonable predictions on the next bit of known data. If it can, try it out using live data. If it still works start using it to make plays with real funds. No idea how well it would work in practise, and you probably end up with bots playing against bots in the long term for diminishing returns. That said, if I was into trading it would be at API level using a mechanism such as this.

Tinder Surprise

Dohnjoe wrote: »

5 years of watching the market, In my experience technical analysis on such an irrational market is nonsense (my own opinion)

I hear ya!

There are so many bullshít merchants out there who like drawing wedges on charts like somone using MS Paint and who never stand by anything they claim, but I do find Datadash (YouTube) who does good analysis and trends

ZeroThreat

Tinder Surprise wrote: »

I hear ya!

There are so many bullshít merchants out there who like drawing wedges on charts like somone using MS Paint and who never stand by anything they claim, but I do find Datadash (YouTube) who does good analysis and trends

Some of his back story seems dodgy tbh, he claims to have been in the 'trading business' for 7 years, yet apparently he's only 19 years old! Something doesn't add up... :rolleyes:

Tinder Surprise

ZeroThreat wrote: »

Some of his back story seems dodgy tbh, he claims to have been in the 'trading business' for 7 years, yet apparently he's only 19 years old! Something doesn't add up... :rolleyes:

Really...i must read up more

annie.t

I have to disagree here. TA does work in crypto markets. From my experience anyway

Stoko

I know few guys that make good living from trading crypto using TA everyday.
For normal people it wont work though. For long term investments it should be just done with small goals. At the end all will average to a good percentage.

Hodl?

Autochange

[Deleted User] wrote: »

Hodl?

Temporarily tether yourself

drunkmonkey

Deleted User wrote: »

Hodl?

Seemingly the bitcoin has only had a positive march once in 7 years but has had a positive April 5 out of 7 times so fingers crossed.

Dohnjoe

Deleted User wrote: »

Hodl?

Traders aside, anyone I know who tried to buy and sell to make a quick buck are way down on friends/colleagues who bought as an investment to leave for years

My portfolio is down 75% since peak in January, but I am still up 100's of percent from first purchases. The only selling I've done it to cash out initial investment or to move from one alt to a better one

Don't get me wrong, there is plenty of money to be made from buying/selling, but unless someone has seriously good knowledge of the market I wouldn't recommend it

Bob24

Dohnjoe wrote: »

Don't get me wrong, there is plenty of money to be made from buying/selling, but unless someone has seriously good knowledge of the market I wouldn't recommend it

Plus every time you sell you need to pay tax on the profits while the government won’t give you money if you make losses.

So unless you know exactly what you’re doing and buying and selling all the time is probably not very tax efficient.

Dades

Bob24 wrote: »

Plus every time you sell you need to pay tax on the profits while the government won’t give you money if you make losses.

So unless you know exactly what you’re doing and buying and selling all the time is probably not very tax efficient.

I'm not sure I agree with that. Making any profit isn't tax efficient.

With crypto you can't safely leave a "profit" anywhere, as every coin is subject to huge swings, and your profit could be eroded very quickly over a short space of time. (On the plus side, you won't have as much tax to pay!)

Bob24

Dades wrote: »

I'm not sure I agree with that. Making any profit isn't tax efficient.

With crypto you can't safely leave a "profit" anywhere, as every coin is subject to huge swings, and your profit could be eroded very quickly over a short space of time. (On the plus side, you won't have as much tax to pay!)

To clarify, what I’m saying assumes the person investing thinks the long term trend is going upwards. Of course if their goal is to catch local highs and they are very good at it even in a downwards market, things are different.

smacl

Bob24 wrote: »

Plus every time you sell you need to pay tax on the profits while the government won’t give you money if you make losses.

So unless you know exactly what you’re doing and buying and selling all the time is probably not very tax efficient.

Not really though, you can store FIAT on many exchanges without needing to withdraw to cash.

If you were doing a lot of trading, you could also set up a company, where all your costs are allowable (including salary, electricity, computer hardware etc... ), and you declare yearly profits on the remainder, on which you pay corporation tax.

Dades

smacl wrote: »

on which you pay corporation tax.

And then income tax on top of that when you take the money out of the company.

smacl

Dades wrote: »

And then income tax on top of that when you take the money out of the company.

Not really, no. If you take money out as salary, it is a cost before profit and hence not subject to corporation tax but is subject to PAYE. If you declare a dividend on profits, or sell or liquidate the company, the money made is subject to CGT, not PAYE, which is pretty much what you pay on crypto profits anyway. Bottom line is you pay income tax on regular income and capital gains tax on one off capital gains. You'll always pay one or the other but shouldn't ever need to pay both.