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0 sats \ 2 replies \ @SwapMarket 18 Feb \ parent \ on: Bitcoin Jungle needs buyer adoption, not merchant adoption bitcoin
Buying BTC with short-term horizon invites volatility and taxes. It is only hard if held for 5 years or so. If I expect expenditures in the near term, I hold cash in the account for those.
You're only taxed on fiat "gains". So, by holding Bitcoin instead, even after paying taxes, you have more fiat value than you would have had if you had held fiat over that same period.
As for the volatility.... if a 10% dip prevents you from paying bills, then you probably spend too much, and/or over leveraged yourself. Which is a sign that you're still living heavily within a fiat mindset.
The dollar is far more volatile than Bitcoin.
Also, such a 10% drop would mean you get a tax break when you go to file your taxes next year.
I think OP makes a lot of sense. Way too many Bitcoiners treating Bitcoin purely as an "investment", worried too much about their fiat gains/losses.
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You're only taxed on fiat "gains". So, by holding Bitcoin instead, even after paying taxes, you have more fiat value than you would have had if you had held fiat over that same period.
While this is true, you are incurring a non-trivial amount of overhead to track this. Ideally you need to "segregate" the tax portion of those gains in order to pay taxes with....inadvertently spending them will lead to further issues. Then that fiat is going to sit unproductive for months waiting to pay the tax with it.
You could make the argument to just keep the tax gains itself in BTC and liquidate that amount later to pay those gains. That can work, but timing can be a bitch. Imagine you go thru a 50% bear market and now you need to sell to pay for gains you made 8 months prior.
There are lots and lots of day traders that go bankrupt from these scenarios.
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