This Bill Will Remove the No. 1 Obstacle to Owning Bitcoin

This Bill Will Remove the No. 1 Obstacle to Owning Bitcoin

Nick Rokke: T, you’ve talked about a new law working its way through Congress. The bill would make every bitcoin transaction under $600 exempt from capital gains taxes.

I know you’re really excited about it. How will it affect our readers?

Teeka Tiwari: This new law could be a turning point for bitcoin in America. Because it removes the No. 1 obstacle preventing people from using bitcoin on a daily basis here in the U.S.

You see, right now, even if you buy a cup of coffee with bitcoin, technically you have to pay a capital gains tax on the purchase.

Nick: Why is that?

Teeka: Because of an IRS mandate. Back in 2014, when the IRS was trying to figure out what bitcoin was, they classified it as “property.”

That means if you buy bitcoin, and it goes up in price and you use that bitcoin to buy a cup of coffee, technically you have to pay a 28% tax.

So under current law, you’d have to keep track of every single purchase you made along with the price you paid for your bitcoin…

Nick: That’s absurd.

Teeka: Totally absurd.

Obviously, in a case like this, bitcoin is being used as a currency—not property. Everyone can see that… except the IRS. They say it’s property, so it’s taxed at 28%.

Now, this is an unfair burden on bitcoin. Every other currency gets an exemption.

If a European comes to America and pays for a cup of coffee in euros, no problem. No capital gains tax. But if he pays in bitcoin? Sorry, he has to pay an extra tax.

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Until midnight, we're replaying Teeka Tiwari's live cryptocurrency Q&A.

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Nick: But you’re saying this could all change by the end of the year?

Teeka: Lawmakers are pushing through a law that will eliminate this. It creates an exemption for bitcoin payments under $600, making them tax-free.

Nick: The same exemption other currencies get?

Teeka: The same exemption.

No more “coffee tax.” Bitcoin is treated just like every other currency. It’s put on an equal playing field with the dollar, the euro, the pound, etc.

Nick, this sets the regulatory stage for bitcoin to be used as a daily currency.

Nick: But Teeka, is bitcoin actually going to be used daily? I mean, do they even accept bitcoin at Starbucks?

Teeka: They do. They started accepting it late last year.

Subway, Microsoft, Expedia.com, Dell…

Over 100,000 stores across the globe now accept bitcoin as payment.

And hundreds of thousands more have signed up in just the past year.

Now, I’m not saying that, overnight, everyone is going to be using bitcoin instead of U.S. dollars.

But what I am saying is… this change in the law… it could help the day-to-day use of bitcoin increase significantly…

I wouldn’t be surprised if usage doubled in the next 12 months. And that would obviously increase demand for, and ownership of, bitcoin.

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Nick: What would this do to bitcoin’s price?

Teeka: It would send it soaring. We know this because it’s happened before.

In July, Japan made all digital currencies, including bitcoin, exempt from its 8% consumption tax. Now, before the announcement, very few Japanese retailers accepted bitcoin as payment.

But within days, reports started coming out that over 260,000 outlets would soon be accepting bitcoin payments…

Just like that… bitcoin usage went through the roof.

Now, like I said earlier, if and when bitcoin receives similar tax exemptions here in the U.S., will everybody and their mother throw away their dollars and start using bitcoin?

No. But they don’t have to…

Even if we see a small uptick and a gradual increase in usage, that’s enough to send bitcoin’s price much, much higher than it is today.

Nick: So, let’s see, at today’s prices, that would send bitcoin well over $8,000.

Teeka: I think that’s our low-end estimate, Nick. Remember, the U.S. is a much bigger market than Japan. I wouldn’t be surprised to see a jump twice that big.

Nick: And what about other lesser-known cryptos? I assume they would benefit from this as well.

Teeka: Absolutely. They could soar much higher than bitcoin.

Nick: I hear you’re even giving away a small amount of bitcoin to readers?

Teeka: Yes, I’m so bullish on bitcoin, I bought $1 million worth to give away. You can think of it as a “seed” investment for anyone who joins my research service before midnight tonight.

I believe bitcoin could hit $10,000 in the not-too-distant future. And some of the cryptocurrency experts I’ve talked to believe that a single share of bitcoin will someday be worth over $1 million.

Nick: Thanks, T.


Nick Giambruno’s Note: On Wednesday night, Teeka put on a live cryptocurrency Q&A.

After answering readers’ questions, he revealed some of the best opportunities in the crypto space for 2018… including events he believes “will make this year’s gains seem like chump change.”

If you missed the Q&A, Teeka’s agreed to replay it until midnight tonight. Watch it right here.

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