COMMENT: I found it very interesting when my bank would not allow using a credit card to buy cryptocurrencies. A friend of mine in Singapore said the government there has also instructed banks not to honor cryptocurrencies. It appears that government is starting to retaliate against the cryptocurrency world and I must question its viability long-term.
DP
REPLY: Yes. This is happening around the world. The US banks of Bank Of America, Citigroup, JP Morgan, Capital One, and the Discover card, have all banned their customers from purchasing cryptocurrencies. In the UK, Lloyds banking group was the first to ban cryptocurrencies and then MBNA, Halifax, and Bank of Scotland quickly followed. According to the blockchain research firm Chainalysis, the long-term Bitcoin holders sold at least $ 30 billion worth of Bitcoin to new speculators between December 2017 and April 2018, half of which was in December 2017 alone making this very taxable in 2018. Many cryptocurrency investors have been lulled by the claim this is outside the central banks and off the grid. There are hundreds of data sources available to governments to track payments after conversion to a hard cash they call “Fiat” currency. Anyone who had purchased cryptocurrencies using their credit cards before the banks started to ban those transactions has a clear paper record for government to track.
Downunder, the Australian Tax Office (ATO) warned crypto traders/investors that their profits from trading in the years 2017 to 2018 “will not go unnoticed” and they have come straight out and warned on their website: “Anyone involved in acquiring or selling cryptocurrency must keep records of their cryptocurrency transactions.” Virtually every government classifies cryptocurrencies as assets. Therefore, any gain relative to the hard cash or “Fiat” currency is then taxable.
I have stated before, the governments want to move to an electronic currency so everything is taxable. They have been watching the cryptocurrency world and are coming down on banks demanding information. This is what the banks are simply banning the use of their credit cards to buy cryptocurrencies. The legal costs of gathering data to prosecute people the governments will demand are causing them to simply refuse to allow customers to use their facilities. The same result took place when the US government imposed FACTA requiring foreign banks to report whatever an American does outside the country. The way to avoid any problems was simply to ban Americans from having an account overseas.
At this point in time, we do have a Directional Change in July. So we may yet see a temporary low form at that time.
