The founder and CEO of Ark Invest, Cathie Wood, is warning investors against selling and transacting their bitcoin until the US IRS introduces more sensible tax policies regarding digital assets.
“The IRS has something to say about this, so if you have huge gains in your Bitcoin, I don’t think I would bear much in the way of transactions until we get maybe some changes on the tax front,” Wood declared.
Long-term holders are interested in using Bitcoin for transactions and for selling it for profit. This month, Bitcoin reached a new ATH of over $61,000, and even if these days, a heavy correction was applied to its price, it still remains up 80% on the year.
Furthermore, Bitcoin holders in the US can buy a Tesla with the cryptocurrency – at the current rate, a basic Tesla Model 3 costs 0.72 BTC.
But in the US, regardless if you sell Bitcoin for profit or if you acquire a Tesla, the event is seen as a taxable event because the IRS sees Bitcoin as property and not currency. If that doesn’t change anytime soon, it would be counterintuitive to make crypto transactions.