Cryptocurrency

[Inor]

I am not a big fan of cryptocurrencies. But as things continue to spiral out of control with the dollar, it seems like now would be a good time to move some assets out of U.S. Dollars and into something else.

Although I understand the gold and silver markets much more than crypto, I want to have more liquidity than physical gold and silver can offer right now.

I certainly do not understand crypto as well as I would like before starting to invest but I think we need to get started sooner rather than later. The little bit of study I have done makes me think I need to do the self-custodian thing with it rather than set up an account with Coinbase or similar company. Having a traditional account with a company like Coinbase means the government can audit or freeze that account (like Canada did with the truckers). They can also collect information about me from the account. With the self-custodian option, I would either need to set up a software wallet on a phone or PC or purchase a hardware wallet device. But it also means I can maintain complete anonymity after I have made a purchase and moved the assets to my wallet. Purchasing anything with it would be completely anonymous. I am leaning towards the hardware wallet device since it is the most secure and offers the most privacy.

Buying an asset that is backed by the full faith and credit of literally nothing is only marginally better than keeping dollars backed by the full faith and credit of the United States government.

I am thinking of just buying a small amount on a monthly basis, something like $500 per month and just dollar cost average it over time rather than trying to time the wild swings in the market. I am also thinking of sticking with just the well known ones like Etherium or Bitcoin rather than trying to figure out the details of the thousands of others out there.

Any ideas or advice any of you all could offer would be most appreciated.

[Dwight55]

Got a back yard and some quart jars ???

I may be wrong . . . but cryptocurrency has always seemed to be the half brother of a ponzi scheme . . . and at any given time . . . some computer nerd somewhere can just turn the lights off in the bunk house . . . and it is done . . . all the investors have are memories.

And unless it pays some unreal dividends or interest . . . it might just as well be in the back yard.

Call me old fashioned . . . but I have almost done the quart jar thing . . . have it set up a bit different . . . and short of pulling out my fingernails so I tell you where it is . . . nobody can do anything to "relieve" me of my assets.

May God bless,
Dwight

[Slippy]

Bears some investigation, Inor.

Being brutally honest, I have no understanding of this cryptocurrency sorcery thing.

Edit; Arguably, the best investment today may be canned food goods!

[rstanek]

FYI, last year I tried crypto, I invested $1200.00 in Dogecoin. My payback was just over $11000.00. But it don’t always work that way. I see investing in the stock market or crypto as the same as gambling, never invest more than you are willing to lose…..

[MountainGirl]

If you want to cash out - how do you get your money out of crypto?

(For some reason, 'Hotel California' keeps running through my mind...)

[rstanek]

I use Robinhood, cash it out and deposit it back to your bank….

[MountainGirl]

I use Robinhood, cash it out and deposit it back to your bank….

So, if you buy a 'coin' from Robinhood - and it increases in value - you can sell it back to Robinhood for cash. Yes?
What's in it for Robinhood then? They charge you per transaction, etc? They want their coins back to re-sell?

[Prepared One]

I know nothing about Cryptocurrency, not that I know all that much more about the dollar and investing in general. Right now? I am investing in land, ( East Texas ) canned goods, food and bullets. I have a feeling we are going to need those commodities in the next few months more then a few dollar bills.

[rstanek]

There cost is built into the transaction, if for example you cash in $5000.00, they take about $10.00, this is approximate. I don’t have an issue with this procedure because your cost is negligible, though understand they are a business and need to make a profit just like anyone else. You only pay when you buy or sell. Unlike many other brokers, you pay monthly whether you trade or not…..when you invest,you also are taken a risk…..

[MountainGirl]

There cost is built into the transaction, if for example you cash in $5000.00, they take about $10.00, this is approximate. I don’t have an issue with this procedure because your cost is negligible, though understand they are a business and need to make a profit just like anyone else. You only pay when you buy or sell. Unlike many other brokers, you pay monthly whether you trade or not…..when you invest,you also are taken a risk…..

I understand re the risk, and I'm all for them making a profit - it's the American way, yes?

The process is something I dont need to understand fully; the things I'd want to know are:

1. Is the $9800 you made last year considered taxable income if you withdraw it? If not, how do you account for the cash if you are IRS audited?
2. If you don't convert the $9800 back to cash, and just leave it in 'coin' to grow even more, does it count as realized gains for reporting purposes?

My info is a little out of date, but last I knew the Brandon administration is launching an assault to suck more taxes out via 1) the end of inherited 'stepped-up valuations' re estates; and 2) unrealized gains in 401k plans (whether withdrawn or not). I can't see the gov't not finding a way to attach a tax basis - even on self-custodian options. Yes, there might be better privacy with those - and a way to hide profits - but unless you always leave the asset in the crypto world you're back on their radar.

I like that cryptocurrency is kind of a 'fk you' to the 'man' - but as long as you're still using a commodity for income purposes - there's still a tie-in to the system. Which is fine, if you're fine with that. For me, I prefer tangible assets, that are not subject to gov't monitoring, controlling, regulating or taxing.