Enter The Financial Giants
As the Bitcoin price continues to edge higher, Bitcoiners are forced to face a bitter sweet reality that cannot be escaped. Even though the halving is now finally beginning to factor into the price, the reality is that BTC is currently riding the wave of institutional money and adoption. This would most definitely be considered the bitter side of the pill. On the other hand, the price is being very positively affected by the adoption of financial giants and investing legends.
Compared to a time when the Crypto community were still wondering if mainstream adoption was even likely, to a time where it now appears to be completely unstoppable. It is hard to comprehend how this transition happened so fast and almost effortlessly. I guess much is due to the turmoil created by the current pandemic and the reactive measures taken by governments and the FED.
Well, the truth of the matter is that this transition is far from complete! There are still a lot of wrinkles to be ironed out and that will take some time. Governments have to catch up and policies need to be proven effective in order for the people and institutions to know where they stand. It is this grey uncertainty that has caused many a potential investor to hold off, at least until they feel more certain that their money is safe and that future regulation will not affect their portfolio in a negative manner.
Beyond The Machinations Of Control & Power
Apart from the obvious reason, which is simply to gain more power and control, there is another very important aspect that some people may have not taken into consideration. Large companies, such as PayPal are regulated and need to be compliant to an exhaustive list of requirements. At the end of the day, many decisions are outside of their control and they have to simply comply or be blocked. Hypothetically speaking, let's say for a moment that PayPal did allow Crypto withdrawals.
If I purchase Bitcoin through the service that PayPal offers and then choose to send BTC to a friend months later, the BTC would then be sent and the only revenue generated would be by PayPal in the form of trading and withdrawal fees. By not allowing Crypto withdrawals, I am now forced to sell my BTC for fiat, in order to send money to a friend.
This would now create a taxable event! You can be sure in thinking that the taxman is behind this regulation. Every single Crypto purchase on PayPal is now guaranteed to become a taxable event at some point. We all know that the smart group in Crypto have no intention of selling their holdings but will rather utilize them in order to gain more! As the Crypto market is now expected to grow significantly in the years to come, you can be sure that this measure will remain in place until they figure out an alternative way to ensure their cut.
Capital gains taxes are pretty steep in some countries and in years to come this would amount to a very significant amount of capital. I don't foresee this measure changing anytime soon! PayPal Crypto users have in essence been tricked into creating a taxable event but if I bought BTC on a Crypto exchange and transferred it to my own wallet, I would not be avoiding a taxable event. There would be no need for one to exist, as I am simply moving it, not selling it.
What this regulation does is place the taxman in an unnecessary position, in order to make money by creating a need for a taxable event.
