Tax free Bitcoin Investment options

in LeoFinancelast month (edited)

As we are in the BTC (and therefore crypto) upward part of the market cycle, more and more people have started accumulating significant profits. An unpleasant consequence is taxes. Some countries have a high capitals gain tax and some governments are currently thinking of increasing them with the justification (or rather excuse?) of the covid situation.

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Tax Free ways to profit from the BTC bull run in 2021

In this context, it is useful to mention ways that offer you bitcoin exposure (but not ownership) and are totally tax free. Most western countries offer you the ability to invest up to a certain amount of money on a specific kind of an investment account, where all your profits are tax free for the next of your life. Here, in the UK, we call this a "Stock & Shares ISA" account and can invest in it up to £20k per financial year.

Normally such investment accounts offer you a variety of stocks and ETFs, but no opportunity to directly buy bitcoin, e.g. by an exchange.
However, we can still find investment vehicles offered by such accounts, that offer us exposure to the bitcoin price, even if they do not allow us to own bitcoins.

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1. GBTC - Grayscale Bitcoin Trust

The Grayscale Bitcoin Trust is currently offered to US residents.

2. BTCEtc - Bitcoin Exchange Traded Crypto

Tax residents of Germany and Switzerland have access to the BTCEtc - Bitcoin Exchange Traded Crypto.

3. Bitcoin Tracker EUR XBT Provider

Tax residents in many EU countries have access to the
Bitcoin Tracker EUR XBT Provider.

4. MSTR:NSQ - MicroStrategy Inc stock

If no of the above options is available in your country, your last resort is the MSTR:NSQ - MicroStrategy Inc stock. MicroStrategy is a US IT company, whose stock is included in the NASDAQ index of the NYSE.

Michael Saylor (for my Greek friends "Μιχάλης ο Ναύτης"😀) is an iconic figure in the crypto space, as he was the first NASDAQ company CEO to decide to trade 100% of his company's USD reserves into Bitcoin in September 2020.

At the date I write this article (22/01/2021) his company owns 70,784 bitcoins of today's value of $2,277,616,768. That's more than $2 billions, if your eyes blinked...

Since he did this in September, the MicroStrategy stock price is highly correlated with the bitcoin price, as shown in the following chart.

BTC-MSTR correlation
Source

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Risks

As each one of these options does not offer direct bitcoin ownership, they come with the additional risk implied by the need to trust the institutions behind them. If they go bankrupt, you lose your money. Also, you need to carefully investigate the terms and conditions of each one of them, as well as potential charges.

So, please, do your own research or/and ask your financial/tax advisor, as I am not one. I am only expressing my personal opinions in this article.

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Hi @cryptovios

This is an informative post.

Thanks,
@shortsegments

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κανα κολπακι για την ελλαδα να μν φαινονται κτλ εχουμε? :P

btw amazing and very helpful post!

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Στην Ελλάδα αυτή τη στιγμή δεν υπάρχει τέτοιος λογαριασμός.
Όμως τον ετοιμάζουν τώρα και θα επιτρέπει μέχρι 6k το χρόνο: https://www.capital.gr/oikonomia/3497208/kosmogonia-allagon-gia-to-xrimatistirio

Δυστυχώς θα πάρει καιρό να εφαρμοστεί και θα έχει περάσει αυτό το bull run. Στα υπόψιν όμως για να συσσωρεύσετε 3*6k = 18k στα 3 χρόνια μέχρι το bull run του επόμενου κύκλου.

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@cryptovios, Δηλαδή αυτήν την στιγμή τι ισχύει ουσιαστικά; Πρέπει να δηλώνεις κάθε χρόνο όσα έχεις σε cold wallets και ανταλλακτήρια, ή πρέπει να τα δηλώνεις μόνο όταν τα μετατρέπεις σε χρήμα που πάει στον τραπεζικό λογαριασμό σου;

Πολύ καλό το άρθρο!

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Στην Αγγλία δε δηλώνεις την αγορά γιατί αυτή δε φορολογείται.

Δηλώνεις την πώληση ενός crypto είτε για Fiat είτε για άλλο crypto, γιατί αυτή φορολογείται.
Επίσης φορολογείται και η απόκτηση cryptos σαν αμοιβή για εργασία.

Στην Ελλάδα, δεν ξέρω, ρώτα λογιστή.

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Den yparxei tipota akoma stin ellada apo rythmiseis gia crypto, eidwmen. Ews tote Yolo paidia. Oi nomoi prosarmozwntai stis anagkes tis agoras. I agores den perimenoune tous nomous gia na kanoune douleies. prosarmozwntai ston dromo.

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