Bitcoin - History, Regulation, And Taxes

Summary

Huge gains during the first six months of 2017.

Are Bitcoin and Ethereum commodities or currencies?

The CFTC defines the assets.

Tax issues for U.S. citizens.

Bubble markets, but the technological age means these assets are here to stay.

Digital currencies are all the rage in 2017. A decade ago these assets did not exist. Five years ago, they were a novelty for a few. Last year, cryptocurrencies began to get some press, and in early 2017 the infamous Winklevoss twins unsuccessfully attempted to convince the SEC to allow them to open a Bitcoin ETF product on the equity exchange.

Those poor Winklevoss twins seem to always come up on the short side of things when it comes to gratifying their collective egos. While they have hundreds of millions, they had to fight for in the court from the wildly successful Facebook (NASDAQ:FB); the twins argued it the company's technology was their idea at Harvard and not Marc Zuckerberg's. The twins settled with the enterprise, but they lost out on the billions in wealth the company created.

This year, the twins were all ready to go when it came to an ETF product to make trading Bitcoin a lot easier for market participants. After they had been turned down, the price of the digital currency exploded higher. The Winklevoss twins are two very smart cookies, they have been at the starting gate for two assets that have taken off beyond anyone's wildest dreams. However, while the two millennials have profited and now have enough assets to lead a privileged existence for the rest of their lives, they must feel jinxed. Facebook billions slipped through their fingers, and the SEC stood in the way of their Bitcoin ETF just a few short months before the price of the asset exploded to the upside.

Huge gains during the first six months of 2017

At the end of 2016, Bitcoin was trading at $986, and many analysts believed the price was at a bubble level. After all, in 2010, the price of the cryptocurrency was at 6 cents. At the same time, the price of Ethereum ended 2016 at around the $8 level.

https://seekingalpha.com/article/4085942-bitcoin-history-regulation-taxes

Valerie Krutanova