Brian Kelly: Bitcoin perception is like the Internet in the 80s

Brian Kelly: Bitcoin perception is like the Internet in the 80s, not 90s

Brace for volatility: tomorrow is tax day for the US and cryptocurrencies are given no exemption.

In CNBC’s Fast Money, Brian Kelly, founder and CEO of BKCM LLC, said that the perceptions and conditions blockchain technology is currently in is comparable to the Internet back in the 80s—not the 90s.

“This is like the Internet in the 1980s. I used to think the Internet in the 95, but after the last couple of months talking to folks, I think we’re more like the 1980s. So, you know, I think this technology’s going to work, it’s going to be game-changing, but it’s very early days so we can have this massive volatility,” he said.

Kelly also tackled an impending volatility due to tax liabilities. Earlier this month, Fundstrat Global Advisors head of research Thomas Lee—who was also the former chief equity strategist at JP Morgan Chase, said that the looming tax filing deadline in the US tomorrow (April 17) could cause a massive selloff of cryptocurrencies, adding that the estimate amount owed by US cryptocurrency holders in taxes for their crypto gains is over $25 billion.

“This is a massive outflow from crypto to USD and historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value,” Lee said.

“Additionally, we believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions,” Lee said. “Many exchanges have net income in 2017 [of more than] $1 billion and keep working capital in [bitcoin]/[ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”

Kelly says that the tax deadline could cause a huge drop in cryptocurrency values, but that people have to see how things go after the deadline.

“Presumably after April 17th (deadline for tax liabilities in the US is April 15), if we can hold these gains, we’ll know that tax selling impacted—if you used Tom Lee’s work, we probably had about 500 to 600 billion dollars come off the market for tax purposes,” Kelly said.

He added that the problem with the way people view Bitcoin trading values is that they look at it as if it were a stock when in fact it isn’t.

“This is an open-source software, so you can’t think of it as a company, right? And I think that’s where people make a mistake—they quote market cap and say all that. This is not a stock, it’s not a company. It’s open-source software.”

Talking about negative news and price drops, Kelly says his favourite time to buy any asset is when bad news is dragging its price down. “That’s when I wanna buy any asset—whether it’s Bitcoin or not,” Kelly said.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Expect more price falls as tax deadline looms for US crypto owners

Expect more price falls as tax deadline looms for US crypto owners

As if the situation was not bad enough for cryptocurrency owners with prices plummeting as much as 80% from their all-time highs in some cases, further pressure on prices looms in the form of the April 15 tax deadline in the United States. A Reuters report quoted Fundstrat Global Advisors, which said the Internal Revenue Service (IRS) is owed as much as $25 million on capital gains taxes made on crypto currency prices which ballooned by over 1000% in some cases during 2017.

This tax deadline could lead to further selling pressure and correspondently on the prices of SegWit-Coin BTC (also known as Bitcoin Legacy or Core) and Ethereum, among others, in the short term. SegWit-Coin BTC is constantly losing value over the past days and a drop to the psychologically significant $6,000 is expected in the short term before a rebound. Ethereum has fared even worse trading at around $350, which is a full 300% less than its all-time high of $1,400 registered in January. Cryptocurrency owners are likely to continue selling off their holdings to convert to U.S. dollars to pay their taxes and this will probably put further pressure on prices, analysts said.

Commenting on the current situation regarding crypto currencies, Fundstrat co-founder and head of research Thomas Lee said: “We believe selling pressures (in crypto) have been amplified by capital gains tax-related selling this year.”

Fundstrat, however, remained bullish on SegWit-Coin BTC’s price in the short to medium term. Analysts reaffirmed its proposed target of $20,000 for the cryptocurrency by mid-year and $25,000 by end of year. Currently the coin’s price is around $6,600 with other cryptocurrencies also close to their 2018 lows. This is a far cry from the $20,000 price level it reached last December when growth fever had hit the crypto market in a big way. In fact, cryptocurrencies grew by no less than $590 million in 2017 compared with just $11 billion in 2016. Fundstrat also calculates that around 30% of cryptocurrency holders are in the United States.

Cryptocurrency exchanges who registered record profits in November and December 2017 are expected to face considerable tax liabilities. Fundstrat estimates the exchanges’ net income exceeded $1 billion in 2017 with most of the working capital kept in SegWit-Coin BTC or Ethereum. These currencies have to be converted to U.S. dollar in order to meet tax liabilities.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

source: https://coingeek.com/expect-price-falls-tax-deadline-looms-us-crypto-owners/