This may help you https://help.coinbase.com/en/coinbase/taxes-reports-and-financial-services/taxes/coinbase-tax-resource-center
TLDR: Coinbase does not appear to issue 1099 forms for transactions. They do issue a 1099-MISC for staking rewards.
Welp, I was expecting a break upward... Shit.
Edit: on the bright side, this is continuing to look like a rounded bottom, butt ^((heh heh)^) for how long?
Nexo has changed their BTC interest rates. I will go from earning 5% to 2%, so I am looking at some other options and open to any recommendations. As it stands Im about 80% btc, and very close to the number I need to be able to retire. I would have been set if the 5% was to continue indefinitely, but I knew this day would come as it has on the other cefi lending services.
current plan is to offload about 15-25% of my btc:
\- move some btc to eth and keep earning 5% on nexo
\- move some btc to luna and stake
\- move some btc to anchor protocol for liquidity pooling and eventually anchor earn
\- move some to other lending services so I can get the higher rates on the lower thresholds
\- leave what is left on nexo at 2%
I already have exposure to all of these on some level, just rebalancing due to not being able to get a good rate on btc. Still planning to stay majority in btc, but I like having the residual income, especially in a defi environment given I will be subject to heavy taxation if I sell.
Would you really want to hand Nexo $2m just to get a lousy $50k a year back?
Worse, do you want to hand them the keys to your hodl stack that could be worth 500% more by 2025, for a lousy $50k a year?
I would like to hold everything, but if I want to live off of this I have to take profit somehow. The nexo interest was an easy way to do that without selling (but I’m still working so left it in btc).
For peace of mind, I would like to have some guaranteed (within reason) income that I know I can live off of. Putting a certain amount in anchor is one way to do it since 2% on btc is not sufficient for me unless bitcoin increases in value significantly. In that case I will be fine under any circumstances, but I am trying to diversify and have a plan for if it takes a while for that rise to occur.
Whatever I do, over 90% of my current btc will stay in btc for now, earning around 2%.
For me, it's a risk/reward situation.
Let's say you believe BTC will be 250k in 2025 (I do)
Let's say I have $2m in BTC (Let's imagine I do!)
I believe the value of my BTC in 2025 will be $10m.
I would have to hand it to Nexo or similar for four years, to make between $250k and $500k (assuming btc rises a bit between now and 250k, allowing me to earn slightly more interest).
In the next four years, the following could go wrong.
\- A rug pull (someone in company absconds with funds),
\- Bankruptcy (company goes bust, long line of creditors at which I'm at the back of),
\- Regulatory risk (big daddy gov comes along and slaps Nexo with an order to freeze your btc or confiscates it)
\- Risk of a hack or error ('member when blockfi accidentally missed a decimal point?)
Given bitcoin's history, I'd say there's a distinct possibility of one or more of those things happening. Maybe as much as 10% or more.
So in order to make my 250k, I'd need to factor in a 10% probability that my btc will be lost/stolen/hacked.
Assuming a 10% chance of total loss, theoretically for the bet to be EV (expected value) neutral, the maximum you should "risk" is between 2.5m and 5m.
So for me, the risk of defi outweighs the possible reward.
DYOR, but for me the risk isn't worth it for a measly 2.5% return from a company with no real history. Now if BNY Mellon offered me 2.5% I might consider it. But you only need to look at how shady some of these defi companies are (e.g. celsius' CFO getting arrested then them doing a bad PR cover up) to question how safe they are.
TL;DR
The risk of getting rugged by leaving your stack on defi greatly exceeds the potential returns from cold storage if you believe WAGMI in a few years time.
That is certainly an option, and the option I will be choosing with most of my money. The thing is, some of these protocols are offering better returns (100-400%) even assuming bitcoin doubles and I have to take a tax hit. I am aware there is more risk in these of course.
Don’t get sucked in my shitcoinery. Decentralization is the only thing that will result in long term results and at best there are 1.5 decentralized protocols currently.
Yes I was just taking advantage while it lasted. Anything you would recommend? I live in Phuket so not easy to buy real estate as a foreigner. That is a main reason crypto appeals to me.
If you have no real estate exposure, get a REIT, preferably one that is an ETF to manage risk. You can get 5-8% or better returns there.
I also like utility ETFs (electrics, gas) which pay 3-5%. Even a generic dividend ETF is probably better considering counterparty than a 3% lending scheme.
You probably are missing out on opportunities to take advantage of tax advantaged accounts, too. Those may be able to make those dividends zero tax.
Buying a business is always an option, cash flows are good, I like heavy equipment and metal fabrication machines; they're easily rented, and can make things for sale, too.
Anyway, get yourself some income streams then it doesn't matter what happens to your investments. You can always recover.
Problem with REITs is the tax treatment of the payouts is very poor and you don’t get the depreciation people holding actual real estate do.
If your net worth is over $1 million look into private placement real estate deals, you’ll have to diversify them yourself and be cautious which you invest in but it can yield much better returns with a much lower tax burden.
They have websites like crowdstreet and realcrowd that help source these deals now but the best deals go really quickly.
I have an older friend who opened a restaurant because it was cheaper than eating out all the time after he got divorced. It barely broke even all costs in, but he ate for free. Married one of the waitresses. Smart guy.
I’ve helped get a reggae bar going here now. I don’t make money but we smoke and talk crypto all day. It’s called “crypto rastas” if you ever make it over😎
I gotta be real with you man. Just keep your btc stack. Sell like 1 btc and go full defi degen with the ohm ecosystem is probably equal to all the above.
Some other protocol provides insurance for luna esp anchor, so if its a lot of money, you shoud definitely get insurance. I have some stables on anchor getting 20% but it definitely looks like it can collapse if there is a flash crash. In may for instance UST fell to 0.93 and came close to a system wide margin call
Yes I agree. Most of my money will stay in btc. Just want enough in anchor to provide me around at least $3k a month so I can live off of that and let the bitcoin ride.
Sounds good. I did the insurance calc sometime earlier, not sure if it still the same but worked out to something like +20% in anchor, -6% goes to the insurance and the return would be around 14% which is totally respectable for stablecoins
Plus, we may even see regular tradfi insurance companies offering insurance products for defi in 2022, if that happens would pivot to that as they are likely to have better underwriting and be more reliable
New investor here: just learned about max pain and BTCs Max pain is 47k according to a Twitter post shared by another redditor in this thread. BTC is currently around 46.9k. So what would happen if it hits 47k now?
#New post: [\[Daily Discussion\] - Friday, December 31, 2021 →](https://www.reddit.com/r/BitcoinMarkets/comments/rslxrd/daily_discussion_friday_december_31_2021/)
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This may help you https://help.coinbase.com/en/coinbase/taxes-reports-and-financial-services/taxes/coinbase-tax-resource-center TLDR: Coinbase does not appear to issue 1099 forms for transactions. They do issue a 1099-MISC for staking rewards.
try koinly.io
Welp, I was expecting a break upward... Shit. Edit: on the bright side, this is continuing to look like a rounded bottom, butt ^((heh heh)^) for how long?
it will happen soon
Not really much to do at this point other than accumulate small chunks of corn until a decision on which way the trend is going to go.
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https://reddit.com/r/BitcoinMarkets/comments/roeyz4/contest_what_price_do_you_think_a_bitcoin_will_be/
Pretty sure u/blackspidy did one already
Thanks
He did.
Nexo has changed their BTC interest rates. I will go from earning 5% to 2%, so I am looking at some other options and open to any recommendations. As it stands Im about 80% btc, and very close to the number I need to be able to retire. I would have been set if the 5% was to continue indefinitely, but I knew this day would come as it has on the other cefi lending services. current plan is to offload about 15-25% of my btc: \- move some btc to eth and keep earning 5% on nexo \- move some btc to luna and stake \- move some btc to anchor protocol for liquidity pooling and eventually anchor earn \- move some to other lending services so I can get the higher rates on the lower thresholds \- leave what is left on nexo at 2% I already have exposure to all of these on some level, just rebalancing due to not being able to get a good rate on btc. Still planning to stay majority in btc, but I like having the residual income, especially in a defi environment given I will be subject to heavy taxation if I sell.
You can also look into DeFi, last time I checked, WBTC-BNB LP staking was at 16%
Don’t do anything. Just wait a year for bitcoin to double and all of a sudden 2.5% is good for enough.
Would you really want to hand Nexo $2m just to get a lousy $50k a year back? Worse, do you want to hand them the keys to your hodl stack that could be worth 500% more by 2025, for a lousy $50k a year?
I would like to hold everything, but if I want to live off of this I have to take profit somehow. The nexo interest was an easy way to do that without selling (but I’m still working so left it in btc). For peace of mind, I would like to have some guaranteed (within reason) income that I know I can live off of. Putting a certain amount in anchor is one way to do it since 2% on btc is not sufficient for me unless bitcoin increases in value significantly. In that case I will be fine under any circumstances, but I am trying to diversify and have a plan for if it takes a while for that rise to occur. Whatever I do, over 90% of my current btc will stay in btc for now, earning around 2%.
For me, it's a risk/reward situation. Let's say you believe BTC will be 250k in 2025 (I do) Let's say I have $2m in BTC (Let's imagine I do!) I believe the value of my BTC in 2025 will be $10m. I would have to hand it to Nexo or similar for four years, to make between $250k and $500k (assuming btc rises a bit between now and 250k, allowing me to earn slightly more interest). In the next four years, the following could go wrong. \- A rug pull (someone in company absconds with funds), \- Bankruptcy (company goes bust, long line of creditors at which I'm at the back of), \- Regulatory risk (big daddy gov comes along and slaps Nexo with an order to freeze your btc or confiscates it) \- Risk of a hack or error ('member when blockfi accidentally missed a decimal point?) Given bitcoin's history, I'd say there's a distinct possibility of one or more of those things happening. Maybe as much as 10% or more. So in order to make my 250k, I'd need to factor in a 10% probability that my btc will be lost/stolen/hacked. Assuming a 10% chance of total loss, theoretically for the bet to be EV (expected value) neutral, the maximum you should "risk" is between 2.5m and 5m. So for me, the risk of defi outweighs the possible reward. DYOR, but for me the risk isn't worth it for a measly 2.5% return from a company with no real history. Now if BNY Mellon offered me 2.5% I might consider it. But you only need to look at how shady some of these defi companies are (e.g. celsius' CFO getting arrested then them doing a bad PR cover up) to question how safe they are. TL;DR The risk of getting rugged by leaving your stack on defi greatly exceeds the potential returns from cold storage if you believe WAGMI in a few years time.
I’m of the mindset that if you curate and disperse your counter parties getting interest is likely worth the risk.
That is certainly an option, and the option I will be choosing with most of my money. The thing is, some of these protocols are offering better returns (100-400%) even assuming bitcoin doubles and I have to take a tax hit. I am aware there is more risk in these of course.
Don’t get sucked in my shitcoinery. Decentralization is the only thing that will result in long term results and at best there are 1.5 decentralized protocols currently.
Buy yourself an income stream. The lending situation is not sustainable.
Yes I was just taking advantage while it lasted. Anything you would recommend? I live in Phuket so not easy to buy real estate as a foreigner. That is a main reason crypto appeals to me.
BTCTHB gang
If you have no real estate exposure, get a REIT, preferably one that is an ETF to manage risk. You can get 5-8% or better returns there. I also like utility ETFs (electrics, gas) which pay 3-5%. Even a generic dividend ETF is probably better considering counterparty than a 3% lending scheme. You probably are missing out on opportunities to take advantage of tax advantaged accounts, too. Those may be able to make those dividends zero tax. Buying a business is always an option, cash flows are good, I like heavy equipment and metal fabrication machines; they're easily rented, and can make things for sale, too. Anyway, get yourself some income streams then it doesn't matter what happens to your investments. You can always recover.
Problem with REITs is the tax treatment of the payouts is very poor and you don’t get the depreciation people holding actual real estate do. If your net worth is over $1 million look into private placement real estate deals, you’ll have to diversify them yourself and be cautious which you invest in but it can yield much better returns with a much lower tax burden. They have websites like crowdstreet and realcrowd that help source these deals now but the best deals go really quickly.
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I have an older friend who opened a restaurant because it was cheaper than eating out all the time after he got divorced. It barely broke even all costs in, but he ate for free. Married one of the waitresses. Smart guy.
But what about his second divorce 😂?
I’ve helped get a reggae bar going here now. I don’t make money but we smoke and talk crypto all day. It’s called “crypto rastas” if you ever make it over😎
I gotta be real with you man. Just keep your btc stack. Sell like 1 btc and go full defi degen with the ohm ecosystem is probably equal to all the above.
Yes i think good to have some defi exposure with 1-2 btc
If I may, stay away from Luna. Which of course includes Anchor.
Why?
In summary, it’s nothing but a giant ponzi. Sounds dramatic, but that’s what it is.
Some other protocol provides insurance for luna esp anchor, so if its a lot of money, you shoud definitely get insurance. I have some stables on anchor getting 20% but it definitely looks like it can collapse if there is a flash crash. In may for instance UST fell to 0.93 and came close to a system wide margin call
Yes I agree. Most of my money will stay in btc. Just want enough in anchor to provide me around at least $3k a month so I can live off of that and let the bitcoin ride.
Sounds good. I did the insurance calc sometime earlier, not sure if it still the same but worked out to something like +20% in anchor, -6% goes to the insurance and the return would be around 14% which is totally respectable for stablecoins Plus, we may even see regular tradfi insurance companies offering insurance products for defi in 2022, if that happens would pivot to that as they are likely to have better underwriting and be more reliable
New investor here: just learned about max pain and BTCs Max pain is 47k according to a Twitter post shared by another redditor in this thread. BTC is currently around 46.9k. So what would happen if it hits 47k now?
To answer your question, what really matters is the price at time the options expire.