Do the funds paid in any world currency go into a pool to back the bitcoin or into the developers of bitcoin clients? What are the IRS requirements as to the value of ones account? The Norfed dollars where backed or made of precious metals and taken down by the federal coinage act. Thanks any info would be appreciated. All bitcoins are first issued to miners.
From there, miners use those coins for trade or exchange. So when you buy a bitcoin with cash, you are buying it from someone who owned it but initially it was obtained from a miner. If you are asking about trading on an exchange, then the exchange software matches up buyers and sellers. Since you are a buyer, it matches you up with someone that wants to sell or potentially several sellers that add up to what you want to buy. The sellers get the money and usually a small part of it goes to the exchange itself.
Bitcoin is neither a commodity or a fiat currency, but has characters of both. The value is derived from the scarcity since there will only ever be a finite amount of bitcoins, and before then there can only be so many at any given time, with no possibility of finding a new resource of them. The value is also derived from the liquidity perks that commodities and currencies have failed to offer, especially person to person, and over the internet. If you bought a bitcoin with usd, the person you bought it from no longer has a bitcoin and would have usd instead.
For the IRS you would most likely have to report your cost basis in US Dollars, and at reporting time report a gain or a loss if you sold them for cash. Short-term capital gains are treated as normal income and taxed in whatever bracket you are in.
Long-Term Capital gains are treated in a lower max different tax bracket. Unless explicitly prohibited you can hold anything in an IRA or Roth account Sign up to join this community. The best answers are voted up and rise to the top. Stack Overflow for Teams — Collaborate and share knowledge with a private group. Create a free Team What is Teams? Learn more. If I buy a bitcoin in USD who gets the cash?
Asked 8 years, 8 months ago. Active 3 years, 10 months ago. Viewed 17k times. Improve this question. Nicolai 1, 14 14 silver badges 14 14 bronze badges. Add a comment. Active Oldest Votes. When you buy an ounce of silver bullion at the coin store, who gets the money?
The person who held the coin before you did. Improve this answer. Another indication that recently purchased coins were sold is the very high number sold at a loss. In fact, Glassnode noted that the number of coins sold at a loss was so high that it hit levels historically marking a bottom. Longtime readers know that I never invest based on trying to pick a bottom.
We can never tell a bottom until it is in. You can see on the chart below that after nearly a year of more bitcoins being sold for profits, the trend reversed sharply in the last few weeks. Not quite as sharply as when the Covid panic hit last March, but definitely fast and furious. It sure looks as if some big buyers stepped in based on the over-the-counter desk flows, which is where the institutions trade.
The same coin can trade at different prices on different exchanges. A lot of the institutions use Coinbase, so the higher price seen on that exchange indicates a lot of institutional buying in the United States. Business intelligence firm MicroStrategy , one of the first companies to invest its cash in Bitcoin, was one of those whales that took advantage of lower prices. I believe that is his first Bitcoin purchase. Regular readers know I am a Bitcoin bull. It may fall more before it resumes its march to new highs, but the transformative change enabled by blockchain and cryptos is so big that I am more confident than ever in higher prices.
And select altcoins should multiply their money even more. As long as their potential to transform much of our world remains on track, I expect to see more big gains in the next five years. On the date of publication, Matthew McCall did not have either directly or indirectly any positions in the securities mentioned in this article. Click here to see what Matt has up his sleeve now.
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The above widget is provided by a third party provider (MoonPay) and is not associated with vandoctor.ru Fees may be higher than some other Bitcoin exchanges. What is Bitcoin (BTC)? Discover this cryptocurrency and start to buy and sell Bitcoins quickly and securely with Swissquote. Invest in Bitcoins now! Find a UK cryptocurrency exchange that offers a preferred deposit options such as bank transfers orcredit/debit card purchases to buy Bitcoin.