Business & Investment

Death from Thousand Cut — How the Government Is Breaking Bitcoin

Bitcoin was one of the worst weeks in history in May of this year. Between May 14th and 21st, the dollar value of 1 Bitcoin dropped from US $ 50,000 to US $ 35,000. This is a 30% crash in a few days.

There are still true believers (called HOD Lers) who hold Bitcoin from thick to thin. They are rewarded with tenacity every time and believe that this time as well. “Don’t be afraid!” Says Bitcoin supporters. Bitcoin has fallen a lot beyond its magnitude in recent years and has returned to new highs every time. that’s true. Therefore, it is premature to talk about the end of Bitcoin based on weekly price behavior.

US law will tighten reporting requirements

Bitcoin is a major source of CO2 emissions due to the energy used in the mining industry (true), Bitcoin is not a good storehouse due to volatility (true), Bitcoin is slow and therefore exchangeable The arguing that it’s not a good medium, clunky, and costly (real) transactions make no sense to the Bitcoin Group. Still, that doesn’t mean that everything works for Bitcoin Land.

As explained here, there is a new threat on the horizon paper.. The Biden administration is working on a major new tax law in line with its multi-trillion dollar deficit spending plan. Part of this new law is to allocate US $ 80 billion to IRS tax enforcement, including conducting audits and hiring thousands of new IRS agents to detect tax evasion.

Buried in the details of the proposal is a new regulation that requires the IRS to report all transactions in Bitcoin over US $ 10,000. If you withdraw or deposit cash from a bank, such regulations already exist. With cash transfers of US $ 10,000 or more, banks will submit a Currency Transaction Report (CTR) to the Financial Crimes Enforcement Network (FinCEN) for mutual reporting to the IRS. A Suspicious Activity Report (SAR) may also report a cash transfer of only US $ 3,000. Bank interest payments will be a 1099-INT report to the IRS. The same applies to dividends (1099-DIV) and payments to independent contractors (1099-MISC).

Taxation, regulation and ban on Bitcoin around the world

China has recently banned Bitcoin payments and is trying to regulate Bitcoin mining. Turkey also prohibits Bitcoin payments. Central banks and tax authorities around the world are focusing on Bitcoin to tax, regulate and ban it. This effort takes time. But the efforts of countries around the world may do more to limit the appeal of Bitcoin than a combination of all memes and stories.

in the meantime…

The pandemic virus crisis is now a mental health crisis

In Chapters 1 and 2 of my new book, New Great Depression, I will explain the origin of the pandemic from the Institute for Biological Weapons in Wuhan, China, and how the virus spread around the world through reliance on useless policies such as blockades and masks.

However, Chapter 5 investigates mental health disorders, one of the least reported and potentially longest-lasting heritage of pandemics. Most experts and almost all everyday citizens do not know how the SARS-CoV-2 virus can invade neural networks and brain membranes and directly affect cognition. More important is the long-term effects of adaptive behavior.

Adaptive behavior does not disappear in a hurry

For the past 15 months, the U.S. population has been threatened by blockades, quarantines, social distances, face masks, holiday skips, and now demands for injections of experimental genetically modified treatments (not true vaccines). rice field. People become antisocial and adapt by withdrawing. Disorders such as anxiety, depression, violence, substance abuse, alcohol abuse and suicide all increase rapidly.

The difficulty is that once the behavior adapts in this way, it is not easy to return to the pre-pandemic state. Adaptation behavior can last for years or even decades, unless there are similarly catastrophic events that cause new adaptations such as wars and natural disasters. Some people adapt more easily than others.This can lead to conflicts between those who can and cannot return to normal, as explained in this. paper..

Collision between “Mask Hall” and supermarket aisle

The New York supermarket chain has decided to eliminate the requirement for indoor masks for vaccinated people. They also did not seek proof of vaccination and said the unmasked policy would be essentially an honor system. This caused a fierce backlash from customers who claimed that they still needed masks and that they would continue to wear them indefinitely.

Some argue that anyone who is “scientifically knowledgeable” wears a mask, even though actual science has shown that it does not work. It was done “with a mask” and there was a backlash from customers who opposed the mask horror (known ridiculously as a “mask hole”).

Of course, the store owner was just trying to get back on track and was caught up in the bonfire of caustic comments from both sides. Expect more of this. Even if the pandemic subsides, overcoming fear is not easy. This fear of shopping, eating out, getting to the theater, etc. will continue to hamper economic growth even after the number of new cases of coronavirus approaches zero.

all the best,

Jim Rickers signature

Jim Rickers,
Strategist, Daily Reckoning Australia

PS: Our publication, The Daily Reckoning, is a great place to start your investment journey. Let’s talk about the big trends that drive the most innovative stocks in ASX. Learn all about it here.

Death from Thousand Cut — How the Government Is Breaking Bitcoin Death from Thousand Cut — How the Government Is Breaking Bitcoin

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