Cryptocurrency is the next big market mover making waves in the investment space. Investors love the unique market volatility of the crypto asset class blended with metrics that can help swing fantastic profits for the most dedicated traders. There’s a lot to love about the cryptocurrency marketplace, but many people still don’t understand the benefits that these investment options offer.
Cryptocurrency acts like a stock and a fiat currency.
Investors often try to take advantage of double-threat asset classes. Real estate, certain gold commodities, and dividend aristocrats all offer their holders two streams of returns that compound into great, ongoing capital gains.
Cryptocurrencies fluctuate in price much like stocks, and ownership of “shares” of these commodities can be traded between different crypto assets, giving the entire marketplace the durability of stock market pricing with the flexibility of the forex space. Top all this with a market that literally never sleeps and the asset class becomes one of the most exciting new vehicles for traders to take advantage of when looking for great returns.
Capital gains function just like stocks.
While cryptocurrency offers a new approach to the trading landscape, the IRS implications of capital gains made in this marketplace remain in place throughout each tax year. Using a cryptocurrency tax calculator is the best way to make sense of your capital gains tax obligations on a yearly basis. Because of the constant uptime and price variation that goes into considerations surrounding cryptocurrency holdings, capital gains, and cost basis analysis, using a tax calculator to import your data directly from the exchange (or exchanges) that you use is the easiest and best way to calculate your tax rate and account status when it comes time to file your tax return with the IRS.
Cryptocurrencies offer a variety of different avenues for earning wealth, so a tax calculator help help you make sense of the long-term gains and short-term capital gains resting in your crypto wallet.
Earning value takes on many forms in the cryptocurrency marketplace.
Unlike the stock market, there are a great many ways to build a crypto portfolio that builds wealth over time. Trading with price swings—as an investor might with stock trading practices—is one way to build wealth, but it’s far from the only avenue for growth that a cryptocurrency investor can take advantage of.
Day trading in the crypto marketplace isn’t limited as in the stock exchange. Rather than the $25,000 day trading floor imposed on pattern day traders, crypto investors can move assets as often as they like with whatever assets they currently hold. Trading with speed is one of the best spaces for gains that investors can bring on board. Without the hefty restrictions imposed by the NYSE and brokerage firms that provide access, investors can lock in great profits without waiting for a massive growth event on their current holdings.
Another great space for crypto enthusiasts to lock in profit is with the staking and savings options granted through many cryptocurrency exchanges. Trading platforms like Coinbase and Binance offer their users the ability to stake trading pairs or place holdings into a “savings account” of sorts that each earn daily interest. This is a great way to rake in immediate profits that continue to grow over the long term with the rising price of crypto assets as a whole.
The cryptocurrency market offers investors a totally different look at an age old practice for growing a portfolio of wealth generating assets. Take stock of your current holdings and think about making an entrance into this fantastic new commodity option today.