Crypto Trading and Taxes - The Past, The Present and The Future

A conversation with Oliver Mavher and Michael Deichsel, KPMG Austria

Trading with Cryptocurrencies/Digital Assets/Digital Commodities/Tokens has been technically challenging and a bumpy ride for over a decade.

Still, in 2021 many limiting hurdles exist that prevent this new asset class from going entirely mainstream.

One of those hurdles is a bit of global uncertainty around the regulatory environment and tax laws regarding digital assets.

The History of Crypto Investments

Looking back on its history, many high financial experts looked at it with doubt and said suspiciously at its best, it is rat poison squared.

The crypto craze up to 2017 primarily was driven by technicians and some nerds who believed this novel technology might one day replace the U.S. dollar as a reserve currency.

The tech people worked hard to move the technology forward.

Each price hike cycle of bitcoin before 2017 mostly brought more technical experts to the trading table and almost nobody outside this community.

All changed in 2017 when something unique happened.

Instead of financial experts at Wall Street picking up the opportunity at scale, which is the usual pattern for every company that skyrocketed in the private and public sector, retail investors began front running this opportunity.

The first Bitcoin Millionaires evolved out of the ecosystem and started creating more and more start-ups focused on building the ecosystem further.

And yet, high finance still ignored that space, which left many questions unanswered.

What are those tokens?

Is it an asset, a commodity, or a replacement to currencies?

2021 - The Next Crypto Craze Cycle

It is a question that I am pretty sure the tech experts in the crypto community can quickly answer for themselves.

Yet, regulatory and tax authorities have just begun to create the definitions that, in the end, create legal consequences for the owners of digital assets/currencies/commodities.

Looking on the government side, China completed its ban on trading cryptocurrencies, mining cryptocurrencies, or running a crypto exchange.

Other governments like Brasil, Ukraine, Venezuela, or El Salvador are in the process of adopting cryptocurrencies as legal tender, which means that every shop owner needs to accept a transaction when the counterparty wants to use a specific cryptocurrency.

As a result, the prices of almost all tokens went up since last year’s fall. The first price hike stopped in April 2021 when Bitcoin hit an all-time high of around 65,000 USD per coin.

All other cryptocurrencies followed the pattern of the top dog.

Was that it?

Experts like Michael Saylor, Cathie Wood, or Raoul Pal predict that the price should increase further as a result of the mass adoption that has just begun.

But what about taxes?

Falling down the crypto rabbit hole sometimes makes people forget the real world.

On the internet, I saw once a video of a person who made a fortune with crypto assets, and yet, as he doesn’t dwell longer than 179 days in one place, he claims that he doesn’t need to pay taxes.

Since I saw such statements, I wondered - is that possible that tax authorities have a blind spot here still in 2021?

The questions that I consider relevant for everybody owning digital assets:

  • What if someone gets paid in Bitcoin or other Cryptocurrencies? Is that a taxable event?

  • What if someone invests in those novel digital assets and they gain in value?

  • Does the location of the wallet or crypto exchange make any difference for taxation? Which tax law is applicable?

  • What about European ETFs and their offshore counterparts that replicate the price of digital assets?

  • What about investments in companies that invest in digital assets?

  • Are there differences between retail investors, investment funds, and other institutional investors?

  • And many more questions similar to the above

Who are the Tax Experts in this Episode?

I am delighted to welcome

to find answers to a multiverse of questions around crypto investments and taxes.


Do you want to learn more about Taxes and Crypto Investments and chat directly with

Then join our conversation:

Register Now


Noteworthy Articles:

New York and Texas are winning the war to attract bitcoin miners New data shows that many of America's bitcoin miners are based in New York, Kentucky, Georgia, and Texas. Read more…

Older Americans Stockpiled a Record $35 Trillion. The Time Has Come to Give It Away Baby boomers and older Americans have spent decades accumulating an enormous stockpile of money. At the end of this year’s first quarter, Americans age 70 and above had a net worth of nearly $35 trillion, according to Federal Reserve data. That amounts to 27% of all U.S. wealth, up from 20% three decades ago. Their wealth is equal to 157% of U.S. gross domestic product, more than double the proportion 30 years ago, federal data show. Read more…

Better Vaccine Stock: Moderna or Novavax? Some investors have made fortunes since early 2020 by investing in COVID-19 vaccine leaders. Moderna (NASDAQ:MRNA) has delivered a return of more than 1,500% since the beginning of last year. Novavax (NASDAQ:NVAX) has been an even bigger winner, with its shares skyrocketing by almost 4,000%. Which of these vaccine stocks is the better pick now? Here's how Moderna and Novavax stack up against each other. Read more…


LISTEN TO THIS EPISODE OF THE LSG2G PODCAST HERE

A new year brings new tax rules.

Astrid Woollard and Christian Soschner asked the Tax Experts of KPMG Austria to update the audience on the newest regulations in Austria.

We also had a chance to talk about tax advisors’ and auditors' roles in the start-up economy.

Listen to this episode to learn what's new and when to consult advisors.

If you have questions after listening to the episode, reach out to Michael and Oliver.

LISTEN TO THIS EPISODE OF THE LSG2G PODCAST HERE


Community Partner:

These companies make the community, this newsletter, and the LSG2G Podcast possible, so go check them out and thank them for their support!

Partner Links


You are receiving the LSG2G-Letter because you either signed up or attended one of the events organized by LSG2G. Feel free to unsubscribe if you aren’t finding this valuable.

Nothing in this email is intended to serve as financial or investment advice. Do your research.