Back to Crypto zeros, i am George, we’re all George in this video. I want to give you a brief update on what’s going on with bitcoin, but also talk about taxes, specifically this one gigantic loophole that still exists for crypto traders and that’s wash trading and with it. You could utilize situations like what’s going on right now and actually sell off some of your crypto and buy back immediately, but utilize that loss to offset some of the gains that you had in 2021. And with this rule, you could save a substantial amount of taxes in 2021 and i do believe a lot of whales may be taking advantage of this. So I’m going to explain what it is and you decide if it’s right for you first off looking at bitcoin.
It’s at 46 343, which is roughly the same place. It was yesterday, so bitcoin is still going sideways, still stalled at this moment and i’m sensing that there are a lot of people that are fearful. I see in the comments and there’s people that believe that there’s no way that bitcoin can come back up anymore, that it has formed the top already at 69 000 and we are heading into a bear market. I just don’t believe that, based on the fundamentals or the metrics that i keep seeing and they do not indicate that a top was formed at 69, 000
So right now, what we’re going through is just temporary. It’s natural.
We have seen many many many times in 2021, where we had a dip and bitcoin stayed specifically at 30 000 and it stayed there for months. So we still have a couple weeks left in december. So we could still see some tremendous movement within his last two weeks. However, if we don’t that’s, okay, because 2022 is upon us, and this cycle is looking like it’s going to be different in terms of the four year cycle may be extended to four and a half years or five years right. But let me show you some of these metrics, i’m talking about to kind of prove what i’m saying so take a look at this number one.
Let’S look at this metric, which is reserves. Okay, bitcoin reserves on exchanges keeps dropping more and more and more and yesterday, over 20 000 bitcoins was removed from the exchanges. This is probably done through otc if you’re not familiar with it check it out, but odc market is off the exchanges off the order book. So what whatever transactions happen does not affect bitcoin’s price directly, so you tend to see this a lot where you have a mass amount of bitcoin being removed right, yet the price doesn’t move, and i get for some of you guys, you’re thinking that just to make Doesn’T make sense, but the big whales that are buying they don’t want to cause the price to go up. They don’t want to cause a price to go up while they’re buying, because then they end up with less bitcoin.
So they make these deals through otc market and that’s exactly what’s happening behind the scenes you can see. The net flow continues to come out right and that shows that the reserves on the exchanges keeps dropping and it’s dropping and it’s dropping is dropping. This is one of the metrics i look at in terms of hey. What’S going on with bitcoin? Is there really a lot of inflows into exchanges because people are selling them off?
No, it’s the opposite: there’s actually a ton being taken off the exchanges and when it comes to bitcoin’s price, is simply supply and demand. It’S that easy right, so demand is dropping well and when it comes to bitcoin’s price is just supply and demand. So when supply drops and demand, even if demand stays the same well, the price will go up, but we know that that’s not the case. Demand is actually increasing and demand and supply, but we know that’s not the case supply and we know that’s not the case, because demand is actually going up while supply is going down so right now, what we’re saying, i believe, is temporary and that’s only one metric. There’S a lot more.
This also shows you a liquid supply. If you look at the blue line right, that’s just true holders ones that will not sell no matter what and you can see how that line continues to go up and up and up, despite despite the drops that we had even from 20 000 down to 3 800 right and when we dropped to 3 800 and when we dropped to 30 000, you could see how that line just keeps going up. Those are the true holders right. They they just continue to hold and buy and hold and buy now, there’s other things. If you look at the brand new article on cryptocross.
om by um by iron chain college right, he he looks at a lot. He look there’s a ton of charts in here. That’S looking at the profit and loss analysis and looking at different time periods within the last uh last decade. Basically going back to previous cycles. Take a look, it’s very detailed, but basically what he sums up is well.
This run is not over not over by any means and then there’s just other things: external factors that’s going on, for example, tokyo’s sbi group, which is a huge investment group, they’re launching an asset fund, because demand is really really high in japan. Right now, and this asset fund is made up of seven uh yeah, seven different crypto right. Of course, you got bitcoin they’re big into xrp ethereum, even bitcoin cash, litecoin, polka, dot and chain link, and the reason why they’re launching this is because there’s a lot of demand in japan right. So this also shows that demand is growing. And lastly, i just want to talk about this instagram, which is absolutely huge.
Uh. One of the social media giants is now actively exploring nfts. Now, let’s not forget, nfts are also part of crypto. They are running on top of a blockchain, specifically ethereum or polygon or solana right, so the bigger the base grows for nfts, the better it is for crypto as well. So this also shows you that demand is definitely growing and this will only help the whole ecosystem, including bitcoin.
Lastly, i want to talk about wash trading, but just to give a disclaimer, i’m not a cpa, i’m not an accountant, so anything that you do make sure you get some true tax advice from someone that’s licensed to do so in the u.s wash sale is still Legit and still open, but this loophole may be gone in the future, because congress recognizes it as a loophole and they may be shutting it down soon. So the the beauty of wash trading is this. Let’S say earlier: in the year, you bought a whole bunch of crypto in your portfolio and you happened to trade, some of them. You were swing trading or you sold off and took some profits right.
Maybe you didn’t sell everything, but you sold some, and you know what you have some capital gains. You have to worry about right now. You could utilize this to offset those capital gains. So, for example, if you bought some crypto recently you’re down 30 40 percent, you can sell them, take a capital loss and then buy them back immediately, so that your capital losses will offset your capital gains from earlier this year. So that is the beauty of wash trading that you can actually take advantage.
This you don’t have to wait. 30 days, like you do with stocks, you can sell off your losses and buy it back immediately and utilize the capital loss to offset your capital gains. So this is a tremendous loophole. This is a tremendous loophole at any time, crypto falls down significantly anytime, there’s a big correction. Well, this is one that you may want to consider if you have a ton of capital gains now, if you’re a true holder – and you didn’t sell anything at all, then you don’t have to worry about it, because you have no capital gains at all.
Capital gains. Only comes when you actually make a trade if you trade it for a stable coin. You trade it for another crypto, you just sold it off for usd any of those. Things counts as a taxable event and is a capital gain right, so uh. So if you’ve done any of that, you need to worry about taxes, but if you just held throughout this whole year 2021, without making any kind of trade, then you don’t have to worry about capital gains tax.
Now, if you do have a lot of capital gains, then you may want to consider this, because this is still legal and it can offset a lot of those gains now again: disclaimer, not a cpa or a financial advisor or a tax accountant. So make sure you seek professional help before you do this thanks for watching hit the like and subscribe to the channel and stay tuned for my next video alright, take care, guys, bye, bye,