Long Term Betting on the Bitcoin
Once again bitcoin is going through a turbulent period. After the IRS announced last week that it is to be treated as property rather than currency the value of a bitcoin dropped around 17%.
This is because users of bitcoin must now take capital gains into account when making a transaction. As the price of bitcoin fluctuates users must keep track of ever changing capital gains and losses in order to tally up the final year-end score for tax purposes. No doubt this idea has put many Americans off the idea of using the virtual currency.
At the same time, more retailers and online market places are beginning to accept the currency. The mobile payments company Square has just started accepting bitcoins. While bitcoins are fairly volatile this doesn’t necessarily prevent it being used as a form of payment.
In fact, now that there is some regulation in the US of how to treat bitcoins it is likely that more retailers will begin accepting them. However, at present it seems that bitcoin is a bad bet for those looking for short-term gains. The value of bitcoin changes on a daily basis and it seems that those who invest are in for a long haul.