Data streams from Coinbase strongly suggests that Americans and recipients of the $1,200 helicopter money are channeling their portions to cryptocurrencies. This could be easily gleaned from a snapshot shared by Brian Armstrong, the CEO of Coinbase.
His screen grab reveals that there has been an uncanny spike of deposits or buys that are exactly the same as the $1,200 government check in April. Of note, there was a sharp spike in mid-April, this was when the US government began disbursing funds to cushion its citizens against economic hardships caused by the coronavirus pandemic.
CARES is a cushion against the Harsh Coronavirus
Dubbed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it introduces several forms of tax reliefs and most importantly, monthly payments that will cover for expenses during this difficult time.
The amount received is based by their adjusted gross income based on their most recent tax return filings. Most of these funds were disbursed in April and are not taxed.
$1,200 Stimulus cheques invested in Crypto and Bitcoin?
Because there are no restrictions on how these monies can be used, the sharp spike in the percentage of buys at Coinbase, the most popular cryptocurrency exchange in the united States, could suggest that these funds, instead of relieving taxpayers, some of whom have lost their jobs because of lock down, are placing bets with the expectations of gaining more in days ahead.
While the screenshot didn’t specify investors preference, odds are Bitcoin could be the main recipient. For two reasons. It is less than a month before the network halves its miner rewards.
— Brian Armstrong (@brian_armstrong) April 16, 2020
Second, Bitcoin is the most valuable with deep liquidity and perfectly decentralized. Not only can traders hold the coin but they can trade derivatives at different cryptocurrency exchanges approved by the CFTC.
Invest in Crypto but be Diligent
If taxpayers see opportunities in crypto and Bitcoin, it is vital that they keep track of the entry price. Crypto is considered property and there is capital gains tax whenever the underlying asset rallies.
Keeping track can be tedious and time-consuming but it is necessary since failure to correctly file tax returns can attract more penalties.
Future tax burdens will be higher and more so for day traders who enters and exits the market often. Every entry or exit is treated as a taxable event that must be captured and correctly reported.
Millions Unable to receive Stimulus checks
Still, there are taxpayers who are yet to receive their portion. It has been revealed that millions who filed tax reports through portals as Turbo Tax and H&R Block could not receive payments. Besides, some parents complain that the $500 promised for dependent children hasn’t arrived.
There are further reports that the IRS is sending stimulus checks to dead people.
At the time of press, Bitcoin (BTC) was changing hands at $7,087, up three percent in the last trading day.
Source: Coin Gape