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>I know transaction costs in cryptocurrencies tend to be high by financial standards. What would be a normal transaction cost by financial standards?
You seem to be confusing transaction costs and management fees
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This whole regulation is unneeded. You can bring your money to a casino and put it all on zero. Or buy a thousand lottery tickets. But investing in risky businesses needs to be walled off to the wealthy. What we really need is the real consequences for fraud / false financial claims.
The Libertarian in me agrees but then I think of the psychology of how people approach casino gambling vs business investing. For the former, I feel like people know going in that the odds are in favor of the house and they come to terms with that by saying to themselves that its entertainment. In other words, they kind-of expect to get screwed. In business investing its the opposite. They really do think they stand…
I've always suspected that was part of the reason- it's simply far easier to defraud small fry who don't have the experience to spot fraud or the resources to prosecute it.
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If you bought the 4 currencies yourself, you'd have to pay capital gains taxes each time you rebalance.
unless you change your holdings into fiat thats not the case. You can rebalance with exchanging among your coins
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That 2% figure seems high. I know transaction costs in cryptocurrencies tend to be high by financial standards. Maybe that accounts for it. Also maybe by being one of the first to offer such a thing, they can charge higher management fees.
>I know transaction costs in cryptocurrencies tend to be high by financial standards. What would be a normal transaction cost by financial standards?
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The Libertarian in me agrees but then I think of the psychology of how people approach casino gambling vs business investing. For the former, I feel like people know going in that the odds are in favor of the house and they come to terms with that by saying to themselves that its entertainment. In other words, they kind-of expect to get screwed. In business investing its the opposite. They really do think they stand…
unless outright fraud has been established I've always suspected that was part of the reason- it's simply far easier to defraud small fry who don't have the experience to spot fraud or the resources to prosecute it.
Legal and diligence costs on most illiquid investments are tens of thousands of dollars. Anyone investing small amounts (a) can’t afford the diligence, (b) probably doesn’t know what they’re doing and (c) can’t afford to lose even that small amount. That attracts a specific variety of fraudster (see Bitconnect). We’ve seen this happen every time we break the wall between markets with high and low information assymetry.
I have attempted to duplicate this index fund manually by purchasing the top 25 cryptocurrencies (market-cap weighted) over the past year or so. I'll say that it was hardly worth the enormous work involved, and these index funds cannot come soon enough to non-accredited investors. In some cases it's not possible to do perfectly alone: NEO has a minimum unit of 1 coin, and so if you wanted it to not be overweighted, y…
You can get the overall market cap and percentages based on something like Coinmarketcap and then just set limit orders to buy/sell rounded to nearest coin requirement.
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Using a linear scale implies that the growth rate is independent of scale. Using a log scale implies that the growth rate is dependent on scale. Depending on your opinion of the market, choose whichever you wish
In the modern era of central bank capitalism, the dominant purpose of investment is to fight inflation, which is an annualized quantity, so using a linear scale is nonsensical for the most common practical purposes.
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This is a somewhat debated topic in cryptocurrency. IMO what you said is not the case. If gold and silver aren't treated "like kind", and facebook and google stocks aren't treated "like kind", why would bitcoin and ethereum be treated like kind? I'm not a tax professional, but I did consult with one, and they confirmed my hunch.
> If gold and silver aren't treated "like kind", and facebook and google stocks aren't treated "like kind", why would bitcoin and ethereum be treated like kind? For the same reason that, say, transferring your wealth from an Irish bank account to a German bank account doesn’t trigger a capital-gains event in the US? I.e., those other things you listed exist “within” the US financial system. Cryptocurrencies exist out…
This would be reported to the IRS by the UK financial institution under FATCA [1].
[1] https://www.irs.gov/businesses/corporations/foreign-account-...