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Top stablecoins shed $7B in May as traders redeem tokens en masse

blockworks.co

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Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#121

Post by mjul »

namdnay wrote: post #73
jen729w wrote: post #34

Earlier quoted context omitted.

> no issues with tax&bank issues Sure about that bit? This may be the perception – that holding your assets in 'the crypto system' avoids tax issues – but the taxman will disagree. Swapping $BTC for $USDC or whatever your tether of choice is is a 'taxable event'. You've sold one security in exchange for another. It doesn't matter that they're both crypto. Now, it might be harder for the taxman to detect this event, w…

Depends on the jurisdiction. In most European countries for example, you only pay tax when cashing out

Note that “cashing out” in some EU countries means transacting your cryptocurrency tokens in any way, not just trading them for money.

Example:

Sweden taxes your gains when you transact a cryptocurrency holding, also when you exchange from one cryptocurrency to another. [1]

Same for Denmark [2].

Check your relevant tax legislation for your local rules.

[1] https://skatteverket.se/privat/skatter/vardepapper/andratill...

[2] https://skat.dk/skat.aspx?oid=8953

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#122

Post by swinglock »

uwuemu wrote: post #84
jen729w wrote: post #34

Earlier quoted context omitted.

> no issues with tax&bank issues Sure about that bit? This may be the perception – that holding your assets in 'the crypto system' avoids tax issues – but the taxman will disagree. Swapping $BTC for $USDC or whatever your tether of choice is is a 'taxable event'. You've sold one security in exchange for another. It doesn't matter that they're both crypto. Now, it might be harder for the taxman to detect this event, w…

That makes no sense. You pay taxes on realized gains (i.e. when you cash out), not unrealized ones... otherwise people like Elon Musk would have to pay tens of billions of dollars in taxes and sell off part of their stock to even be able to pay the tax (and probably ruin the company in the process). The same applies to crypto, and even though it's mostly not needed (you pay tax on realized gains in most countries and…

You do pay taxes on realized gains, but they are realized when you sell the asset, not then you "cash out", and it makes perfect sense.

There are many true horror stories of amateur traders going from in the green to losing more than they own. I don't know any place where what you describe is legal.

If this is your strategy (as in method to cheat with taxes) now is probably a good time to calculate how much you owe and put that aside into something less volatile, not to accidentally ruin your life.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#123

Post by deadbunny »

logifail wrote: post #93
namdnay wrote: post #73

Earlier quoted context omitted.

Depends on the jurisdiction. In most European countries for example, you only pay tax when cashing out

> when cashing out Cashing out meaning "selling crypto for fiat"? What about if you sell BTC for another crypto or for gold or ...

In the UK swapping between crypto is a taxable event.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#124

Post by dmitriid »

exdsq wrote: post #82
mindwok wrote: post #68

Earlier quoted context omitted.

Does this really matter though? Is it any different to drug lord having a tonne of dirty cash they can’t use anywhere because all the useful places you could put it want nothing to do with you? Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world.

> Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world. Say this is true, how amazing would that be for countries without existing banking infrastructure to easily access it?

So the countries would have access to stable internet (can't have crypto without it).

This access is fast and cheap enough for unbanked people to access it.

These unbanked people would also have access to things like smartphones and computers because crypto doesn't exist in real world.

And yet those countries would not have banking infrastructure.

Nice. Nice.

Any such countries exist?

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#125

Post by web4 »

Closi wrote: post #87
web4 wrote: post #62

Earlier quoted context omitted.

and now there is one more way to do that: crypto. it is like asking “Why Does PayPal Exist When We Have iBAN?” obviously some subset of the globe finds it more useful than iBAN transfers for their needs (like setting up an online shop).

So you have friends that you transfer crypto to if they need to purchase something at a shop and don’t have the funds? God that whole process sounds painful. In the Uk we would just transfer the money across with a bank transfer as all banks support instant transfers which have no fees (including between banks).

not everybody lives in the UK.

the point is not to be a system that beats a single service for sending GBP from A to B in the UK. the point is a system that has a variety of uses and applications accessible by anybody, regardless of which country the user resides in.

even in countries with good banking like UK, many e-commerce companies will still choose Stripe VISA and PayPal to reach customers outside the UK and integrate a payment processor API. an online shop could offer crypto as a payment mechanism if they wanted to avoid using these companies and if it met their needs.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#126

Post by tirpen »

TekMol wrote: post #30
ur-whale wrote: post #19

Earlier quoted context omitted.

> Who and why? IIUC: a) exchanges for short-term liquidity b) traders for whom going in and out of actual USD is a giant PITN Or to put it differently: when you want to trade on e.g. Binance, it's a lot easier to trade in and out of Binance's stablecoin than in an out of actual USD.

I associate the term "short-term liquidity" with money that can be used to pay employees and suppliers. Are exchanges really holding stablecoins for this purpose?

No, Crypto isn't used by people who have "employees and suppliers", those people use currencies instead.

The crypto community just like to co-opt all sorts of terms from economy to give themselves a veneer of faux credibility.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#127

Post by KaiserPro »

unityByFreedom wrote: post #100
Animats wrote: post #25

The big question with Tether has been, if they are holding commercial paper, whose commercial paper? Traders who deal in commercial paper of real companies that do real stuff don't see Tether present in that market. The dollar amounts are too big to hide. The suspicion is that their "commercial paper" is high-interest loans to other cryptocurrency companies. With the whole crypto sector in decline, those loans are at…

> This is how you get a 2008-type crash - loans which seem to be unrelated but are tied to a common market. How does this happen again 15 years later? Is it because we ineffectively dealt with 2008? A result of the repeal of Glass-Steagall? Or have we over regulated banking to the point the miscreants went underground to build things like crypto? I don't get it. Crashing over and over doesn't seem good for anyone.

Its an unregulated market.

People are convinced that since its cryto, it won't be vulnerable to the same old issues that every other traded instrument has had since the south sea bubble/tulip mania.

the 2008 market crash was similar as you pointed out, in that it involved wholesale fraud (using a subset of good mortgages to market worthless ones) that were "validated" by ratings agencies.

Here, there were no real third parties to provide ratings. Just people saying "Look its crypto, you can loose because its backed by real something or other"

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#128

Post by dmitriid »

web4 wrote: post #114
KennyBlanken wrote: post #98

Earlier quoted context omitted.

The 'wire process' is not "multi-day-long", plus a huge number of banks now participate in Zelle, which can be used for instantaneous fund transfers with zero fees. The biggest problem with Zelle is that it looks and feels like a circa-2002 web application.

many wires will be multi days long, encumbered by weekends, holidays, business hours, international checks, and occasional bounces (ask any company their experience with wires for international contractors). Zelle is between US banks only. some people live outside of the US, surprisingly.

The EU has now mandated fast transfers between banks in the EU.

So, for EU (23 countries) it's not a problem either.

Sending money between banks is both a technical and a regulatory issue (and crypto is discovering why regulations exist at great cost to crypto users). However, "instant money transfer between banks" is not an unsolved issue.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#129

Post by hihihihi1234 »

TekMol wrote: post #11

What are people holding all those stable coins for? In contrast to other crypto currencies, nobody is holding it for speculation. I doubt anybody expects stable coins to be a better store of "dollar value" than the dollar itself. Yet, someone holds those $150B worth of stable coins. Who and why?

Speculation, tax avoidance and money laundering, mainly.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#130

Post by dmitriid »

nostrademons wrote: post #89
faeriechangling wrote: post #80

Earlier quoted context omitted.

So we should ignore that crypto is being used a fraction of the time as much as financial products that are worth several times less, because global markets are large? Should every product have a 1 trillion plus valuation because global markets are large? I just never actually see evidence that crypto has taken over global finance or is well on its way to doing so.

The point is that it's not being used a fraction of the time, because you take small fraction of total humans on earth (7B+) and it's a larger number than a large fraction of total humans in the US (320M). There are 100M crypto users in India, for example - that's only about 7%, but 7% of 1.5B is a larger number than 11.8% (market share of JP Morgan Chase, the largest U.S. bank) of 320M. Worldwide, crypto users are a…

I have a wallet and bought crypto once. Am I a user? By your statistics, yes. Do I even matter? No.

The only thing I used this crypto for is to sell it later (and gain something like 15 euro profit). Am I a user? By your statistics, still yes. Do I even matter? Still no.

Additionally this use case (trade crypto hoping for gains in actual fiat money) is the absolute vast majority of what crypto is used for. Is this replacing traditional finance? Ahahahaha, no. AliPay has a bigger impact on "traditional finance" than all of crypto now or ever.

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