We are pretty sure you’ve heard a fair bit about cryptocurrency over the past few years. It makes the news time and time again for its popularity and the insatiable demand it has experienced, the potential for huge profits and losses as an investment and the growing opportunities linked with it.
But what is cryptocurrency exactly?
In a nutshell, cryptocurrency is an asset purely in a digital form. Your ownership of any cryptocurrency is stored on a secure online ledger, and there is no physical form to it. It had been designed to be an alternative to money, a medium of exchange of goods and services.
One of the biggest appeals of cryptocurrency is the secure way in which transactions are managed and recorded. Using a decentralised technology called blockchain, cryptocurrency transactions are spread across many computers, thus increasing security exponentially.
Although the purpose of cryptocurrency is to exchange it for goods and services, one of the biggest appeals of the concept is buying, trading, and selling the unregulated ‘currencies’ for profit. The most popular cryptocurrency is Bitcoin which is renowned for its volatility and the resulting potential for lucrative gains; however, there are more than 10,000 currencies that are publicly traded.
Cryptocurrency is a $1-2 trillion USD market, and it is certainly a concept that is drawing the attention of investors everywhere. With the ability to trade crypto for real estate or businesses or sell it for cash, your options are extensive when focusing on the potentials available.
However, there are tax implications that need to be considered when selling or trading cryptocurrencies because many Australians incorrectly assume that the anonymity of this market allows them to neglect to mention their investments.
The ATO have and use very sophisticated monitoring technology that is continually updated and improved upon. This enables them to understand your investment activity, so it is important to declare what needs to be done to avoid suspicion.
If you’re a little unsure about your steps regarding investment declaration or would like some advice or support regarding your ventures into the realm of cryptocurrency, the team at YBM are well equipped with the information and experience that you need to provide you with the confidence and knowledge to proceed with your investments.
By discussing your short and long-term goals with us, we can ensure that you are doing everything you need to achieve them. So get in touch today to see what we can do together about making your future a little more secure.