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Old 01-07-2022, 03:31 PM   #41
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So maybe you crypto enthusiasts can help me rescue my $250 lost at Binance. I invested a tiny amount in bitcoin, Ethereum, and iota a few years back when I was just curious about the way the blockchains work. Then I lost interest and forgot about it. While I was sleeping some brouhaha occurred with Binance and US accounts were frozen. Now Binance has a US version. When this thread prompted me to look into it I discovered that I can log into Binance and see that I have $200+ but I am prompted to get it out since trading has been suspended for the US. Unfortunately I can't figure out how to get it out since trading is suspended with the US.

Have any of you experienced and solved this Catch 22?
nope, you're stuck.

this is where the whole "custodial" thing comes in. binance owns the keys, you can't do anything without their permission, as opposed to you owning the keys to your wallet.

the flip side, of course, is you have no one to call if you accidentally forget/lose your keys. everything is lost forever.
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Old 01-07-2022, 03:36 PM   #42
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Question: what is an NFT?
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Old 01-07-2022, 03:40 PM   #43
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Question: what is an NFT?
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Old 01-07-2022, 05:38 PM   #44
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nope, you're stuck.



this is where the whole "custodial" thing comes in. binance owns the keys, you can't do anything without their permission, as opposed to you owning the keys to your wallet.



the flip side, of course, is you have no one to call if you accidentally forget/lose your keys. everything is lost forever.


I mean, yeah, this is a darn good example and argument for self-custody. But what is the simplest solution that will stand the test of time, unlike every single other device in my entire life, which goes obsolete before the lifecycle of, say, any pair of my underwear? I have underwear that’s lasted longer than any iPhone I’ve owned. There is a bewildering array of self-custody gadgets and services and flavors on the market. Which of them are going to survive the market for one or two underwear years without going dark or getting hacked or lost or damaged and leaving me stranded somehow? Meanwhile Coinbase is the market leader, is US based, is embracing regulation, its cold storage/vault is pretty simple and, presumably, it’s encryption is constantly updated. What’s a poor HODLer to do?
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Old 01-07-2022, 07:50 PM   #45
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I mean, yeah, this is a darn good example and argument for self-custody. But what is the simplest solution that will stand the test of time, unlike every single other device in my entire life, which goes obsolete before the lifecycle of, say, any pair of my underwear? I have underwear that’s lasted longer than any iPhone I’ve owned. There is a bewildering array of self-custody gadgets and services and flavors on the market. Which of them are going to survive the market for one or two underwear years without going dark or getting hacked or lost or damaged and leaving me stranded somehow? Meanwhile Coinbase is the market leader, is US based, is embracing regulation, its cold storage/vault is pretty simple and, presumably, it’s encryption is constantly updated. What’s a poor HODLer to do?
it doesn't need to be complicated. i just store all my private keys in my password manager, which already encrypts everything and has backups in the cloud. add 2FA on top of that and it's basically impossible to hack.
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Old 01-07-2022, 07:54 PM   #46
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I will buy a little bit. But I don't want to catch a falling knife. Looks like the resistance level is $32,000.
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The Cryptocurrency Thread 2
Old 01-07-2022, 08:30 PM   #47
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The Cryptocurrency Thread 2

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I will buy a little bit. But I don't want to catch a falling knife. Looks like the resistance level is $32,000.


This x2. I’ve been dollar cost averaging on the way down…. I guess we’ll see how wise I’ve been in a few years?
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Old 01-09-2022, 10:28 AM   #48
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I am not sure what point you are trying to make. The question was what was the difference between a bitcoin ETF (if one were to exist in the USA) and holding bitcoin directly. The comparison between holding GLD and bullion is spot on. The ETF supposedly will hold bitcoin to back up its shares, but there will be potential counterparty risk and management fees. The SLV ETF last year changed its prospectus to say that it may not track the spot price of silver in volatile situations due to not being able to source the enough of the actual product. The same might be true of a bitcoin ETF.

When BITO came out, the sources I follow explained that BITO is a mechanism for large hedge funds to use the futures to do hedging and not a good vehicle for the average investor to invest in bitcoin. They said that there was a "contango" effect caused by BITO having to constantly roll over its futures contracts at higher prices in a rising market. This was said to drain off 15% or 20% of the gain annually. I am not sure if this effect would operate in revers in a declining market.

In any case, I think trying to compare BITO to a true bitcoin ETF is comparing apples to oranges.

The question was whether the lack of approval in the USA for a true bitcoin ETF is due to a desire to protect investors from a dangerous product. I think the approval of BITO and not the other ETFs was more due to wanting to help the "connected" financial entities more than protect the consumer.

If the motivation was to protect and it was seen as dangerous, why would Fidelity already be running a true bitcoin ETF in Canada?
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Old 01-09-2022, 02:08 PM   #49
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Same as gold vs a gold ETF. You do not have personal control over your bitcoin and you pay a fee for someone else to look after it for you

Gold ETF provides some value versus buying actual gold - you don't need to deal with physical storage, you can sell 1% of it, etc.



But none of those apply to crypto, so if one wants to invest in bitcoin, there doesn't seem to be any practical reason to prefer bitcoin ETF vs actual bitcoin.
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Old 01-09-2022, 02:54 PM   #50
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Holding pure bitcoin on your own wallet poses some risk of losing your keys etc. Keeping pure bitcoin on an exchange is actually holding an IOU from the exchange for some bitcoin.

With a bitcoin ETF, you can hold it in your brokerage account and you can buy and sell options on the ETF. At a price top you might sell calls or buy puts to hedge your bitcoin. You could also hold bitcoin in your wallet and buy puts on the ETF in your brokerage account to hedge the bitcoin in your wallet.

You can also hold the ETF in a retirement account to defer or avoid capital gain taxes. You could use a service like ITrustCapital to hold crypto in an IRA, but they also have fees.

At this point, you could also buy puts on BITO to hedge at a top. But I guess people don't have to worry about that right now :-)
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Old 01-09-2022, 03:02 PM   #51
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Holding pure bitcoin on your own wallet poses some risk of losing your keys etc. Keeping pure bitcoin on an exchange is actually holding an IOU from the exchange for some bitcoin.

But the risk is the same, it is just transferred to exchange. And while an exchange may have better security than a user, they are also a more attractive attack target for hackers - indeed there were cases where cryptocurrency was stolen from exchanges.



Quote:
With a bitcoin ETF, you can hold it in your brokerage account and you can buy and sell options on the ETF.

You can do this with actual bitcoin. Same as with oil, gold etc.



Quote:
You can also hold the ETF in a retirement account to defer or avoid capital gain taxes.

Too volatile, so regulators aren't likely to permit it. Even now none of "speculative" ETFs are available in most 401k trading accounts.
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Old 01-09-2022, 04:44 PM   #52
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I would prefer to buy a Bitcoin ETF inside my retirement accounts.

It is frankly terrifying to move actual Bitcoin from an exchange to a private wallet even though I have done it many times. One mistake and it is gone forever. Retail investors will never get past this.

Also for estate planning the wife would find it much easier to deal with an ETF or exchange before a Ledger, passwords and transfers.
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Old 01-09-2022, 06:17 PM   #53
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IMHO retail investors ("buy and let it grow") should not be investing in crypto; crypto coins are more like penny stocks and FOREX, you make money on volatility, not on growth.

This is also why I don't expect the institutions to allow crypto in retirement accounts. Mine don't even allow leveraged ETFs.
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Old 01-09-2022, 06:32 PM   #54
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I already hold GBTC and ETHE in my retirement accounts at TDAmeritrade. I would prefer not to be paying a 2% annual fee but at least they are at a discount to spot by -15% to -20% right now.

Leveraged ETFs also available like TMF or UPRO

With crypto’s volatility and its status as property from a tax point of view it is great for tax loss harvesting if held in a taxable account.

I was successful last year buying crypto high and selling low in taxable then buying low and selling high in retirement accounts. All the time maintaining a constant allocation of crypto, making over all gains and booking tax losses thanks to no wash sale rule.

Sadly I switched to retirement around $48k BTC and have to wait it out until I can swap back at a higher price. Could be a long wait.
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Old 01-09-2022, 06:38 PM   #55
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You're lucky. None of the 401k/IRA I have (Fidelity, etrade, vanguard) allow even leveraged ETFs.


Unsure whether or not what you describe is a wash sale. But you can do the same with commodities (which are also property and volatile).
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Old 01-09-2022, 06:39 PM   #56
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I already hold GBTC and ETHE in my retirement accounts at TDAmeritrade. I would prefer not to be paying a 2% annual fee but at least they are at a discount to spot by -15% to -20% right now.

Leveraged ETFs also available like TMF or UPRO

With crypto’s volatility and its status as property from a tax point of view it is great for tax loss harvesting if held in a taxable account.

I was successful last year buying crypto high and selling low in taxable then buying low and selling high in retirement accounts. All the time maintaining a constant allocation of crypto, making over all gains and booking tax losses thanks to no wash sale rule.

Sadly I switched to retirement around $48k BTC and have to wait it out until I can swap back at a higher price. Could be a long wait.
i don't understand the draw of things like GBTC. why not just buy it directly and avoid all those fees? if you care about tax loss harvesting, crypto's in a gray area such that wash sales don't apply to it.
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Old 01-09-2022, 06:40 PM   #57
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With crypto’s volatility and its status as property from a tax point of view it is great for tax loss harvesting if held in a taxable account.

I was successful last year buying crypto high and selling low in taxable then buying low and selling high in retirement accounts. All the time maintaining a constant allocation of crypto, making over all gains and booking tax losses thanks to no wash sale rule.
When you say crypto in taxable account, do you mean something like coinbase or wallet, or are you saying you buy GBTC in a taxable brokerage account?

If GBTC in taxable brokerage account, am I missing something regarding the wash sale rule treatment? I assumed that GBTC would be subject to the normal equity wash sale rules and capital gain tax rates?
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Old 01-09-2022, 06:51 PM   #58
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I assumed that GBTC would be subject to the normal equity wash sale rules and capital gain tax rates?
I'm also very skeptical this would pass IRS audit. If you sell gold for loss (taxable) and buy gold ETF in retirement, its pretty much the same.
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Old 01-09-2022, 06:55 PM   #59
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I buy GBTC and ETHE in my TDAmeritrade retirement account and sell it at a higher price ( hopefully). No taxes in that account of course.

Then I buy real BTC and ETH at Coinbase high and hope to sell it low (sounds funny)

Then back to TD again.

No wash sale problems if I did it all at Coinbase but I am trying to capture gains in retirement tax free and losses in taxible.

It has been kind of fun. My Coinbase history looks like the worst trader ever
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Old 01-09-2022, 08:04 PM   #60
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IMHO retail investors ("buy and let it grow") should not be investing in crypto; crypto coins are more like penny stocks and FOREX, you make money on volatility, not on growth.

I am betting this opinion doesn’t apply to Bitcoin. I plan to hold it for at least a decade.
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