Is cryptocurrency a commodity for tax purposes?

If cryptocurrencies are treated for tax purposes as commodities rather than securities, the regulations gov- erning tax basis in stock dispositions may apply to com- modities by analogy. 12 The Commodity Futures Trading Commission (CFTC) has determined that Bitcoin and other cryptocurrencies are commodities.

Is Bitcoin a commodity CFTC?

The CFTC on Digital Assets and Cryptocurrencies Cryptocurrencies, including bitcoin, are properly defined as commodities because there can be a contract for future delivery of the specific Cryptocurrency.

Is cryptocurrency a commodity?

Cryptocurrencies Traded as Commodities Both bitcoin and ether, the cryptocurrency of the Ethereum network, are widely considered to be commodities by authorities at the Commodity Futures Trading Commission and the Securities and Exchanges Commission.

Does the SEC consider Bitcoin a commodity?

Bitcoin, for example, is considered a commodity under the Commodity Exchange Act. Gensler was formerly the chairman of the Commodity Futures Trading Commission, and he said it’s critical both government agencies work together to deal with crypto platforms that trade both securities and commodities.

How do taxes work on cryptocurrency?

Cryptocurrency is considered “property” for federal income tax purposes, meaning the IRS treats it as a capital asset. This means the crypto taxes you pay are the same as the taxes you might owe when realizing a gain or loss on the sale or exchange of a capital asset.

Is Stablecoin a commodity?

Commodity-backed stablecoins are essentially blockchain-based representations of commodities and are backed by reserves held by a central entity. Physical assets such as precious metals, oil and real estate are used to back commodity-backed stablecoins. Gold is the most commonly collateralized commodity.

Does Bitcoin have intrinsic value?

Since Bitcoin does not have any intrinsic value, its value is necessarily intersubjective, depending on how much each trader expects the rest of the market to behave. In the long run, there may be multiple stable equilibria for Bitcoin’s value: a million-dollar bitcoin price could be just as stable as one of $0.

Is Cryptocurrency a security SEC?

In recent years, the SEC has ruled that the two largest cryptocurrencies by market capitalization, Bitcoin ($1.2 Trillion) and Ethereum ($533 billion) are not securities, partly on the grounds that they are decentralized with no person or company in control of the cryptocurrencies.