Well Played FUD...

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I think I might be having withdrawal. I realized I didn't post a single Leo post yesterday. Sure, I made a lot of comments, but I didn't do a formal post. I pretty much knew what my feed was going to look like this morning.

With the price of crypto having another slight pull back (plunge if you listen to the media), it was a given that many people would be talking about it this morning. I noticed the story about the President's potential tax on capital gains from crypto and that sparked my interest a little.

Not enough to actually read the article, but enough that I figured that must be one of the factors driving the current consolidation.

Sure enough, there were a number of posts on my feed this morning about it and I happened to land on the one by @edicted.

As I was reading through the post I landed on the piece about the proposed tax being implemented on people with an income over $1m per year. I think that is what it said anyway.

It got me thinking...

We all know that events like these force the weak hands out of the market. People see news like that and they start dumping and it just ends up snowballing. Unfortunately, I think a lot of those weak hands in this case are probably people who didn't need to worry in the first place.

I am a long way from making $1 million per year. I'd venture to guess that many of the people who have been stacking crypto over the past several years are far from that number as well.

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It would take a very high Leo and Hive price in addition to my annual salary from my "real job" to even get me close to that point. I definitely think it is possible one day, but right now, not even close. Not even a hair of a reason to be dumping our holdings right now.

As they mentioned in the post, even if this does pass and it does impact you, we are still years(?) away from seeing it actually put into place.

The house passed a bill the other day that calls for a committee to be created. They expect once the committee is formed, they then need to discuss guidelines for the SEC to follow regarding cryptos. The timeline for that discussion... A full year!

Bottom line... This is not the time to be a weak hand. This is not the time to let the FUD monster worm its way into your head and make you second guess what you are doing in crypto.

Sadly, many people are going to miss out on an opportunity they desperately need because they are concerned about something that is going to have relatively zero impact on them.

Well played media... Well played institutional investors... Well played...


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40 comments
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Well, everyone has their own reasons to sell what they have in crypto, maybe it is because they put a lot of money and as they are losing they do not want the effort they worked so hard for to disappear, of course the fact that people sell en masse affects, but that is how the market is, some buy and others sell.

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They were fine holding until the news came out though. I get it can be a lot of money for some people, but that is why you should never invest more than you are willing to lose.

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I don't get why weak hands would sell. Are they making over a million? Crypto market stupidity never stops to amaze me.

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Yeah, that is what I was thinking too. It is just a bunch of smoke and mirrors to bring the price down I think.

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As I said in my comment, there are going to be a lot of people making over a million dollars in crypto. When you look at how many bags are filling, it really is not that difficult. Consider getting a few airdrops that take off. Then couple it with what you are already involved in.

Plus in the United States, it ends up not being as much money as it is elsewhere.

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People laugh at the pithy advice to buy low and sell high, but seriously. Right now, the lower crypto goes the more you should be buying. I mean unless you seriously think this is the end of crypto or something. Not investment advice.

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Yeah, I agree with you. I have some recurring buys that I think are going to push through at just the right time! I am also considering adding some of my other holdings.

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What you say is true but there are a lot of people who could end up with massive mooning putting them into that category. As crypto expands, this is going to cover more people in the United States. Of course, being in Canada what Biden does is not relevant to your tax structure (you have your own problems with that).

However, do not believe that a million dollars is that much in crypto. Think about a few airdrops, a couple moon shots, and suddenly, if you were to take profits, you would have over a million dollars.

The numbers add up when you are looking at 20x, 50x, or 100x in things. And that is happening all over the place in crypto.

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Sorry, I am in the US or did I just not understand. Either way. The way I understand it, it is annual income of over $1m. Unless I am constantly getting huge air drops I don't think it will apply. Those gains you are talking about would be taxed based on being a long term or short term investment. The rate for that is based on your annual income. I think for the one or two off's that a lot of these people will be seeing, this proposed law doesn't apply. Again, I could be totally wrong...

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If one has gains that are sold from crypto, that is all feeding into making a million. It is not just income from a job.

Those gains you are talking about would be taxed based on being a long term or short term investment.

In this instance, the long or short term is not applicable since they are looking to moving the capital gains rate to the same as earned income. That means all investments, at will be taxed at the same rate regardless of how long held.

Most are acting like it wont affect then but with crypto it could. And it could be very expensive.

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Interesting. I guess I just need to make sure I make 40% more than what I need to accomplish my goals. 😀

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I love the dumping of the weak hands! I have snapped up more Bitcoin in their wake and am hopefully reducing my tax events for next year which is amazing! Let's hope it slides further, dipping around 40k if it can!

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Best of luck with that! I am just going to sit here and wait for the alts to start going up again!

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I think those earning millions can afford to pay a bit more tax. It's not going to make them really suffer. I read an article recently about some rich people who want to pay more tax. You can only drive one car and live in one house at any time.

I try not to feel I have to post and sometimes take a day off if I have nothing in particular. I have less to write since I haven't run for a week, but other things occur to me. I still comment a lot.

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Yeah, I think I saw an article about that as well. It seems like a good attitude to have. Kudos to them.

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There do seem to be some who are just keen to get as much money as possible stashed away whilst avoiding paying tax. I have no sympathy for them. Then you have Bill Gates who seems to be trying to do good and gets constant abuse. I don't go with a lot of the crap talked about him, but some of his business dealings could be considered shady.

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I don’t get the reaction on any level! 😆 As you say, the vast majority of people won’t be affected. But even more important... what else are those affected going to do with their money?!? Where do they put it? Are people out there really thinking, “Well if I’m going to passively make $1 million and the government is going to take half... then I’ll just pass on the $500k... it’s just not worth the effort of leaving it sit idly in my portfolio!” 🤷‍♂️

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Yeah, exactly, that has been my attitude all along. Say I make 40k and the government takes 10k. I still have 30 k I didn't have before!

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Get ready i think its going to get worse before it gets better. I predict a 20k btc by summer.

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Possibly, if a great many of the recent institutional investors collectively dump their holdings. Possible, but unlikely in my opinion.

Then again? I am not financial advisor on the cryptocurrency markets.

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I'd buy that dip.

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Many of these proposals won’t make it. These politicos can’t agree on anything let alone actual real legislation. Regardless the legacy system will need some “reorganization”. Meanwhile focus on the new..blockchain. :)

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The other food thing is Biden seems more likely to let his cabinet just do their job versus forcing through all of his crazy ideas like we saw the last four years.

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I think a year sounds about right. Those big guys need an entire year to convince the share holders to run into crypto. Its too bad the normal guys don't even want to give crypto a try. At worst, they just need to sell out near the 1 year make and book their profits.

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At this point we might be In a bear market then and it might not be so bad!

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This is not the time to sell instead time to buy. Its obvious that weak hands will sell this time and those who HODL will get the benefits later.

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Your post is reblogged and upvoted by me. It is a good post. Thank you @bozz

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I don't live in the USA anymore so the regulations that a lot of my American friends face do not apply to me but I have always been one that thought that if they wanted to tax it and did so at a REASONABLE rate (not something crazy like 40%) and then eased restrictions, that it could do the market a lot of good.

You have any thoughts on that?

BTW: I don't know anyone that is pulling in a million a year on crypto. I know a few very very rich hedge-fund managers though and I am only pretending to even know what that means.

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I have said for a long time that if I get a big win in crypto the gov is more than welcome to their 30% or whatever it is. No back alley exchanges for me. Now that I have had said win it is definitely a blow, but still better than being in jail. I think people just need to educate themselves a bit more. This law is clearly targeted at a specific group and most of us don't fall into said group.

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I'm one of the previous weak hands myself, I panicked during the dips and thought I should do damage control. I think it's a lesson we all have to learn. There were a few moments that I was saving up in crypto for a purchase and if I had a deadline, I'd make sure to cash out in time, before dropping harder. Sometimes you can't add another week or few days.

Besides that, I've learned to have diamond paws through the dips recently. And I can now totally feel bummed looking at the portfolio value at first, while later one trying to buy in some stuff if the opportunity is there with liquids. I was too late freeing up funds for the last dip, too bad as it was a massive sale :)

I also think often you can predict the FUD will cause a dip (just have to wait and see how hard it will drop) but see it as an opportunity, instead. I've come a long way to actually feel this myself lol.

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Those are some really good points and strategies you have implemented. I was lucky to pull a bit out before this recent drop. That took care of all my real world stuff and now I can just sit back and wait for the right time with the rest of my holdings. Whether it is 1 month or 1 year.

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Oh you were lucky, my plan was to do it the next day, but then I woke up, and saw a bleeding market. I knew right away it was going to be postponed for a few more days at least. It's fine though, I'm glad I can change my mindset easier compared to several months ago..

Good to see you took care of the real world stuff! Although we're getting closer to be able to say the same, we're not quite there yet. But getting closer every month now. The car purchase was a huge part for us to improve the quality of life, and will also mean more income in a few weeks when my boyfriend changes jobs. Without the car this would have been limited like it has been before.

Although I hate the drop in value after a real life need for cashing out, I also feel very blessed to be able to do so, rather than not knowing how to solve an issue before I knew crypto. It's amazing that we can, if you ask me!

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I just did a similar piece. People panic on news that has no real impact to them, but then that panic actual causes issues in the market. It then snowballs and institutions who are positions to make money will run prices down to amplify their gains.

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I read many articles on that and even though I do not make a million a year, I thought it was crazy. I feel like it won’t be long until my capital gains tax goes up as well. Yuck. Tax tax tax. Grrrr. Oh well. Your right, it does weed out the weak hands. HODL!!!

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One of the only two things you can count on I guess.... Taxes next year will definitely be interesting!

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