Personal blockchain capital
The technology is still early, but it has enormous potential—at the scale of the Internet. Investing now is both potentially lucrative and appropriate in the context of a diversified portfolio.
For more thoughts about why to invest in blockchain and our approach to this asset class, follow our blog. We do our homework, rely on solid investing fundamentals, perform thorough due diligence, and consult experts. Our investment team diligently researches opportunities and also receives leads from our global community of supporters and investment professionals.
My alumni fund was a great way to get a more diversified portfolio, and I enjoy being part of a group of classmates investing together.
Both of us were helped by fellow alums at many key points of our lives. And frankly, we just need more people out there creating solutions to societies key problems. I feel an obligation to do my part. What Is the Blockchain Fund? Intelligently Mitigated Risk We do our homework, rely on solid investing fundamentals, perform thorough due diligence, and consult experts We also diversify assets and use dollar-cost average buying and selling.
Examples include when you sell, trade or exchange your cryptocurrency, convert it to a fiat currency like Australian dollars, or use it to obtain goods or services.
If you make a capital gain on the disposal of a cryptocurrency, some or all of the gain may be taxed. Certain capital gains or losses that arise from the disposal of cryptocurrency that is a personal use asset may be disregarded. If the disposal is part of a business you carry on, the profits you make on disposal will be assessable as ordinary income and not as a capital gain.
If you acquire cryptocurrency as an investment, you may have to pay tax on any capital gain you make on disposal of the cryptocurrency. You will make a capital gain if the capital proceeds from the disposal of the cryptocurrency are more than its cost base.
If you acquire cryptocurrency as an investment, you will not be entitled to the personal use asset exemption. However, if you held the cryptocurrency for 12 months or more, you may be entitled to the CGT discount.
If the capital proceeds from the disposal of the cryptocurrency are less than its cost base, you will make a capital loss.
A capital loss can be used to reduce capital gains made in the same year or a later year. Net capital losses cannot be offset against other income. Terry has been a long term investor in shares and has a range of holdings in various public companies in a balanced portfolio of high and low risk investments.
Some of his holdings are income producing and some not, and he adjusts his portfolio frequently at the advice of his adviser. Recently, Terry's adviser told him that he should invest in cryptocurrency. On that advice Terry purchased a range of cryptocurrency which he has added to his portfolio. Terry doesn't know much about cryptocurrency but, as with all of his investments, he adjusts his portfolio from time to time in accordance with appropriate investment weightings.
If Terry sells some of his cryptocurrency the proceeds would be subject to CGT. He has acquired and held his cryptocurrency as an investment. Some capital gains or losses that arise from the disposal of cryptocurrency that is a personal use asset may be disregarded.
Cryptocurrency may be a personal use asset if it is acquired and kept or used mainly to purchase items for personal use or consumption. However, all capital losses you make on personal use assets are disregarded. Michael wants to attend a concert. The concert provider offers discounted ticket prices for payments made in cryptocurrency.
Having regard to the circumstances in which Michael acquired and used the cryptocurrency, the cryptocurrency is a personal use asset. Peter has been regularly acquiring cryptocurrency for over six months with the intention of selling at a favourable exchange rate.
He has decided to buy some goods and services directly with some of his cryptocurrency. Because Peter acquired the cryptocurrency as an investment, the cryptocurrency is not a personal use asset.
In the context of carrying on a business, funds or property you receive through the acquisition and disposal of cryptocurrency are likely to be ordinary assessable income where you:. If these gains or profits are ordinary income, you may be able to claim deductions, and any capital gains you make are reduced to the extent that they are also ordinary income. Proceeds from the sale of cryptocurrency held as trading stock in a business are ordinary income. Examples of businesses that involve cryptocurrency include:.
Not all people acquiring and disposing of cryptocurrency will be carrying on businesses. To carry on business, you need to:. Whether you are carrying on a business and when the business commences are important pieces of information.
Money received or property received prior to a business being carried on is not generally assessable income. Likewise, you cannot claim deductions incurred prior to the business being carried on. If you receive cryptocurrency for goods or services you provide as part of your business, you need to include the value of the cryptocurrency in Australian dollars as part of your ordinary income.
This is the same process as receiving any other non-cash consideration under a barter transaction. One way of determining the value in Australian dollars is the fair market value which can be obtained from a reputable cryptocurrency exchange.
Where you exchange one cryptocurrency for another cryptocurrency, you dispose of one CGT asset and acquire another CGT asset. Where you receive property instead of cash as part of a transaction, you are usually taken to have the market value in Australian dollars of the property received. We are currently consulting with industry and other interested stakeholders to seek feedback on practical compliance issues arising from cryptocurrency to cryptocurrency transactions.