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I think the biggest pitfall in your plan is thinking that prices would respond by falling, let alone by 95%. There’s a long history of countries imposing capit
by dcolkitt 5y ago
I think the biggest pitfall in your plan is thinking that prices would respond by falling, let alone by 95%.
There’s a long history of countries imposing capital controls. And it’s rarely favorable to the home country’s exchange rate. What you are proposing is basically just capital controls towards the crypto economy.
Yes it will make it harder for new buyers to bid up the price of Bitcoin. But it almost certainly will induce current holders to hoard any Bitcoin they own, thus reducing supply and putting upward pressure on the price. Without a liquid market, miners are likely to hoard their rewards, creating even more Bitcoin scarcity.
It also may create panic buying before the law comes in effect, or by people in foreign jurisdiction fearing the export of the policy.
- tsss 5y agoThere is no crypto economy. It is just one giant pyramid scheme.
- logicalmonster 5y agoWhat's a pyramid scheme? How do you define one? What attributes does a pyramid scheme have? One could easily ask what's a currency that's backed by nothing, is inflated to oblivion continuously robbing marginalized peoples' life savings, is often used for illegal drug/weapons/sex-trafficking/and worse crimes, is involved in a good percentage of the world's pollution, and that may soon be worth very little?
- randerson 5y agoMaybe a better strategy is to discourage crypto through fiscal policy: Imagine 90% capital gains tax on crypto profits, no credits for capital losses on crypto, 10% crypto wealth tax. Put those taxes to use fighting climate change.
- oceanplexian 5y agoAt 90% taxation why wouldn’t wealthy crypto holders just leave the tax jurisdiction? Like, it’s not a bunch of gold bricks or a briefcase full of paper money...It’s not controlled by a bank who can deny your transfer. Anyone can take all of their crypto anywhere on Earth, and can do so instantaneously and virtually anywhere with an Internet connection.
- shard 5y agoIf it was the US tax jurisdiction that someone is trying to leave, then that person would need to give up their US citizenship, not create any suspicion that they are leaving due to tax reasons, and also pay taxes as if they have sold off everything they own.
- pyuser583 5y agoIt’s a crime?
- livre 5y agoArgentina has implemented many of these "solutions" trying to keep the dollar under control. The result is prices keep going up, local currency keeps going down and there's an entire parallel market to avoid the taxes. I expect the same to happen to Bitcoin if that is implemented.
- asdff 5y agoIt can also just as likely create panic selling as speculators look to shed an asset that's dead in the water. Remember when Robinhood banned GME shares from being purchased, and the share price cratered as speculators tried to rinse their hands of the asset?
- selfhoster11 5y agoLuckily, US economy is not the only one out there. Europe and China will be happy to eat their lunch.