With the recent cryptocurrency frenzy engulfing the world, increasing amounts of statistical data are being published, shedding light on market behaviours and attitudes. Over the weekend, various reports were released that indicated things such as millennials’ propensity toward crypto investing, confusion among investors re tax disclosure, and a concerning rate of those funding Bitcoin and altcoin investments with debt.
Yesterday, Forbes made reference to a Harris Poll conducted in November for Blockchain Capital that concluded 32% of millennial Americans intend to buy Bitcoin within the next five years. Further revelations showed how, of the 2,000-plus polled millennials, 30% expressed that they would rather own $1,000 worth of Bitcoin than the equivalent in government bonds or stocks.
In terms of familiarity re Bitcoin – the world’s most notable cryptocurrency – 42 percent of this same 18-34 year-old age bracket reported hearing about it. This compares to a mere 15 percent of those aged 65 and over who were aware of Bitcoin.
Regarding the understanding of one’s crypto tax obligations, another compiled set of statistics have revealed that the public either simply do not care for disclosing the financial details of their cryptocurrency trades, or (more likely) are unmotivated to learn how to report their crypto trades which – for many – would involve acknowledging a hefty capital gain.
Results out of a November LendEDU survey revealed that a concerning 36% of the 564 polled Bitcoin investors have no intention of realising capital gains or losses on cryptocurrency trades in their 2017 tax return. These answers came despite knowing that the failure to report such figures represents an act of tax fraud.
Yet another set of data was released over the weekend; this time looking at the source of funding behind people’s Bitcoin investments. Again from LendEDU, the report detailed that of the 672 surveyed, over 18% funded their Bitcoin investment with a credit card.
Whilst this was not inherently worrying, what was “the most pressing concern” from the poll – according to LendEDU – was the fact that “22.13 percent of Bitcoin investors did not pay off their credit card balance after purchasing Bitcoin.” Such negligent financial behaviours was a big contributor to the GFC of 2007/08.