I have a few questions that I would appreciate if anyone could help answer.
1- Being a United States Citizen, what market places for investing and trading crypto currency would you recommend me being in and are there only certain market places I am allowed to use?
2-From research I have done, I have read different things in different places, does anyone know about how the new US tax plan that was just passed effects how crypto currency is taxed? I am want to know so I can keep all of my records up to date.
3-What are the advantages / disadvantages for each market place and do any allow you to short? For example poloniex, Coinbase, and bittrex? Is
4- Do I need to worry about leaving coins in a market place account or should I be trading and moving right into cold storage?
5- Is there anything else you think I should know? Because while I have kept up with and done a ton of research on lots of different coins I still will be a newbie when it comes to trading and investing. So all advice will be greatly appreciated.
1. Many exchanges do not allow US citizens to purchase Bitcoin, but there are some major players that do, such as Coinbase, GDAX, Coinmama, Bitstamp, Kraken and LocalBitcoins. These are all as reputable as you’ll find in the crypto industry. Check out this list for more options:
https://www.buybitcoinworldwide.com/united-states/2. I’m not familiar with a “new” tax plan that was passed related to crypto currency, but the IRS views crypto as a property (not a currency), which means that you would have to pay capital gains taxes on the value of your crypto transfers, every time you sell or exchange your crypto into fiat. Think of it as real estate when it comes to reporting your crypto sales..
3. Each of the major exchanges have their own advantages. For example, Coinbase has the best rates if you use your bank account directly to purchase crypto. But this requires allowing them to access your bank account, by way of logging into your bank’s online portal via Coinbase. As for as short trading, your options are much better on other TRADING exchanges, such as bitfinex, binance, bittrex, poloniex, etc. as they support much more altcoin options for trading. Each has their own restrictions, and most of their support teams are overwhelmed at the moment, so if you encounter any issues, you’ll unfortunately be stuck with that issue for much longer than you’ll anticipate. They also require verification, for the most part, so anonymity is out of the question as an American. It doesn’t sound like you’re worried about anonymity, though.
4. Yes. Worry about it. Google “Mt Gox” to see what’s happened in the past with millions of dollars worth of Bitcoin. There is always a risk of an exchange shutting down at any moment, regardless of how reputable they have been in the past. Cold storage is among the safest options for storing your crypto. I personally never leave anymore value in any exchanges more than I’m willing to lose in case something goes awry.
5. You’ll learn on your own, as you continue playing around and short trading. Coinmarketcap.com will become your homepage. You’ll find a lot of articles about the best way short the markets, but one thing I hope you take away from my post is this: DO NOT EVER JOIN AUTOTRADING SERVICES or buy any “bots” that auto trade. They claim to be able to read signals and use your own stop orders to guarantee a return, but these are all ponzis. They rely on new customer sales to support and payback the “promise of return”. In fact, stay away from ANY site that guarantees any form of ROI. If their services were legitimately profitable, they wouldn’t have to rely on newbies in order to make money.
Welcome to crypto, and hope you enjoy it!
