Unrealized capital gains 101,
You bought 1 bitcoin in Sept 2024 for $56k.
By the end of the year, it's valued at $100k, but you didn’t sell, leaving you with an unrealized gain of $44k.
Under a proposed tax plan,
you owe $11k in taxes (25% of $44k).
But you didn’t sell, so you don’t have the cash.
You pay the taxes out of your savings.
You continue to hold until August 2024, and Bitcoin drops to $30k.
You LOST $26k on the bitcoin,
PLUS you paid taxes on the $44k of “gains” you never actually realized, since they disappeared.
Initially, the tax is aimed at $100M+ portfolios, but it sets a precedent.
Eventually, it trickles down to everyone.
Now, every bitcoiner is at risk of paying taxes on assets they haven’t sold.
People stop buying Bitcoin.
Adoption "slows"
