Great video discussing how crypto will change everything. This is Raoul Pal and not some crypto-extremist.

THE EXPONENTIAL AGE: CRYPTO’S FAST AND FURIOUS RISE
https://www.realvision.com/shows/expert-view-crypto/videos/the-exponential-age-cryptos-fast-and-furious-rise

I think it says its locked and only available to members but apparently if you just enter your email you get free access (and added to RVs email list!)

Hi Sandpaddict,

My spouse and I have enjoyed snowboarding near Kelowna and mountain biking throughout BC over the past 5 years and started considering a part-time retirement home in Canada until the new laws passed penalizing foreign home buyers. That ended all my effort to learn about investing laws and regulations for Canada. So you will have to look on-line or elsewhere for Canada's rules.

After watching for a long while from the sidelines and dealing with some challenges, I started by investing in both Grayscale's BTC trust and ETH trust through my regular stock broker since it does not require the typical crypto coin complications of a wallet, etc. Those trusts were designed for institutional investors lacking the rights or comfort level for direct crypto purchases. After seeing that those are financially inefficient, I looked at direct crypto purchases.

I suggest that you evaluate the 3 - 5 largest exchanges open to Canadians by reviewing on-line comments, especially negative ones, and other sources, then choose an exchange, put some money that you can afford to lose by scaling into in a few popular coins, and then watch as well as learn from the charts and other sources. Kraken has a daily newsletter, relatively biased on the bullish side. I purchased increments repeatedly over a month and am currently have net gains.

FOMO and buy-the-dips are strong temptations in crypto. I am glad I did not chase BCH recently and prices eventually came back to my 875 limit order price. I am only using candlestick patterns to make trade entries for now.

Hopefully, we can get some feedback from others about what trading approaches are successful (more wins than losses) and evaluate which we may want to employ.

By having some "skin in the game", you will likely watch more carefully and learn faster than if you just read the occasional surprising headline stories. You will also acclimate to a different environment than your current typical stock broker, especially the 24/7 plus weekends trading.

For now I am leaving all of my crypto in Kraken's account since I believe that there is a greater risk that is could lose a wallet key, etc., than someone would hack Kraken and steal my coins. At some point in the future when I get enough money in crypto, I may move some to a cold storage wallet.

Please share your experience if you move forward.

Thanks,

SMCJB 

Great video discussing how crypto will change everything. This is Raoul Pal and not some crypto-extremist. THE EXPONENTIAL AGE: CRYPTO’S FAST AND FURIOUS RISE https://www.realvision.com/shows/expert-view-crypto/videos/the-exponential-age-cryptos-fast-and-furious-rise I think it says its locked and only available to members but apparently if you just enter your email you get free access (and added to RVs email list!)

Hi SMCJB,

I believe that I remember Rao stating that he liquidated all of his other assets and went 100% crypto. So he may have an usually strong bias for crypto.

mscholder 

Hi SMCJB, I believe that I remember Rao stating that he liquidated all of his other assets and went 100% crypto. So he may have an usually strong bias for crypto.

Irresponsibly long! Even have a T-shirt.
His primary trades are Bitcoin, then Etherum and then an unrevealed portfolio of 10 other currencies.
His only major non-crypto trade is currently European Emissions Credits.

mscholder 

Hi Sandpaddict, My spouse and I have enjoyed snowboarding near Kelowna and mountain biking throughout BC over the past 5 years and started considering a part-time retirement home in Canada until the new laws passed penalizing foreign home buyers. That ended all my effort to learn about investing laws and regulations for Canada. So you will have to look on-line or elsewhere for Canada's rules. After watching for a long while from the sidelines and dealing with some challenges, I started by investing in both Grayscale's BTC trust and ETH trust through my regular stock broker since it does not require the typical crypto coin complications of a wallet, etc. Those trusts were designed for institutional investors lacking the rights or comfort level for direct crypto purchases. After seeing that those are financially inefficient, I looked at direct crypto purchases. I suggest that you evaluate the 3 - 5 largest exchanges open to Canadians by reviewing on-line comments, especially negative ones, and other sources, then choose an exchange, put some money that you can afford to lose by scaling into in a few popular coins, and then watch as well as learn from the charts and other sources. Kraken has a daily newsletter, relatively biased on the bullish side. I purchased increments repeatedly over a month and am currently have net gains. FOMO and buy-the-dips are strong temptations in crypto. I am glad I did not chase BCH recently and prices eventually came back to my 875 limit order price. I am only using candlestick patterns to make trade entries for now. Hopefully, we can get some feedback from others about what trading approaches are successful (more wins than losses) and evaluate which we may want to employ. By having some "skin in the game", you will likely watch more carefully and learn faster than if you just read the occasional surprising headline stories. You will also acclimate to a different environment than your current typical stock broker, especially the 24/7 plus weekends trading. For now I am leaving all of my crypto in Kraken's account since I believe that there is a greater risk that is could lose a wallet key, etc., than someone would hack Kraken and steal my coins. At some point in the future when I get enough money in crypto, I may move some to a cold storage wallet. Please share your experience if you move forward. Thanks,

Thank you for your response mscholder.

Yes I live in BC and it's beautiful. And oh ya super job they did with the foreign home buyers tax. Housing markets higher by a wide margin now and alot of people are shut of the owners market. Especially first time buyers.

As for trading cryptos my main concerns are... 1) the new regulations Canada has put out for crypto exchanges that might affect how they operate here.

And 2) I only trade futures because you can go short as easily as you can go long, there is no slippage on a lot of the most liquid instruments, and it's super easy when it comes to taxes.

If any of those are a no then I'll probably pass on crypto.

Thanks for your time.

Sent using the NexusFi mobile app

Sandpaddict 

Thank you for your response mscholder. Yes I live in BC and it's beautiful. And oh ya super job they did with the foreign home buyers tax. Housing markets higher by a wide margin now and alot of people are shut of the owners market. Especially first time buyers. As for trading cryptos my main concerns are... 1) the new regulations Canada has put out for crypto exchanges that might affect how they operate here. And 2) I only trade futures because you can go short as easily as you can go long, there is no slippage on a lot of the most liquid instruments, and it's super easy when it comes to taxes. If any of those are a no then I'll probably pass on crypto. Thanks for your time. Sent using the NexusFi mobile app

Government regulation is a crypto risk world wide and there are headlines daily of threaten or actual new regulations. To date the US SEC has prohibited Crypto ETFs but Canada recently approved one. I have no idea how Canada regulates cryptocurrency.

There is an existing BTC future contract (=5 BTCs). Recently a ETH futures contract (=50 Ether) was launched on the CME but Think-or-Swim has not yet or only recently approved trading ETH for its customers. Both those futures contracts should allow long or short positions.

Apparently, the major crypto exchanges also support long and short positions directly in actual cryptocurrency.

Importantly, crypto exchanges are each separate entities and do not access a central market like the CME where all US futures trades occur via authorized brokerage firms. My understanding is that the counterparties for cryptocurrency transactions are only customers of the same exchange and not from a different exchange. This obviously impacts pricing and liquidity.

Regarding taxes, my impression is that Kraken will only identify the trades and everything else is my responsibility in doing my taxes. Here's what they say,

"Countries differ on how cryptocurrency transactions, trades, and holdings are taxed (if at all) and how they view cryptocurrencies in general (e.g. as money, as property, as a commodity, etc). Please consult a local accountant, tax lawyer, and/or government official for advice.

It is the client's responsibility to determine what, if any, taxes apply to the trades completed via our services, and to report and remit the correct tax to the appropriate tax authority.

If you require a record of your balance or trade history, click here for instructions on how to export your data to a CSV-file."

Again, I have virtually no knowledge of Canadian tax law. It is possible that the "datadump" without taxation perspective might be enough for you to pass on direct cryptocurrency trading.

mscholder 

Government regulation is a crypto risk world wide and there are headlines daily of threaten or actual new regulations. To date the US SEC has prohibited Crypto ETFs but Canada recently approved one. I have no idea how Canada regulates cryptocurrency. There is an existing BTC future contract (=5 BTCs). Recently a ETH futures contract (=50 Ether) was launched on the CME but Think-or-Swim has not yet or only recently approved trading ETH for its customers. Both those futures contracts should allow long or short positions. Apparently, the major crypto exchanges also support long and short positions directly in actual cryptocurrency. Importantly, crypto exchanges are each separate entities and do not access a central market like the CME where all US futures trades occur via authorized brokerage firms. My understanding is that the counterparties for cryptocurrency transactions are only customers of the same exchange and not from a different exchange. This obviously impacts pricing and liquidity. Regarding taxes, my impression is that Kraken will only identify the trades and everything else is my responsibility in doing my taxes. Here's what they say, "Countries differ on how cryptocurrency transactions, trades, and holdings are taxed (if at all) and how they view cryptocurrencies in general (e.g. as money, as property, as a commodity, etc). Please consult a local accountant, tax lawyer, and/or government official for advice. It is the client's responsibility to determine what, if any, taxes apply to the trades completed via our services, and to report and remit the correct tax to the appropriate tax authority. If you require a record of your balance or trade history, click here for instructions on how to export your data to a CSV-file." Again, I have virtually no knowledge of Canadian tax law. It is possible that the "datadump" without taxation perspective might be enough for you to pass on direct cryptocurrency trading.

Thank you. That was very helpful.

Sent using the NexusFi mobile app

mscholder 

There is an existing BTC future contract (=5 BTCs). Recently a ETH futures contract (=50 Ether) was launched on the CME but Think-or-Swim has not yet or only recently approved trading ETH for its customers. Both those futures contracts should allow long or short positions.

ICE also has a BTC future (=1 BTCs) and CME launch a Micro BTC (=0.1 BTCs) in May.

mscholder 

Apparently, the major crypto exchanges also support long and short positions directly in actual cryptocurrency.

I'm not an expert on this but this is not my understanding. Coinbase the largest US exchange does not allow short positions. I believe Derebit does (not available to US residents) but on Derebit you are trading derivatives (swaps and futures) and not the actual crypto currency.

mscholder 

Importantly, crypto exchanges are each separate entities and do not access a central market like the CME where all US futures trades occur via authorized brokerage firms. My understanding is that the counterparties for cryptocurrency transactions are only customers of the same exchange and not from a different exchange. This obviously impacts pricing and liquidity.

This is a good point in several ways. 1) There is no centralized clearing. You are taking the credit risk of the exchange. If the exchange has a problem (hack, theft etc) you are very much at risk. While there is some risk in regulated futures it is significantly less. 2) Some of these exchanges don't use a central order book and can and will trade against your orders, much like some FX shops.

Tax rules are complicated and do vary by jurisdiction. In the US if you trade a Bitcoin Future, it is taxed as a futures contract. If you trade Bitcoin itself though it is taxed as a cryptocurrency. I have no idea how a perpetual swap would be taxed though. Your not trading Bitcoin itself, but a derivative of it!

SMCJB 

ICE also has a BTC future (=1 BTCs) and CME launch a Micro BTC (=0.1 BTCs) in May. I'm not an expert on this but this is not my understanding. Coinbase the largest US exchange does not allow short positions. I believe Derebit does (not available to US residents) but on Derebit you are trading derivatives (swaps and futures) and not the actual crypto currency. This is a good point in several ways. 1) There is no centralized clearing. You are taking the credit risk of the exchange. If the exchange has a problem (hack, theft etc) you are very much at risk. While there is some risk in regulated futures it is significantly less. 2) Some of these exchanges don't use a central order book and can and will trade against your orders, much like some FX shops. Tax rules are complicated and do vary by jurisdiction. In the US if you trade a Bitcoin Future, it is taxed as a futures contract. If you trade Bitcoin itself though it is taxed as a cryptocurrency. I have no idea how a perpetual swap would be taxed though. Your not trading Bitcoin itself, but a derivative of it!

Thank you very much. I have decided to forgo spot crypto trading for the same reasons and more than I stopped trading FX.

- Deregulated exchanges... although this would not stop me from investing with a coinbase or a binance it would give me pause on the smaller exchanges and it just something to keep in mind.

- I cannot find a straight answer on the simple question if shorting is possible like futures or if it a pain like stocks.

- tax implications are Im assuming going to be taxed at the capital gains or the equally unsatisfying, as a property holding tax.

- as I already trade futures EXCLUSIVELY and for the reasons stated above I can trade Bitcoin that way with all the freedom of the futures advantages.

- and although prohibitively expensive margins the micros given liquidity will be ideal for me.

Again... thank you very much.

Sent using the NexusFi mobile app

Since lows early in the year ETH has doubled relative to BTC!