Document Type
Article
Publication Date
6-2024
Abstract
The latest rise in the value of bitcoin has rekindled the debate on whether cryptocurrencies perform a useful function. For example, a recent article in the Financial Times argued: Have we learnt the lessons from the disastrous 2022 crash in digital assets? To judge from recent action in the crypto market, the answer appears to be no. Since hitting bottom after FTX collapsed into bankruptcy with a $9bn-ish hole in its balance sheet in November 2022, crypto market values have roughly tripled. Bitcoin’s price rose above $70,000 this week to touch record highs. A new wave of enthusiasm is growing, with institutions such as BlackRock and Invesco moving into the market. . . . Crypto still doesn’t play a meaningful role in the economy. Its value has always been underpinned by the belief that it is the future of finance. But price rises have run far ahead of any proof of genuinely practical applications gaining real traction. This list of crypto’s faults is not exhaustive. Its principal real-world application to date has been making life easier for criminals. . . . I wouldn’t say that crypto definitely has no future. Journalists are, as a rule, hysterically bad at recognising key innovations when they come along. I have met plenty of well-motivated people who are smarter than me and still think crypto is worth devoting their lives to. There may well be good ideas somewhere out in the cryptosphere that will someday emerge and change the world. But against crypto’s record of destroying wealth, breeding fraud and screwing over regular people, the burden has never been higher on crypto’s promoters to prove that it can actually start doing some good.
Recommended Citation
Avi-Yonah, Reuven S. "Now You Have It, Now You Don’t: Taxing Crypto, Part 1." Tax Notes International 114, no. 10 (2024): 1491-1494.
Comments
Reprinted with the permission of Tax Analysts.