Most cryptocurrency transactions will involve the exchange of one cryptocurrency for another cryptocurrency (‘crypto-to-crypto’). Put another way, the majority of transactions that are undertaken will not involve a conversion to a fiat currency, such as US or Australian dollars.
The emergence of cryptocurrencies into the mainstream discussion of financial investment has seen an increasing number of our clients considering whether cryptocurrencies, such as Bitcoin, may be acquired by their self-managed super fund (SMSF).
As cryptocurrencies gather momentum among investors, it is no surprise that both the public and the Australian Taxation Office are turning their thoughts towards those who invest in this digital asset.
It should also come as no surprise that tax is an afterthought for many seeking to jump on board, particularly given the sharp rise in popularity and value of cryptocurrencies.