Accountants help clients weather crypto winter
While the value of many cryptoassets has plunged over the past month, the tax and accounting issues haven’t gone away, leading to a subtle shift in the type of enquiry fielded by crypto accountants.
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I'm sure there were just as many accountants and financial experts similarly advising tulip bulb investors back in the day.
As for this bit:
"“Many clients are in the space for the meaning, not the money,..."
That tells you everything you need to know.
ah the old tulip analogy ...
https://www.investmentnews.com/yes-the-internet-craze-is-like-the-dutch-...
Theres no denying Crypto in a bubble, just like housing and the traditional markets are in right now… most things with money have a cycle..
Bitcoin bubbled in 2018.. 2019… twice in 2021.
It good seeing such firms as Accounts & Legal taking the opportunity and seeing crypto as clients and opportunity and not just tulips.
The tulip didn’t die, and the global tulip market is c8 billion USD
Interestingly, the Dutch tulip crash only involved about 350 wealthy merchants and had pretty much zero effect on the country's economy. It was a good story Mr Mackay told about it though!
I'd have gone with 1840s railway mania :-)
Tulips are a much better analogy in this case, as like crypto (and unlike railways) they are fundamentally worthless. Just ask Bill Gates - who should know a thing or two about such things.
Bill Gates 2004: "E-mail spam will be a thing of the past in two years' time."
He also said
" digital money is a good thing" and the gates Foundation is active in work around development of pro-poor, digital payment systems.
Lots of smart people have said wrong things and dumb people get things right at times.
Zuckerbeg supports web3
Musk supports web3
as does Mark Cuban, Kevin Oleary and many others in the mega rich successfull sphere...
To dismiss a trillion dollar industry as "fundamentally worthless" is sad to hear.
Its not just coins and ape pictures, its 300 million users globally, 10,000+ employees and growing for a wide range of use cases.
Our larger clients pay substantial bills to thier accountants for the advice and work they do, we have many clients who are employees who receive crypto just due to working in the industry and need an accountant to support them, the feedback we get the most is asking for reccomendations, and finding an accountant who understand these things.
I like articles like this one as they allow us to add accountants to the list of advisors we reccomend and were getting really good UK coverage this year for local support to our clients.
But that's not a great counter-argument is it (i.e. clever, knowledgeable people are sometimes wrong - no shi t), when there is a very good historical analogy to explain this crypto madness based on no fundamental value i.e. tulipmania.
At least one or two cryptos have gone to zero this year for the very reason their lack of fundamental value was exposed and that was no surprise to me or BG, but may be surprising to you.
No argument here pal,
Im here to keep upto date on whats occuring in the accountants space with web 3 and crypto.
Theres bubbles everywhere, theres dodgy business everywhere , theres bad actors everywhere...
Because Evergrande is failing the entire property segment isnt tulipmania
Because Enron failed the energy industry isnt dodgy (debatable)
Because Carrillion failled construction isnt doomed
...etc etc
Web3 is here to stay and Is a great opportunity for accountants to expand, some will dismiss it as a fad and have zero interest.
It is young, it is a bubble, it does have up and down cycles, lots will go bust just like the dotcom bubble (also see the energy bubble, did you know 31 energy companies have gone bust in the UK since 2021?... this one gets a lot less press attention)
The number of potential clients interacting with web3 and crypto is rising, we just ask you accept it or ignore it , but not to dismiss it and call it a tulip.
I believe it's right to call crypto out as tulipmania style scam when it so clearly is one. The other bubbles you mention are not at all comparable to tulipmania.
The Cryptocurrency space is fundamentally a solution looking for a problem. There is nothing you can do with cryptocurrency that you cannot do with an actual currency (except hide ownership, but for what reason)? Unlike blockchain, which has huge advantages for securing data.
"“Many clients are in the space for the meaning, not the money" shows that it is a bit like "non-fungible tokens" for a piece of art - they have no intrinsic value.
if it helps, very high level examples of just a couple of common use cases we see in our groups.... these are the ones you don’t see in headlines ....
"There is nothing you can do with cryptocurrency that you cannot do with an actual currency"
Remittance: Using a Money Transfer Operator (MTO) comes with high costs, we’ve seen massive shifts in the UK from members now using crypto to send money over seas to avoid huge costs these MTO apply (eg: western digital) . And it can all be done in a matter of seconds from your sofa... buy, move, sell.
Inflation: Foreign members and with family still in countries with hyper inflation (Venezuela 1198%, Argentina 51%, Turkey 36%....) large numbers now placing pay checks into crypto as by month end their pay checks value has declined 30%
3rd world: Every single project we have been involved in globally has a signifiacnt workforce with 3rd world country members who... have little to no access to banking infastructure.. high inflation, corruption. With just access to a computor they find work and pay on a massive scale in web3.
"non-fungible tokens" for a piece of art (yes very silly... but this is helping smart contracts get the development and innovation it needs)..... combine an NFT with your quote "blockchain, which has huge advantages for securing data"... you have the most secure way to prove ownership of data ever seen, and its all viewable and verifiable on the blockchain via a smart contract (or NFT)
"Except hide ownership"
All UK exchanges have KYC and report to HMRC, there is crypto designed around anonymity (Monero) but hiding ownership is not synonymous with an open , secure , readable block chain. There are better ways to hide money.
All of your first 3 examples can be achieved without crypto ... just try Revolut (other cards are available) ... and without the danger of wholly unpredictable crypto fluctuation.
If I was one of those people in Turkey (or rather Türkiye) who purchased crypto earlier this year with my rapidly eroding TL ... then I'd be a tad upset to see the value reducing faster even than if I'd left in TL!
Can be done without crypto... you can write that, but its wrong and millions disagree, were not talking about users spending thousands just to hold it and hope to get rich.
As per fluctuation, these international transfer are not being held for months. Money is moving in minutes and transferred to USD or other stable assets, quickly and with very low fees.
Revolut
"We are currently only supporting legal residents of the European Economic Area (EEA), Australia, Singapore, Switzerland, Japan, the United Kingdom and the United States. The EEA includes:" (they are making way in south America now)
Fluctuations are not impacting any of the above use cases.
Most objectors see crypto as expensive ape pictures and rich get quick rich schemes. These things grab headlines, 10% of the population of Nigeria are not buying Ape NFTs, but that doesn’t make a funny headline does it.
The only thing I can say is that I’ve been in the industry for a decade,
Either 300 million users are all being scammed and conned over the last 12 years or there’s something here, widen your horizon and you will find something.
Revisit this thread in 3 years I am confident as an accountant you will be providing crypto advice, working with it in people self assessment and good chance accepting a crypto currency for services.
Given that the full-blown experiment with Bitcoin as legal tender (in El Salvador) is rapidly failing ... as of 3 weeks ago "only 20 percent of firms in the country accept Bitcoin, and only 5 percent of sales take place in the cryptocurrency" ... I'm happy continuing to ignore the whole topic.
If you enjoy gambling then you may see the attraction, but I don't ... and can't!
.Yes, the authoritarian military dictatorship…
- rated 34th in global corruption
- which has 55% internet penetration
- 29% has a bank account
- 4% has a mobile money account
….adopts bitcoin and there are issues, surprised?
Possible real reasons this regime dived into bitcoin?
Corruption
Remittance: which make up nearly a quarter (22%) of El Salvador’s GDP
Sanctions: Salvadoran banks need to be able to transact with American banks, which are subject to the US Treasury.
Not many people agree this was ever a good idea, IMO its just another avenue of corruption for Bukele, there would have been much better choices than BTC for this.
When the dust settles the rich will be richer in El Salvador, this was never about the average person on the street.
Crytpto isn’t ‘one bad apple spoils the bunch’ thankfully.
“ I'm happy continuing to ignore the whole topic” , well here we are debating it with strangers on the internet.
A pleasure debating with you.