BTCFX is doing its best to survive!? Don't even think about probing sells at a reasonable price—absolutely not!
Hello everyone, with unrealized gains! Bitcoin’s rise is starting to outrun us@xi10jun1, it seems.
Bitcoin has once again easily surpassed last week’s high of 1 BTC = 1.4 million yen. On a FX basis, 1 BTC has finally reached 2.5 million yen.
It’s getting harder to keep up with the speed, and holding positions is becoming unsettling….
Note: This column is designed so half of it can be read for free, a conscience-filled setup. Of course, if you read into the paid portion (updated weekly, 400 yen per month, so about 80–100 yen per column), it would be very encouraging, and I’d be happy if you subscribed as a tip!
This week’s results (December 1, 2017 to December 7, 2017)
First, as usual, the results. We’ll announce the changes first.
- Last week’s assets (through 2017-11-30): 58,562 yen
- This week’s assets (through 2017-12-07): 59,924 yen
- Change: +1,362 yen
I managed to end in the plus, but price increases are happening so fast. While I’m sleeping, several ten-thousands of yen rise, and when I’m awake I rarely meet the moment to take a position.
As it rose again, the margin required for BTCFX also increased. Even with 0.1 BTC at 15x leverage, more than 10,000 yen in margin is now required.
In such a scenario, the temptation to place an informal sell order comes up: “Maybe I should try selling soon.”
So this time I’ll write about the dangers of informal selling in BTCFX.
Informal selling in BTCFX is absolutely not recommended!
If you’re asking, “Do you want to die that quickly?” that’s how dangerous informal selling in BTCFX is.
Looking at the whole market, cryptocurrencies are in an outright uptrend. Not just Bitcoin, even Monacoin is rising.
With speculative money flowing into all cryptocurrencies, futures are about to start for Bitcoin, and purchases from overseas emerging markets are also increasing.
Trying to make big profits with informal selling in such a situation is like courting death. Moreover, spreads have widened, price moves are in the thousands of yen, and since exchange servers are still unstable, unless you have a solid stop-loss discipline, you’ll be wiped out in no time.
And recently I’ve noticed that among market participants, those who are mediocre or just average tend to lose more money.
It’s not exactly fair to call them bad or good, but they understand the volatility of crypto assets, so they tend to hold physical coins (spot holdings).
Conversely, those in between—people like me who trade with short-term discretion—tend to survive the crash by trading more, but the more you trade, the more you face danger. And since some of you may be new to leverage trading like BTCFX, there may be more fatalities to come.
If you simply cannot stop informal selling…
If you must engage in informal selling, you should shrink your position to the smallest size. On bitFlyer’s Lightning FX, for example, trade with 0.01 BTC.
Even then, informal selling is not recommended.
Because it’s addictive.
And as you get used to it, you tend to increase your position size, and those with substantial funds may ruin themselves.
“Prices have risen enough, so maybe I should sell here.”
Whenever I see such tweets on Twitter, I think, “Ah, this person might someday pass away.”
Free summary: Price-based trading is the most dangerous!
As I mentioned in last week’s column, once prices surpass 1,000,000 yen, reports of exit losses and serious damage in BTCFX have been increasing.
It’s simple: people sell simply because they feel it’s a good value, and end up taking huge losses or exiting the market.
If you’re selling, base it on reasons far stronger than mere price, and follow strict rules. Otherwise, you’ll end up broke.
So this paid column discusses future prospects.
End-of-article Corner 1: Latest tax information! Updated December 8, 2017!
The National Tax Agency’s site has updated the latest legal view on Bitcoin.
Here it is →No.1524 Taxation related to profits from using Bitcoin | Income Tax | National Tax Agency
According to this, profits gained from using Bitcoin are treated as “miscellaneous income.”
Therefore, profits earned from margin trading like mine are generally miscellaneous income. As noted in previous end-of-article sections, offsetting losses doesn’t seem possible. It’s a bit disappointing…
Also, according to NewsPicks comments by BitFlyer CEO Yuzo Kano (No.1524 Taxation related to profits from using Bitcoin - NewsPicks), if you buy Bitcoin for 100,000 yen and use it to buy something worth 500,000 yen, the 400,000-yen difference is recognized as profit.
When you use Bitcoin to purchase goods or services, if the price of Bitcoin at the time of payment is higher than at the time of purchase, that profit is recognized. So the same applies to shopping with Bitcoin on FANCY, so be careful.
And on December 1, 2017, the National Tax Agency published documents on how to calculate income.
Here it is →Income calculation methods for virtual currencies (pdf) | National Tax Agency
Note that laws and tax interpretations continue to change, so how to file taxes may change. Before filing, please check with your nearest tax office or a tax professional.
Ultimately, BTCFX profits remain miscellaneous income. I wish for tax treatment to move to separate taxation with 20% tax as soon as possible…
End-of-article Corner 2: Try shopping with Bitcoin!
Actually, the overseas e-commerce site “FANCY” allows you to purchase goods using Bitcoin! It’s a bit expensive to ship, but there are stylish items you won’t see in Japan.
I’ve summarized how to use FANCY on this blog, so please refer to it.
- →Guide to creating an account, registering, setting up, and purchasing on FANCY | Investor Jun
- →How to purchase items on FANCY with Bitcoin (Bitcoin payments) | Investor Jun
Note: The free content ends here. The remainder is detailed analysis and future prospects, so this is paid. If you’d like to read more, your support as a tip or subscription is greatly appreciated. Thank you for your continued support!
