Ask HN: If a Bitcoin crash was to occur, what would it entail? - bhouston
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SirLJ
"Only when the tide goes out do you discover who's been swimming naked" \-
Warren Buffett

Also don't forget our IRS friends, every time you sell a crypto coin to cash
out or buy another, you owe Uncle Sam a big junk of your profits - for a
holdings less than a year, more likely equal to your income tax bracket and if
you think you are anonymous, think again and consider how likely your exchange
is to turn all their records to the US government...

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thiagooffm
this is applied to the 1 year period

from my understanding, if bitcoin went down 50% based on the value you had
invested in the beginning of the year, you pay nothing of taxes, because you
had no profit. and you only pay taxes if you sell it.

i frequently trade in the stock market and that's how it works there though.

~~~
SirLJ
Exactly, if you held it for one year or less, it is a considered a short-term
gain and is taxed as ordinary income. Depending on your tax bracket for 2017,
that could range from a tax rate of 10 percent to 39.6 percent.

[https://www.cnbc.com/2017/11/30/bitcoin-investors-beware-
the...](https://www.cnbc.com/2017/11/30/bitcoin-investors-beware-the-irs-
wants-its-cut-and-you-may-not-know-it.html)

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debacle
The difference in Bitcoin is that it is relatively insulated from other
securities. A bitcoin crash would have little to no impact on anything but
other coins, and even then the impact would likely be minimal for more stable
coins.

~~~
dabockster
And, if Bitcoin did crash for good, another coin would probably take its
place.

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sharemywin
it crashes all the time.

[https://www.bloomberg.com/news/articles/2017-11-16/bitcoin-h...](https://www.bloomberg.com/news/articles/2017-11-16/bitcoin-
hits-record-as-monday-s-29-plunge-fades-to-memory)

~~~
muzani
it crashes all the time

[https://99bitcoins.com/bitcoinobituaries/](https://99bitcoins.com/bitcoinobituaries/)

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paulpauper
same as any other crash: a lot of people would lose unrealized gains and some
would have unrealized losses. the use of leverage could exacerbate the fall

