Witnessing the dramatic surging in value of the cryptos ringed a bell to lawmakers about how uncontrollable and unpredictable of this market. Accordingly, there were a lot of policies issued against Bitcoin and other cryptos. And as 2022 is looming, further regulation is likely to come.
Better safe than sorry, here are things to equip for upcoming laws:
4 Ways to Get Ready With Crypto Regulations
1. Prioritizing Good Record Keeping
When a new year comes, cryptocurrency investors have to report their last year’s taxable transactions involving Bitcoin, Ether, Dogecoin, and other digital coins to the federal government. The Internal Revenue Service (IRS) requires investors to keep records “sufficient to establish the positions taken on tax returns”.
Prepare for that situation, you should calculate your profits or losses throughout the year. It’s maybe a bit difficult if you have multiple wallets and use different exchanges, so, keep in mind to sort everything out before that. It’s best to save your cryptocurrency transaction history for at least three years and give priority to keeping good transactions.
2. Using Software Tool to Track Transactions, Calculates Profit and Stores Proof
Using reputable cryptocurrency and portfolio management tools is a common way for investors to build their tax profile and prove to the IRS their actual tax liability. As an investor, you can also reference that manner, especially with the increase of cryptocurrency regulations in upcoming years.
3. Keep Track of All Regulations to Come Into Force
It’s better to know than to not know. So as to confront a list of regulations, we should at least be aware of what’s being discussed by lawmakers.
You can read this article to grasp some of new regulations that will call for crypto market in 2022 and upcoming years:
4. Assess Your Current Investments
Stay flexible and adaptable is what experts always advise investors. Take an honest look at your current investments, and outline where you might need new tools and strategies to have suitable adjustments with the upcoming policies. The sooner you do, the better equipped you’ll have to deal with the transforming of market.
The world of cryptocurrency will continue to involve in many regulations in coming years as more consumers increase exposure and more financial institutions take an eye on the sector. When the situation unfolds, investors must speed up, keep up with new trends and be ready to undertake a process of continuous assessment and improvement to produce more advantages with the current changeable market.