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Getting paid in the world’s largest cryptocurrency

By Guardian Nigeria
20 December 2021   |   8:18 pm
Bitcoin, the once-fringe idea, now most-widely-talked-about-and-used cryptocurrency, seems to be in the news almost every day of the week. From its colorful investors with big imaginations to wild fluctuations, the cryptocurrency seems to always capture the imagination of the news and those who wish they'd jumped in the ring and become investors a few years…

Bitcoin, the once-fringe idea, now most-widely-talked-about-and-used cryptocurrency, seems to be in the news almost every day of the week. From its colorful investors with big imaginations to wild fluctuations, the cryptocurrency seems to always capture the imagination of the news and those who wish they’d jumped in the ring and become investors a few years ago. Recently, Bitcoin made it to the news once again; this time, it lost Bitcoiners 22% of their investment as a result of its market slump. Ouch! 

As many Bitcoin investors got up and dusted off the pieces of what was their balance sheet, many found themselves asking the question, “When was the last time my paycheck’s value fell by 20%?” When you think about it, with an ever-increasing barrage of celebrities, athletes and even politicians boasting of being paid in the token, that’s a legitimate question. 

So, What Do We Know So Far?
While some early Bitcoin enthusiasts thought that the cryptocurrency would become a widely accepted payment method and while some merchants are accepting Bitcoin, it is still a long way from becoming a universal currency and is more commonly thought of as a store of value. Furthermore, you will be charged fees each time you use Bitcoin to make a purchase. Fees have recently been under $10; however, the average charge might approach $60.

Do you earn the same as a well-known athlete? If not, investing your whole paycheck in Bitcoin for a year or even a few months will almost certainly put you at danger. A (financially prudent) superstar who was paid millions of dollars over time would have had plenty of time to put money, property, and other assets aside. In the case of a bear market, huge losses — possibly an entire year’s salary — would be easier to endure.

This isn’t to say you shouldn’t work for a crypto company. According to Edward Moya, a senior market analyst at Oanda, someone earning $100,000 might invest 20% of their income in cryptos and equities, assuming that the remaining 80% is spent on housing, food, utilities, and transportation. After all, some employees are already paid in a combination of shares and cash. According to the experts, those who are still young or have less financial responsibilities ought to consider just around a quarter of their paycheck on Bitcoin. 

Tax Planning
With more and more businesses adopting Bitcoin, governments have no choice but to take steps to regulate the crypto niche, which means there could be some new rules and regulations over the horizon. And according to the pundits, it is possible that this could bring about a compulsory stipulation – taxes. This is the reason why many experts are calling for those who are or plan on getting paid in Bitcoin to plan for their tax strategy early on, as in, right now. 

Virtual currencies are treated as property by the Internal Revenue Service in the United States, which means that their tax position is similar to that of stocks or bonds rather than cash. As a result, receivers must pay ordinary income tax based on the fair market value at the time of receipt. When recipients sell or exchange the coins for other digital currencies, they must pay capital gains taxes.

Crypto paychecks may be a problem for both companies and employees due to complicated taxes computations. Because prices fluctuate, there is always a disparity between how much the employer paid for the coin and the market value at the time it is disbursed as compensation. But, the good news is, there are ways in which people can keep track of the value of Bitcoin during the time of transaction. To simplify the process, it is best for those who get paid in Bitcoin to use platforms such as the Bitcoin Era app to invest their crypto stash to make much more gains over the long term. 

If you’re looking to step into Bitcoin trading, then bitcoin code is the secure and reliable trading platform you’re looking for.