There is a theory that Bitcoin price action fell recently because people had to sell off a good chuck for their taxes. Now that tax season is over these same speculators are hoping for a bull run. However, there is also evidence to suggest that many citizens are ignoring their tax obligations. Go figure.

https://www.ccn.com/americans-are-ducking-their-bitcoin-tax-bill-research-shows/

Credit Karma Tax analyzed the most recent one-quarter of a million filers on the company’s platform and discovered only “a tiny fraction” of the group had reported bitcoin gains. In fact, results were little changed from a similar study they did in February, with findings from the studies revealing fewer than 200 of a combined 500,000 filers reported bitcoin gains.

For a point of reference, 200 out of 500,000 is 0.04%. Only 1 out of 2500 people are claiming Bitcoin gains. Don't be surprised when the crackdown happens. I personally think privacy coins like Monero are seriously undervalued, and they will come into the limelight when the government starts hunting down these tax evaders.

The Bottleneck

If there is one thing I've realized from all this it's that cryptocurrency is very hard to tax. The government is trying to keep control of it by making sure there is a central organization (Coinbase) that they can control. This is a big reason why there is so much resistance against blockchain ATM cards and such. Once there are decentralized ways to turn fiat into crypto and crypto into fiat there will be no way to regulate it at all.

Even in its current form crypto is very hard to regulate. If you buy a bunch of mining rigs and mine coins instead of buying them there is no way for the government to track that money, especially if you use a privacy coin. If you then cash out through blockchain ATM machines there is little record as this transaction as well. The government is hanging onto control of this disruptive force by a thread.