Dan on Nostr: Bitcoin ETFs and associated stocks like Microstrategy have volatility such that they ...
Bitcoin ETFs and associated stocks like Microstrategy have volatility such that they can have 30-50%+ swings up and down in price.
What an person can do, if they own both, is sell a bunch of bitcoin and buy an equal amount of Microstrategy , if there is a huge decrease in the price. What this does is locks in a paper capital loss without sacrificing position, while keeping away from "wash sale" rule restrictions. They avoid wash sale restrictions because technically they are completely different securities. They can also do it the other way around, or substitute a closely correlated bitcoin mining stock.
The general idea is to lock in as much Capital loss so that you can apply it to other capital gains in one's portfolio. Capital gains have loss carry-forwards that can really help.
I have found Bitcoin to be one of the best loss generators out there if someone is looking. It's because of its history of constant heavy and steep volatility.
What an person can do, if they own both, is sell a bunch of bitcoin and buy an equal amount of Microstrategy , if there is a huge decrease in the price. What this does is locks in a paper capital loss without sacrificing position, while keeping away from "wash sale" rule restrictions. They avoid wash sale restrictions because technically they are completely different securities. They can also do it the other way around, or substitute a closely correlated bitcoin mining stock.
The general idea is to lock in as much Capital loss so that you can apply it to other capital gains in one's portfolio. Capital gains have loss carry-forwards that can really help.
I have found Bitcoin to be one of the best loss generators out there if someone is looking. It's because of its history of constant heavy and steep volatility.