Ark Investment’s Cathie Wood Cautions Investors On Buying Tesla With Bitcoin (BTC)

By Bhushan Akolkar
Published March 26, 2021 Updated March 26, 2021
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Ark Investment’s Cathie Wood Cautions Investors On Buying Tesla With Bitcoin (BTC)

By Bhushan Akolkar
Published March 26, 2021 Updated March 26, 2021

Earlier this week, Tesla CEO Elon Musk announced that the company has started accepting Bitcoin payments against the purchase of any Tesla model. While this news certainly sparked excitement among Bitcoin investors and Tesla fans, there’s a moment of caution to observe.

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Ark Investment’s Cathie Wood is a bit unsure of whether investors should really buy Tesla with Bitcoin. During a webcast hosted by the CBOE, Wood warned Bitcoin (BTC) investors not to get swayed by the offer until they really understand the tax code. Wood said that any decision in a hurry could possibly attract scrutiny from the IRS, as investors might face massive taxes.

“The IRS has something to say about this, so if you have huge gains in your bitcoin, I don’t think I would bear much in the way of transactions until we get maybe some changes on the tax front,” Wood said.

Understanding the Bitcoin Tax Code

Under the recent tax code, the IRS considers Bitcoin and other digital currencies as “property”, similar to bonds and stocks. Thus, the use of Bitcoin to purchase any goods/services could lead to massive capital gains taxes. The percentage of tax a person pays depends on how long the investor has been holding the assets.

Even if the period of holding is above 1 year, the capital gains taxes are anywhere between 15-20%. Wood’s comments came just two days after Elon Musk made the announcement.

Cathie Wood has been a huge advocate of Bitcoin (BTC) with her company also having some exposure to the world’s largest cryptocurrency. However, Wood sees Bitcoin (BTC) more like a “store of value” aka digital gold instead of a medium of transaction.

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan Akolkar
715 Articles
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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