The Argentine stock market is looking forward to being able to trade bitcoin (BTC) on the traditional stock market: but what is this possibility really about? And what taxes will it involve?
Obviously, the bitcoin asset will not be listed or operated on the stock market, either in the United States or in Argentina. What is already listed on Wall Street and other exchanges are Bitcoin ETFs.
What are ETFs? The “Exchange Traded Fund” are publicly traded investment funds, perhaps the best known being the Standard and Poor’s 500 of the United States, which replicates the behavior of the main companies in that country.
In the case of bitcoin spot ETFs, they are funds that try to follow the price of bitcoin and do so, mainly, by directly purchasing BTC. Today there are already 11 Bitcoin ETFs listed in the United States (BlackRock’s—IBIT—being the most important) and another 22 listed on exchanges in other countries (such as Canada and Germany).
That is, since bitcoin ETFs are listed on the stock exchange, investors can acquire shares in said ETFs and will indirectly be investing in bitcoin. But they will not be holders of Bitcoin, but rather They will only hold shares that represent a fraction of the listed ETFs.
And how does the Argentine Stock Market come into play? Through an instrument known as CEDEAR (Argentine Certificate of Deposit), in the southern country, several ETFs are already listed (like that of Standard and Poor’s), and there is the possibility that in the future the CEDEAR bitcoin ETFs will also begin to be listed, as already reported by NoticiasVE.
In this way, Argentine investors could acquire shares in these ETFs from their local stock exchange accounts, without having to resort to the foreign stock market.
And what tax advantages would the CEDEAR Bitcoin ETF option have?
For individuals, the profit from buying and selling CEDEAR on the Argentine stock market is exempt from income tax, That is, no taxes are paid on that result. On the other hand, if the ETF were operated directly on Wall Street, the Argentine authorities would demand a 15% tax.
That 15% income tax would also be paid in case of direct sale of bitcoin.
On the other hand, in the Argentine tax on Personal Assets, the ownership of both the ETFs and the potential CEDEARs of those ETFs is reached. However, the “minimum” from which the tax will be paid for the year 2024 is around US$250,000 in total valuation of assets achieved.
In any case, despite the tax benefits, we must never forget that through ETFs or their CEDEAR we are not holding bitcoinbut of shares of an investment fund that invests in bitcoin.
Not your keys, not your coins.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of NoticiasVE. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.