This is the poison pill for BTC in my opinion. I have a very small amount of BTC and this is the primary reason I don't have a larger investment, don't make more of an attempt to use it as currency, etc. The central banks/governments aren't going to give up their power so easily. They may have low-key destroyed crypto by considering them commodities.

The only way crypto can win* is if a plurality of people just choose not to follow the tax laws. It has to be enough people that it becomes unenforceable.

win* in this case is defined as being a 1st order currency largely unencumbered by central banking/government authority.

>The only way crypto can win* is if a plurality of people just choose not to follow the tax laws. It has to be enough people that it becomes unenforceable.

That's impossible if you spend your Bitcoin via Visa.

You can just borrow against it to spend it. No tax whatsoever and you hold on to your asset.

How do you eventually repay that loan (or at least pay interest)?

Guessing: you can sync up once a year (or even once every 5 or 10 years) and pay taxes on that transaction at that day's price.

That's ok if you are happy with shifting the tax date. I can definitively see how this decreases the accounting burden but not the tax burden.

If you buy euros with dollars, keep them, then buy dollars back, is that lunged as capital gain/loss?

I believe currency trading has special tax treatments distinct from commodities.

https://www.investopedia.com/articles/forex/09/forex-taxatio...

In short, yes, in the US, with a few exceptions.