How to prepare your Bitcoin investment for regulations

Are you wondering what to do as you anticipate Bitcoin regulations? If so, here’s how to prepare your Bitcoin investment for the rules. 

The Bitcoin market has undoubtedly grown and captured the government’s attention. Today, many governments globally are looking for ways to regulate this digital currency. Satoshi Nakamoto wanted the world to have a decentralized digital currency free of regulation or manipulation by any centralized authority. Therefore, some people wonder whether governments can regulate Bitcoin.

While it’s unclear whether any government can regulate this widely accepted cryptocurrency, investors want to safeguard their investments from such moves. Currently, it’s hard to determine how government regulations could affect average crypto investors. However, a while ago, the Chinese government’s move caused impacts that many investors felt worldwide.

If you have invested in Bitcoin and news of potential regulations makes you panic, here’s what you can do in readiness for the rules.

Use reputable platforms

Maybe you purchase your Bitcoins via crypto exchanges before transferring them to a digital wallet for safe holding. In that case, you have many options when choosing a crypto exchange. To ensure the safety of your Bitcoin investment, use a licensed and reputable platform. If it’s your first time buying Bitcoin, then sign up with a reputable digital platform like bitcoin-investor.app

Using a reputable crypto trading platform will eliminate the chances of having legal issues with relevant authorities for engaging in illegal trade. Perhaps, the best approach is to investigate the available crypto exchanges to select a licensed and reputable platform. Read reviews from other users to know whether the crypto exchange has had regulatory issues before.

Stick to an effective Bitcoin investing strategy

Regardless of what happens in the news or what other people say, sticking to your investing strategy is the best action to take at the moment. When investing in the stock market, you don’t stop your contributions to 401(k) or Roth IRA due to a news headline or a bad day. Similarly, don’t change your Bitcoin investing strategy drastically when you hear that the government might regulate the cryptocurrency.

While changes in the crypto industry might be inevitable, be optimistic that your investment will grow and that Bitcoin is not going anywhere. Therefore, keep investing in this popular cryptocurrency while adhering to the regulations once they become effective.

Keep records

Maybe your country’s taxman requires you to pay taxes when trading or investing in Bitcoin. In that case, keep records of all Bitcoin transactions for your tax liabilities. Currently, the IRS sees Bitcoin as a property. Therefore, trading this virtual currency creates a taxable event.

As a Bitcoin investor, you’re responsible for tracking your crypto transactions. Some crypto exchanges provide year-end tax documents with details of your trading activity. You can also find online tools to track your crypto transactions and keep an accurate record. Therefore, research the market to identify the best tools for record-keeping and tracking your taxes.

Safeguard your Crypto holdings

The increasing Bitcoin prices make crypto investors a target for scammers and fraudsters. People can access your crypto wallet and transfer your tokens if they get your private wallet. Therefore, ensure that only a reliable and trustworthy person can access it.

Also, avoid keeping large amounts of Bitcoins in your crypto exchange account. While the Bitcoin network remains secure and reliable since no hacker has ever infiltrated it, you can’t say the same for crypto exchanges. Criminals have hacked some crypto exchanges and made away with Bitcoins worth a lot of money. Therefore, keep only the amount of Bitcoin you want to use to trade in your crypto exchange account.

Parting shot

Bitcoin regulations might be inevitable. However, this shouldn’t make you panic. Instead, follow these steps to prepare your Bitcoin investment for possible rules.