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Charting the course of XRP


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1 hour ago, Ripley said:

But you are also assuming a directional move here.

I do not assume anything, I take what you wrote and try to show that 10k buyback is nice to have but not relevant or not "a loss" the way you want to put it.

1 hour ago, Ripley said:

I get that you are trying to make a specific point and that this is hypothetical, but inherent to that is the risk you are discounting.

Same way can be put a constant ATH hunting, its hypothetical and risk you discount too.

1 hour ago, Ripley said:

because by then it would be long term gains. 

And now you add additional parameters... 

1 hour ago, Ripley said:

Your philosophy does work to an extent in well regulated market. But in an irrational market with no signal and 100% manipulation, it only works until it doesn’t. 

You need accept loses as a normal. Same if you do not sell ATH and wait another 4 or whatever years.

It work in this market too.

1 hour ago, Ripley said:

And I think this is the big difference in how you and I approach crypto. I made it clear that I want to own XRP. I know that’s a mindset that’s different but I just don’t trade.

Its your choice and your targets, but do not present it in conjunction with tax like its a loss and no other way.

Your constraints are yours, therefore I showed you that they are not significant.

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1 hour ago, xrp-nuke said:

I do not assume anything, I take what you wrote and try to show that 10k buyback is nice to have but not relevant or not "a loss" the way you want to put it.

Your example wasn't accurate. See below. Also, you simply brushed away "10k buyback is nice to have but not relevant". It is not relevant to you. I respect that. But it is relevant to me. 

Quote

You could put 7192 @ 1 USD and sell it @ 2 USD, that is 4171 USD to your capital, equals 11363 in total

If you would be able to sell 20k @2 than your capital would be 11600, so more on 237.

But 

Point is, at 1 USD you bought less than 10k XRP and eventually end up at same stage if you would sell 10k @2 USD, more important you bought back at 28.58% decline, not 50% as you claim.

Note: I know this is hypothetical. I'm simply trying to explain that you have discounted various factors. So let me go through it again. I also made a mistake in calculating profits because of a typo. I corrected that below but it doesn't change the conclusion.

Put 7192 @ 1 USD and sell at @ 2 USD. That is not 4171 USD added to your capital. You are left with a total of 4171 USD and 0 XRP. I don't understand how it became 11363 USD.

  1. Buy 10000 XRP at 0.2 USD. Balances: -2000 USD, 10000 XRP.
  2. Sell everything at 1.4. Profit = (1.4 - 0.2) * 10000 = 1.2 * 10000 = 12000. After taxes, Balances: 6960 USD, 0 XRP
  3. Buy XRP at $1. Balances: 0 USD, 6960 XRP
  4. Sell everything at $2. Profit = 6960 USD. After taxes, Balances = 6960*0.58 = 4036.8, 0 XRP

You have mentioned 11363 USD. How does that happen? Did I miss something? Even if we take the original number (which was wrong), after selling at $2, I am left with 4171 USD and 0 XRP. 

As you see above, if I stopped at step 1, I would have made 2x profits in USD.  If I did both step 1 and step 2, I will be left with 3x profits in USD.

Selling 10000 directly at $2 gives USD 10,440 after tax if it is short term capital gains (no additional factors) Of course, this is just a hypothetical example of course. But you need to understand that capital gains taxes are not a joke. If you are lucky to be in a country like Belgium where there are no capital taxes, then great! Your approach may be very good! It won't work for me.

I didn't understand how I can magically sell 20k at $2. Where am I getting 20k XRP? Maybe I misunderstood you. That's okay.

1 hour ago, xrp-nuke said:

Your constraints are yours, therefore I showed you that they are not significant.

And as you can see above, they *are* significant. And they are not constraints. They are choices. Both approaches have their own risk. One is not better than the other. 

1 hour ago, xrp-nuke said:

Same way can be put a constant ATH hunting, its hypothetical and risk you discount too.

I am neither ATH hunting nor risking any discount. The whole point of what I said was that I have a very long-term view. When it goes down enough, I buy, if that is the best place to put my money at that time. When it goes up enough, I can take a few profits here and there based on various factors. But I am not buying and selling based on TA. I don't trade. At least not at intra-day or daily charts. Monthly, perhaps. It depends.

Just because XRP goes to ATH doesn't mean it is too overbought. Hypothetically, say U.S. CBDC is built on private XRPL and XRP goes to ATH in 2 days. Will you sell? And just because XRP goes to 0.15 doesn't mean it is cheap. May be the court says secondary sales are securities. Will you buy? Macro factors matter. Personal factors matter.  DOGE is down 80%. Doesn't mean I think it is "cheap". 

Examples of macro factors: Regulatory changes (stablecoin regulations, DeFi, action against exchanges, etc.) , macro factors like Inflation and Fed's response (which you yourself admitted is very important), geopolitical risks (China/Russia vs the West), Climate Change, and of course specifically for XRP, regulatory clarity, etc. 

Personal factors - Changing risk appetite, personal life changing events (e.g. child being born, education, marriage, buying a house etc.), clearing out debts, etc. Most of these can be planned ahead by several months and there will be plenty of opportunities to get a profitable trade. Could be selling, shorting, market neutral volatility trading, etc.

And depending on that, I may sell at $0.5, or $2 or $20 or $50. Or if I can get a reliable way to earn cash flows (e.g. market making for the Liquidity Hub), who knows? Maybe I'll never sell. The same goes for buying. Just because it goes to 0.1, I may not buy. 

You are assuming that crypto is the only place to make 20x or 100x or that all I do is cross my fingers and hope XRP goes ATH.  There are lots of ways to make those gains my friend :) 

Edited by Ripley
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24 minutes ago, Ripley said:

You have mentioned 11363 USD. How does that happen? Did I miss something? Even if we take the original number (which was wrong), after selling at $2, I am left with 4171 USD and 0 XRP. 

Depends on countries and your rates are stupid high. In the US, even if you earn more than 500k, the tax rate is 37%, it seems.

Yes, every winning trade is a taxable event in most places, but you need to pay the taxman once a year, not after every trade. So instead of taking that money out, re-invest the taxman's money and the profits compound. It's just a form of leverage. You pay taxes on the total profits (minus losses) you booked by the end of the fiscal year.

But hey - talk to your accountant. I for sure delegate this sort of stuff to mine and he optimizes things for me.

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2 minutes ago, Troote said:

Depends on countries and your rates are stupid high. In the US, even if you earn more than 500k, the tax rate is 37%, it seems.

Yes, every winning trade is a taxable event in most places, but you need to pay the taxman once a year, not after every trade. So instead of taking that money out, re-invest the taxman's money and the profits compound. It's just a form of leverage. You pay taxes on the total profits (minus losses) you booked by the end of the fiscal year.

But hey - talk to your accountant. I for sure delegate this sort of stuff to mine and he optimizes things for me.

Yep. Agreed. Also wash sales have been tremendously valuable in the past few years for crypto in the US. Should be interesting once they’re banned. 

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1 hour ago, Ripley said:

You have mentioned 11363 USD. How does that happen? Did I miss something? Even if we take the original number (which was wrong), after selling at $2, I am left with 4171 USD and 0 XRP. 

Redo the math, you do silly mistake, how on earthe buying ar 1$ 6k XRP leave you with 4k after sellimg at 2?

1 hour ago, Ripley said:

didn't understand how I can magically sell 20k at $2. Where am I getting 20k XRP? Maybe I misunderstood you. That's okay

Typo, 10k.

1 hour ago, Ripley said:

Your example wasn't accurate. See below. Also, you simply brushed away "10k buyback is nice to have but not relevant". It is not relevant to you. I respect that. But it is relevant to me. 

Your example was not accurate not mine, I took your numbers.

I showed you a way, one among many, where 50% was reduced to 30%. If its irrelevant to you, I cant help here.

1 hour ago, Ripley said:

You are assuming that crypto is the only place to make 20x or 100x or that all I do is cross my fingers and hope XRP goes ATH.  There are lots of ways to make those gains my friend :) 

I did not assume that.

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14 minutes ago, xrp-nuke said:

Redo the math, you do silly mistake, how on earthe buying ar 1$ 6k XRP leave you with 4k after sellimg at 2?

2 hours ago, Ripley said:

You’re right on this calculation. Profit of 4k over 6k.

My overall point stands though. Your approach is more about trading. I am comfortable with long term view. I’m not a momentum trader. That doesn’t mean I’m waiting for ATH, which is what you suggested. I’m waiting on changes in other factors. I might sell at 2x profit or 200x profit or never. Or I may lose my funds because of a bad bet. I have my hedges that will make up for losses in other bets. 

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7 minutes ago, Ripley said:

You’re right on this calculation. Profit of 4k over 6k.

My overall point stands though. Your approach is more about trading. I am comfortable with long term view. I’m not a momentum trader. That doesn’t mean I’m waiting for ATH, which is what you suggested. I’m waiting on changes in other factors. I might sell at 2x profit or 200x profit or never. Or I may lose my funds because of a bad bet. I have my hedges that will make up for losses in other bets. 

But your initial post implied a different message, from what you say now. Anyhow, points been  made.

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12 minutes ago, xrp-nuke said:

But your initial post implied a different message, from what you say now. Anyhow, points been  made.

It was based on price action so far since December 2020. My point was about there being multiple approaches and not just one, and that each approach has a cost and a benefit. Your example of $2 gives slight better returns but once you hit $2.5 or more, it starts to lose to longer term play. 

In any case, like you said, points have been made. Hope both of us make good profits over time.

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8 hours ago, Ripley said:

Buy 10000 XRP at 0.2 USD. Balances: -2000 USD, 10000 XRP.

Sell everything at 1.4. Profit = (1.4 - 0.2) * 10000 = 1.2 * 10000 = 12000. After taxes, Balances: 6960 USD, 0 XRP

Buy XRP at $1. Balances: 0 USD, 6960 XRP

Sell everything at $2. Profit = 6960 USD. After taxes, Balances = 6960*0.58 = 4036.8, 0 XRP

Actually @xrp-nuke is right, your maths are completely off. You conflate "balance" and "profit".

 

Scenario 1: Not trading (buying at $0.2 and selling at $2).

1. Initial Acquisition (10,000 XRP @ 0.2 USD): Balance: 0 USD, 10,000 XRP; Portfolio value: 2,000 USD

2. Disposal at 2 USD: Balance: 20,000 USD, 0 XRP ; Portfolio value: 20,000 USD; Profits: 18,000 ; Tax Liability (42%): 7,560 USD.

That leaves you with: Gross: 20,000 USD ; Cumulative Tax Liability: 7,560 ; Net Worth: 12,440 USD.

 

Scenario 2: Trading and putting the taxman's money aside immediately (not what I would do unless we are close to the end of a fiscal year, but that's how you approach it so fine).

1. Initial Acquisition (10,000 XRP @ 0.2 USD): Balance: 0 USD, 10,000 XRP ; Portfolio value 2,000 USD.

2. Disposal at 1.4 USD: Balance: 14,000 USD, 0 XRP; Portfolio value: 14,000 USD; Profits: 12,000 USD; Tax Liability: 5,040 USD ; Net worth: 14,000 - 5,040 = 8,960 USD.

3. Acquisition at 1 USD: Balance: 5,040 USD, 8,960 XRP ; Portfolio value: 14,000 USD

4. Disposal at 2 USD: Balance: 22,960 USD (= 5,040 + 2 × 8,960), 0 XRP ; Portfolio value: 22,960 USD; Profits: 8,960 USD ; Tax Liability: 3,763.20 USD.

That leaves you with: Gross: 22,960 USD ; Cumulative Tax Liability: 8,803.20 USD ; Net Worth: 14,156.80 USD.

 

Scenario 3: Trading and using the taxman's money as leverage until taxman needs to be payed.

1. Initial Acquisition (10,000 XRP @ 0.2 USD): Balance: 0 USD, 10,000 XRP

2. Disposal at 1.4 USD: Balance: 14,000 USD, 0 XRP; Portfolio value: 14,000 USD; Profits: 12,000 USD; Tax Liability: 5,040 USD.

3. Acquisition at 1 USD: Balance: 0 USD, 14,000 XRP

4. Disposal at 2 USD: Balance: 28,000 USD, 0 XRP ; Portfolio value: 28,000 USD; Profits: 14,000 ; Tax Liability: 5,880 USD.

That leaves you with: Gross: 28,000 USD ; Cumulative Tax Liability: 10,920 ; Net Worth: 17,080 USD.

 

In these scenarios, you are better off trading regardless of taxes. Even if in scenario 2 you don't buy back the full initial stack of 10,000 XRP (which seems to be your primary worry), you make more money that way.

Taxes become trickier if you want to change a tax regime (e.g. move from short-term capital gain taxes to long-term capital gain taxes). For instance, if scenario 1 is taxed at 20% (because you held for more than 12 months) and scenario 2 and 3 are taxed at 42% (because you traded during the year), then it makes a difference although scenario 3 will still leave you better off. That is country-specific though, there is no such thing as a "short-term vs long-term CGT" in the UK for instance.

Big issues and horror stories arise if you are not 100% clear how much money you owe to the taxman and by when. For instance, you make profit in 2021, owe the taxman a large sum of money in 2022, but you lose it in 2022 before paying him. Then you're in big trouble.

Edited by Troote
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1 minute ago, NightJanitor said:

Serious Q:  How long you idiots gonna keep doing these lengthy replies to xrp-nuke as though he's not ******* w/you?

Because he's not. You don't like him, fine, your choice. But don't project your own feeling onto others.

I think a lot of resentment towards him comes from the language barrier. Just because people are not bilingual and don't pick the most suitable word all the time doesn't mean their ideas are wrong. It just requires an extra effort to understand. It's called listening, you should try it.

 

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Just now, Troote said:

Because he's not. You don't like him, fine, your choice. But don't project your own feeling onto others.

I think a lot of resentment towards him comes from the language barrier. Just because people are not bilingual and don't pick the most suitable word all the time doesn't mean their ideas are wrong. It just requires an extra effort to understand. It's called listening, you should try it.

 

pass!

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1 hour ago, Ripley said:

I think we will see 26/27k BTC and 0.45 XRP this week. 

I would say even 0.3x would be possible if we go that low, 1600 sats under atack one more time, not sure how lomg it can hold.

Anyhow, mid week expect some relief to 0.65, and BTC to 38k. 🤣

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