You'd have more than doubled your money in 7 years. That's pretty great. CPI/inflation went up 25% in the same period. Of course in my country (DK) 50% of the return would probably go to taxes, leaving a 25% actual return after inflation and taxes.
- Lowering one's expenses looks even more important in Denmark than in many other places.
- You have the option of moving out of Denmark for the financial accumulation phase.
- If you're not willing to move from Denmark, wouldn't it make sense to set up a company in a low tax, low cost of living country nearby, give it some local substance and invest through there? Estonia and Latvia come to mind. It looks like a mark-to-market valuation for capital gains taxation would not be needed. Even if it would, plenty of legal options exist to soften that blow once you are in control of the company.
@thedollar: assuming you don't have any other income, it's possible to achieve an effective taxation rate of about 15-17% on the first ~100k DKK of stock-based gains in a regular taxable account (i.e. not the aktiesparekonto).
The first ~60k DKK will be taxed at 27%, no way around that. But the next ~30-40k after that (depending on how you calculate it, plus which municipality you live in) can be used by your personal tax deduction (personfradrag), assuming you aren't using that for other types of income, meaning 0% taxation on this part.
And remember, this is the amount of profit you can realize each year, so the actual amount of stock you can sell will be much higher, because you didn't purchase at 0.
In other words, there should be plenty of wiggle room for an ERE-minded person. Apart from what I wrote above, it obviously makes sense to de-financialize as much as possible, i.e. reduce your need for money as much as possible.
@Seppia: Denmark uses both mark to market as well as realization, depending on the type of security. Generally mark to market is to be avoided, except for a few special cases.
I wouldn't want to move securities around from one tax domicile to the other. The headache isn't worth it. Plus, doing what you describe is considered a taxable event in Denmark haha. It's the "don't let the door hit you on the way out" tax on people wishing to leave the country. So yeah, I guess I value my connections to the place more than the money.
Didn’t know it creates a taxable event in Denmark.
This obviously renders my suggestion useless.
And good for you that you believe being in Denmark is more important than saving some money. The objective is to be happy, not to maximize financial assets.
I have only been to Copenhagen a couple times but found it to be a wonderful place with what seemed to be a high quality of life.
+1 on Copenhagen. Actually, other Nordics capitals I've been to (Stockholm and Helsinki) also seem like great cities. I wish the rest of the world could be like that.
This past week a lot happened politically this week w. crypto:
1. politicians in the US seemed to start talking about crypto a lot in a positive way & reverse course on negative legislation
2. major hurdles to listing an Ethereum ETF were removed by SEC
This probably means:
a) ethereum will have an ETF listed soonish & eth will go up much in price than people were expecting
b) ethereum beta (memecoins on eth) will go up (PEPE, MOG, etc)
c) bitcoin miners operating in USA will probably not have a 30% electricity surcharge applied. Very big headwind removed here.
d) all of this prob distracts a bit from the price of bitcoin directly??
I took some very large positions in bitcoin miners, because I felt like this expresses a leveraged bet on btc price. I was planning to exit these positions, but now I believe it makes sense to hold them longer given that they should re-price to take out the electricity surcharge fear overhang.
Do you play directly with ETH and why/why not? iirc, its supply if not limited so I'm not sure what appreciation anyone investing in it can count on. Question 1b: from various podcasts, AI is expected to create a high electricity demand in the years to come. Do you see that impacting BTC? If AI is deemed to have geostrategic advantage (have no clue whether it does or does not, but there have been statements along those lines online) it is possible that this hurts competing energy consumers that aren't deemed strategic.
Since the Ethereum Merge (move from proof-of-work to proof-of-stake and introduction of a burn mechanism) in September 2022, the Ethereum supply has actually been deflationary, at an annual inflation of negative 0.2%. However, in the short-term, partly due to some changes related to lower transaction fees, Ethereum's supply has become inflationary since the start of April 2024.
Ethereum inflation rate for early May stood at 0.54%, just 0.29 percentage points lower than Bitcoin's post-halving rate of 0.83% (prior to the recent halving, BTC's inflation rate was roughly 1.7%).
@ertyu I will add some more info you might want to think on
ETHE (grayscale ethereum trust) is already tradable on the stonk market & did trade at a huge 25% discount to the NAV as recently as last week because it was a trust that could not be withdrawn from. Conversion to ETF allows this, so there should be some outflows pushing down the price imo as people dump this asset they are stuck in. I believe there will be a small selloff and that could be your entry if you were inclined.
As @OutOfTheBlue mentioned, ethereum is only very mildly inflationary and they keep inventing these staking and re-staking ponzi schemes to lock up supply forever (see Eigenlayer, etc).
Will Eth etf impact BTC? Yeah probably its a negative impact because it takes flows away but not sure. A lot of people see them as very different assets and own them for very different reasons.
Electricity and BTC? Not sure but a lot of it is being done from stranded resources now like remote natural gas streams that were previously simply flared off. You can't move electricity over great distances without infrastructure so this used to just be wasted.
However, the price of electricity doesn't matter unless you are miner. If it goes up dramatically fewer people will mine, hashrate will drop and the difficulty will readjust to become easier as it has done every 2 weeks for the past decade. Blocks will be produced still by whoever is mining.
I want to thank everyone who supplies quality info on the topic to the ERE forums. An overwhlming amount of what is out there is either irrational or a grift in one way or another. For a noob, finding quality info is hard and requires getting through A LOT of crap. So your thoughts and info are much appreciated.
- Lowering one's expenses looks even more important in Denmark than in many other places.
- You have the option of moving out of Denmark for the financial accumulation phase.
- If you're not willing to move from Denmark, wouldn't it make sense to set up a company in a low tax, low cost of living country nearby, give it some local substance and invest through there? Estonia and Latvia come to mind. It looks like a mark-to-market valuation for capital gains taxation would not be needed. Even if it would, plenty of legal options exist to soften that blow once you are in control of the company.
Yes, that's exactly the key. Lowering expenses in this country is critical. Every time you can lower your expenses you will need an order of magnitude less capital in part also due to what @urgud is pointed out that taxes are progressive. So if you can live on a small amount the impact from taxes would be negligible.
Moving out of Denmark would be a pretty good option as well. I would be able to move to Cyprus and still stay 180 days in Denmark during the summer if I wanted to.
I have an interesting trade to share I slowly eased into.
Core Scientific was one of the largest ethereum miners before the merge (you can't mine ethereum anymore), and then it became one of the largest bitcoin miners since it already had all the data centers.
It started trying to pivot to GPU hardware provisioning (it has huge GPU clusters and data centers) but then it went bankrupt in the aftermath of the FTX dump (nov 2022).
It went through bankruptcy restructuring and emerged with less debt, they are still one of the largest bitcoin miners now. After they reissued the equity they also issued warrents to equity holders:
CORZZ - 01/23/2029
CORZW - 01/23/2027
Basically if the price of the shares double these will pay of big & the company will have a huge cash position. There are not a lot of cheap levered bets to the price of bitcoin available anymore, these are still trading at a low price imo. But, the price is not moving because... why? Bitcoin was up a lot today and CORZ was only up 3%... ? Answer this question you will know if this is a good bet or not. I'm not sure yet myself.
I'm still holding the $CORZ trade, I plan to start taking profits soon though. My initial thesis was:
1. this company mines the same amount as $mara
2. its trading at $3 a share. (500 million market cap)
3. $mara is at $20 a share (5 billion market cap)
4. It's 10x with that math but with dilution from warrants its a 5x. So it should go to $15.
I plan to be half out at $15 depending on market conditions.
Some recent research on $corz calling for 17.50 a share. The HPC data center stuff obviously changes things here. I think mostly I got lucky on this it could have taken way longer to play out just on bitcoin price alone.
