Tax. And consequences. In 1965 the Labour (what a surprise) Government introduced Captial Gains tax but exempted tax on your principal residence. The result has been a huge leveraged drive by the public into property, resulting in unaffordable housing and a bloated banking sector. Classic unintended consequences.

In some European jurisdictions Bitcoin gains are not taxed beyond certain time thresholds and in other countries there is little or tax. What is the result? Huge Bitcoin adoption relative to the high tax states. How will this play out?

It’s hard to be sure, but one can imagine capital and people will gyrate to the low tax states and the high tax states will be stripped of both over time. Not good for them. We moan a lot about inflation but tax rates are more onerous in general and will play a massive role in sorting winners from losers over the next decades as both capital and people are able to move so much more readily than in previous centuries.