Hi,
I'm considering using some online automated trading software to do some cryptocurrency investments, with the software you give it an investment amount, and a range of prices you want to trade between and it automatically does the buy/sell of the cryptocurrency to exploit the ups and downs of the market (grid trading). What I need to know is what accounting I need to do for HMRC tax purposes. For all intents and purposes, you give the software £x and once you've run the bot for a certain amount of time, or released profits you end up with £x + an amount (hopefully), but the software in the meantime has done 100s or 1000s of individual transactions. Do I need to account for each of the software's individual transactions between currencies, or is it a case of accounting for the initial investment + any profit made from it when you release the profit on that software?
Example:
* Month 1: Investment £1000 into ExampleCoin, trading between £1 and £5
* Software makes 500 transactions over 3 months
* Profit released at Month 3: £100
Would I just need to account for starting the bot + the profit taken out, or each of those 500 transactions it did to make the profit, each one could be a buy or sell of the ExampleCoin.
Would the profit from these be income or capital gains?
Thanks
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