Which means that it isn't treated as a currency.
I could buy a Tesla with Bitcoin, but what good is that if I have to pay capital gains tax for "selling" the Bitcoin even though I didn't actually sell it, I used it?
I could buy a Tesla with Bitcoin, but what good is that if I have to pay capital gains tax for "selling" the Bitcoin even though I didn't actually sell it, I used it?
You would (almost) never pay cap gains on cash even if the law required it, because cash goes down in value over time. Everyone knows this, so no one holds cash, they buy stocks, bonds and realestate. When it comes time for the Tesla, they have to sell those assets, pay cap gains, then buy it, just like BTC. If you wanted to avoid cap gains, your only choice is to hold cash, in which case you would have less overall money at the end.
tl;dr: all appreciating assets are encumbered with cap gains, the only way to avoid it is to buy non-appreciating assets, which is worse