When Lambo? How to Buy Exotic Goods with Crypto Tax-Free

Justice Gödel Conder
5 min readAug 25, 2021


It is a universal experience for people to love cars. They’re status symbols, they’re fun, they’re cool, and they’re useful. As a young boy, I had a poster of a Lamborghini on my wall, and second, only to Wolverine claws, was what I dreamed of having someday.

With the creation of Bitcoin and cryptocurrencies in general, the world has seen the most profitable investment entity in all of recorded human history. It’s even a common meme in crypto circles to simply ask “when Lambo?” when inquiring about the potential profitability of a position or particular token. It’s the vision of CarforCoin.com to make this a reality for the people who have found themselves in this privileged position to be reaping the rewards of their crypto investments.

But this introduces something of a quandary. If you believe in the future of crypto and are extremely bullish on your portfolio, why on earth would you trade any of it in to buy a car? This is where things get very interesting. Digital assets are not merely digital dollars, they are fully programmable assets that open up entirely new possibilities and financial mechanics. I want to take a few minutes and lay out the advantages of buying a car with crypto, the right way to do it, and how you can actually increase your digital asset upside by doing so.

If you’re bullish on crypto don’t sell it. Borrow against it.

The fundamental premise of all of this is the following. If you’re bullish on crypto don’t sell it. Borrow against it. This can be done through a centralized exchange or in a completely anonymous and decentralized way that allows you to retain full self custody of your coins. If your digital asset is Ethereum or any token traded on the Ethereum blockchain (an ERC-20 token) then you can easily pursue the second option. If your digital assets is Bitcoin then you will either need to use a centralized exchange or you can swap your Bitcoin for some wrapped Bitcoin on Ethereum to make the second option possible as well. Wrapped Bitcoin is an Ethereum based token designed to be pegged to the price of Bitcoin.

Smart contracts are programs running on a blockchain guaranteed to execute by the rules of their code in a cryptographically secure way.

What makes this possible are things called smart contacts. Smart contracts are programs running on a blockchain guaranteed to execute by the rules of their code in a cryptographically secure way. Smart contracts don’t require identification, a credit score, or permission from anyone to use and function in a completely trustless way. All of the new financial capabilities made possible with these new smart contracts fall under the umbrella of what is called Decentralized Finance (Defi).

The largest of the borrowing and lending contracts is MakerDAO but many others have come on the market offering even greater benefits to their users. All of the crypto loan positions are known as CDPs or collateralized debt positions. They are called as such because users are not able to borrow any more than what their collateral is worth. If the value of your digital asset collateral drops too close to what you have borrowed then the smart contract is designed to sell the asset to pay back the original debt thereby ensuring that contact can never logically be underwater. This is referred to as liquidation.

For instance, the MakerDAO lending protocol requires a minimum of 150% collateral to debt ratio but others may require less and have better interest rates. How this works is extremely straightforward. You go to the site, connect your crypto wallet, deposit the assets and borrow what you wish in the form of a stable coin called DAI. You can then spend this DAI on any site that accepts it or transfer it to a wallet connected to a debit card to be spent that way. The Coinbase debit card makes this very easy. By doing so you have retained your digital assets but gained access to some liquidity to do with what you will. But it’s not only bullish upside that is the advantage here. You have also done something profound on the tax side of things.

Borrow against your digital assets is not a taxable event like it would have been had you sold them to access the same liquidity. It’s fundamentally no different than a home equity line of credit. You can then either pay back the loan over time or sell a smaller amount of the digital asset at some future date to pay the debt. What's more is that if you use your load to purchase an investment like more crypto or a rental property, the accrued interest on the loan is itself tax deductible as well.

There is yet another advantage to following this course of action as well. By purchasing a large physical asset, you have effectively created some stability to your position because when the market does take a downtown, you can sell the car to purchase the dip.

Notice that you did all of this without any of the traditional structures typically associated with finance and banking. In fact, you can do this in less time than it takes to open a checking account and all without a bank. This is the true revolution of self-sovereignty made possible by crypto assets. You have become your own bank.

The above equally applies if you do not currently own any digital assets but are considering buying a large asset. Instead of spending the money outright, you could purchase some promising digital asset like Ethereum or Bitcoin (wrapped), and then borrow from it to purchase the desired good. This puts you in a position to be exposed to the upside of the crypto revolution while at the same time enjoy the benefits of that investment.

If you’d like a personal consultation to help you understand or implement the above strategies, just give me a shout and I’d be happy to step you through the process or explain it in more detail.