In this case, isn’t it better to keep your capital entirely in crypto? and if you want to exchange for dollars, use a crypto x crypto broker no kyc... Paying taxes is only one option when you are in the cryptocurrency ecosystem. It is interesting to use the decentralized financial system to our advantage, instead of exchanging for fiat and paying taxes every time.
Exactly. That's crypto's main selling point. You can use it (spend it) without being taxed. Assuming you don't cash out or sell to Fiat. It's like how the rich uses their shares (stocks) in a company to get loans on top of other ones. They avoid having to pay capital gains tax to the government. At least, this is the case in the US. I can't say the same about other countries. To stay on the safe side, just gamble with privacy coins on a non-KYC casino or gambling site. I'm waiting for the day when decentralized gambling (Web3) takes over the world by storm. It would be truly revolutionary. Especially if it makes use of scaling techniques like L2s, ZKPs, and whatnot. You are free to gamble with any currency you want. Just be aware of the advantages/disadvantages of each before going all in.
But if we use decentralized gambling, the government will not stops from tracking the gamblers and still asks the casino to verify their members. But hopefully, there will still any casino that doesn't use strictly rules for their members so members doesn't have to do KYC for just playing gambling especially for small gamblers who only wants to spends their spare time.