Investors are worried about the U.S. Biden administration raising taxes and curbing cryptocurrency trading, and bitcoin prices fell below the important psychological mark of $50,000 on the 23rd, hitting a new low in those 48 days.
Media reports indicate that President Biden is planning a significant increase in capital gains and other taxes on the wealthy, including plans to double the capital gains tax to 39.6% for those earning more than $1 million. Hit by the news, bitcoin fell below $50,000 for the first time since early March.
According to data provided by the Bitstamp exchange, the price of bitcoin first plunged from $54,900 to $51,500 in the overnight market on Thursday, before selling off again and falling to $48,300.
That means bitcoin is down about 24 percent from last week’s peak of $64,829, in line with what the market sees as a correction range. If Friday’s decline does not gain relief, it will be bitcoin’s biggest one-week drop since February.
Other cryptocurrencies such as ethereum and ripple (XRP) were down about 10 percent on Friday.
Market analysis suggests that the tax hike plan being discussed by Biden caused this sell-off in the cryptocurrency market.
Sources said Biden’s proposed proposal calls for raising the top marginal income tax rate from 37 percent to 39.6 percent and proposes to nearly double the capital gains tax rate to 39.6 percent for those earning more than $1 million in order to fill the roughly $1 trillion needed for his major investment plans in child care, universal preschool and paid leave for workers. trillion dollars. If you add in the 3.8% investment income tax rate that funds ObamaCare, the U.S. investment income tax will rise to 43.4%.
U.S. investors who hold bitcoin for more than a year and then want to sell it will be subject to capital gains tax under current regulations. The IRS has required that cryptocurrency transactions be reported on individual income returns beginning in 2019 and that taxpayers disclose “whether they received financial income related to cryptocurrencies by receiving, selling, sending, exchanging, or in any form.
Matt Maley, chief market strategist at Miller Tabak+, said, “What investors have to worry about is that the cryptocurrencies that are up the most are the ones that are most likely to sell off. That doesn’t mean the market is going to dump the goods or clear out, but certain people hold huge positions and if capital gains taxes are raised significantly, they could lose big money.”
Recent Comments