Bitcoin investors maintain their losses amid reports that it is President Biden Planning to increase capital gains taxes on the richest Americans.
The price of the volatile cryptocurrency fell nearly 10 percent on Friday to just above the $ 49,000 mark, its lowest level since early March when the White House reportedly rejected a proposal to do so Almost double the taxes wealthy people pay on investment.
Bitcoin recently changed hands at $ 49,072.72 – a 9.9 percent drop from the previous day and a reduction in total market cap to $ 917.1 billion – well below the $ 1 trillion mark, according to Coinbase, which it had exceeded for the first time in February.
Biden plans to raise capital gains tax up to 39.6 percent for people earning $ 1 million or more. The plan, slated to be announced next week, would be a massive hike from the current 20 percent tax rate. A 3.8 percent tax on investment income used to fund Obamacare would also remain in place, meaning the new maximum rate would be 43.4 percent.
For $ 1 million earners in high-tax countries, capital gains rates could even end higher than 50 percent. For New Yorkers, the combined state and federal capital gain rate could be up to 52.22 percent. For Californians, it could be 56.7 percent.
Before the tax news, bitcoin had played a role. The digital coin reached April 14th, the day of the Launch of the largest cryptocurrency exchange in the United States, Coinbase, on Nasdaq. The rise of the digital currency comes when the COVID-era economic reviews fill investors’ pockets.
Jeffrey Halley, Senior Market Analyst at OANDA, said Reuters The rise in this cryptocurrency could soon weaken.
“Bitcoin headed south today after President Biden signaled he wanted to raise capital gains tax in the US,” Halley said. “Whether or not that happens, many Bitcoin investors are likely to be sitting on significant capital gains if they’ve stayed the course over the past year.”
“I firmly believe that the regulation and / or taxation of developed countries remains the Achilles’ heel of crypto markets,” he continued.
News of the tax hike sank stocks Thursday, dropping 321 points against the Dow Jones Industrial Average, which closed 0.9 percent to 33,815.90. The S&P 500 index ended the day down 0.9 to 4,134.98, while the tech-heavy Nasdaq Composite fell 0.9 percent to 13,818.41.
However, others see Bitcoin’s slump as a slip and part of a stock’s life cycle.
“I don’t think Biden’s tax plans will have much of an impact on Bitcoin,” Ruud Feltkamp, CEO of the automated crypto trading bot Cryptohopper, told Reuters. “Bitcoin has only been rising for a long time, it is only natural to see consolidation. Traders simply benefit from profits. “
Either way, Bitcoin appears to be seeing a 15 percent loss for the week, but it’s still up 65 percent since early 2021.