BIDEN TAX PLANS PUSH BITCOIN VALUE TO SAG TO LESS THAN $50,000
Bitcoin and other cryptocurrencies suffered hefty losses on Friday (Saturday, April 24, 2021, in Manila) on concern that US President Joe Biden's plan to raise capital gains taxes will curb investment in digital assets, Stanley White, Kevin Buckland, and Anna Irrera reported for Reuters.
The selloff came after reports that the Biden administration is planning a raft of proposed changes to the U.S. tax code, including a plan to nearly double taxes on capital gains to 39.6% for people earning more than $1 million. read more
Bitcoin, the biggest and most popular cryptocurrency, slumped 5% to $48,8867, falling below the $50,000 mark for the first time since early March, while smaller rivals Ether and XRP fell around 7%.
The tax plans jolted markets, prompting investors to book profits in stocks and other risk assets, which have rallied massively on hopes of a solid economic recovery. Levies on investment gains were reported to be in line with record increases.
"Bitcoin headed South today after President Biden signaled that he wanted to raise capital gains tax in the US," said Jeffrey Halley, senior market analyst, Asia Pacific, at OANDA.
"Now whether that happens or not, many bitcoin investors are probably sitting on some substantial capital gains if they stayed the course over the past year." He added: "I firmly believe that developed market regulation and/or taxation remain the crypto markets' Achilles Heel."