The flagship cryptocurrency BTC sinks below $50,000 despite the recent surge over the past few months so let’s read more in our latest bitcoin news.
Bitcoin’s price has dropped below $50K while some in the industry believe that the price drop could be explained by the recently proposed capital gains tax increase by President Biden. The flagship cryptocurrency sinks to $48,000 which is the first time since March 7, 2021. According to CoinGecko, BTC dropped by 10% in the past day and by 24% in the past week. Other coins fared even worse with XRP dropping 17.6% in the past day and Uniswap dropping by 14.3%. Charles Storry who is the head of growth at DeFi Index provider Phuture said:
“There is a lot of new capital that has entered the market, some investors are still on edge and unverified negative news can cause a lot of short-term damage. That is what we are seeing.”
Today’s price crash sees BTC sink by 33% from its current all-time high to a price of $64,445 according to the data by CoinGecko. One of the reasons why Bitcoin’s price could be crashing is because of the fears around the increase in capital gains tax because under the new tax law selling cryptocurrency will trigger a taxable event and the US taxpayers will have to pay tax on profits or losses.
However, the crash wiped about $170 million from the crypto market and some think that Biden’s tax proposals could benefit BTC in the long run. The co-founder and managing partner of Nexo Antoni Trenchev said:
“President Biden could be doing crypto—and especially crypto lending businesses like ours—a favour.”
Trenchev added that the best choice for all BTC users that want to manage their finances will be to borrow against the things you own or things you plan to buy and avoid capital gains taxes:
“What better collateral than one that—despite today’s price dip, likely caused by the said proposal—appreciates in value like Bitcoin?”
Despite the crashing price, the concerns remain high about the cryptocurrency because of the surges in transaction fees. Some believe that these increases happened due to the power outages in Northern China as the most important region for btc mining.
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