Bitcoin and other digital currencies fell on April 23 as a proposed capital gains tax hike from U.S. President Joe Biden spurred a wave of selling.
According to Coin Metrics data, on Friday, the dominant cryptocurrency, Bitcoin, was down more than 8% in the last 24 hours at $48,687. It’s the first time BTC has traded below $50,000 since early March. Meanwhile, the world’s second-largest cryptocurrency in the world, Ether, dipped to $2,211, down more than 12%. XRP, the fifth-biggest cryptocurrency, fell almost 19%.
Bitcoin is on track to close out its biggest weekly decline since February when prices dropped 21% before making a sharp recovery and breaking to lifetime highs close to $64,900.
According to data from CoinMarketCap, this wiped out over $200 billion of value from the entire cryptocurrency market.
In 2021 bitcoin has increased by 66%, while ether gained 200%
U.S. President Joe Biden is likely to raise long-term capital gains tax for the wealthiest Americans to 43.4%, including a surtax. Significantly, that would be higher than the top federal tax rate on wage income. The new tax rate would apply to returns on assets held in taxable accounts and sold after more than a year.
This triggered a sell-off in stock markets overnight, with all three major U.S. indexes ending Thursday’s session in the red. According to analysts, fears over Biden’s capital gains tax proposal may be extending to crypto investors, who have had a great year as the price of bitcoin surged more than sixfold in the last 12 months.
In 2021, the dominant cryptocurrency, bitcoin, has increased by 66%. Meanwhile, ether, the digital token of the Ethereum blockchain, has risen by more than 200%.
Additionally, it’s essential to mention that part of that support has been because of boosted buying of bitcoin by institutional investors. Furthermore, its rally was spurred as firms such as Tesla and Square have bought billions of dollars worth of bitcoin too.