Bitcoin (BTC) plunged on Friday (23) to below $ 50,000, reaching its lowest price in almost two months. With it, other cryptocurrencies also suffered strong devaluations driven by the proposal to increase taxes on capital gains from the United States government.
The cryptocurrency was traded for a minimum of $ 47,467 this morning, accumulating a 16% drop from yesterday to today, according to the index CoinDesk. This is its lowest price since the first week of March.
US tax hike sparks sales surge
This great devaluation today comes after the President of the United States, Joe Biden, announced that he should increase taxation on long-term capital gains targeting the wealthiest portion of the American population. The new rate can reach 43.4% with surcharges, which would be higher than the income tax in the country.
The new rate is applicable to all returns on assets held in taxable accounts and capitalized after more than one year of investment. Thus, the rate also covers cryptocurrencies such as bitcoin, making those who are accumulating the cryptocurrency for long periods pay large amounts to the American government when making the sale.
As a result, several American investors, especially the wealthiest, sold their bitcoins and other crypto to avoid further taxation. As a result, prices for almost all digital currencies on the market plummeted on Friday.
Ether, XRP and dogecoin fall
Other cryptocurrencies in the top ten have also suffered severe declines. The ether (ETH), native to the Ethereum blockchain and the second largest digital currency by market value, fell more than 20% this morning after setting a new record on Thursday. Today, its price was negotiated at $ 2,107.
Ripple (XRP), however, fell below $ 1 after the Biden government’s announcement. Yesterday, the cryptocurrency was trading for around $ 1.4, while today its price has plummeted to $ 0.89. Even dogecoin (DOGE), a digital meme currency and adored by Elon Musk and other celebrities, suffered a devaluation of almost 50% in less than 24 hours.
Cryptocurrency market loses 300 billion
According to CoinMarketCap, all cryptocurrencies together capitalized approximately $ 2.05 trillion on Thursday. After today’s intense sales, the entire industry lost more than $ 300 billion in market value, the lowest in almost a month.
The stock market in the United States also suffered a strong devaluation with the intense sales of assets. The top three indices on the American stock exchanges ended Thursday in the red and are operating today in decline.
Pressure from regulators worries investors
Cryptocurrencies are now a central concern of regulators around the world. While India has already launched new regulations for bitcoin and other digital currencies, the Indian central bank is still threatening to lift bans and possible bans.
Turkey announced last week that it will ban payments with cryptocurrencies in an attempt to regain the monetary control it lost due to the strong devaluation of the national currency. Driven by the news, the price of bitcoin fell 6% at the time.
The American government had already signaled throughout the beginning of the year that it sees a strong need to regulate cryptocurrencies in the country. U.S. Treasury Secretary Janet Yellen characterized bitcoin as a “highly speculative asset” and said she was concerned about potential losses among investors.
Now, the United States is taking an indirect step in taxing cryptocurrencies, which has already made the entire market go into despair. However, US officials have signaled that more regulations focusing on taxation are being discussed in the near future.
With information: CNBC