Bitcoin Price Taking A Dive With Altcoins, Why Biden’s Tax Hike Matters?

Press Release

Bitcoin fell below $50,000 per coin for the first time since March 8, reminding many people of the “flash crash” of the last bull market. Bitcoin has been retracing for the past week, and the cryptocurrency market’s nosedive today is believed to be associated with the news that US President Biden plans to double the capital gains tax on the wealthiest Americans, to 39.6% from the current 20%. On the announcement of this news, major stock markets dropped nearly 1% on average. Bitcoin has benefited from U.S. record budget deficits amid the COVID-19, with people taking a hedge in Bitcoin ...

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Bitcoin Price Taking A Dive With Altcoins, Why Biden’s Tax Hike Matters?

Bitcoin fell below $50,000 per coin for the first time since March 8, reminding many people of the “flash crash” of the last bull market. Bitcoin has been retracing for the past week, and the cryptocurrency market’s nosedive today is believed to be associated with the news that US President Biden plans to double the capital gains tax on the wealthiest Americans, to 39.6% from the current 20%. On the announcement of this news, major stock markets dropped nearly 1% on average.

Bitcoin has benefited from U.S. record budget deficits amid the COVID-19, with people taking a hedge in Bitcoin in fear of inflation. However, tax increases in the corporate tax rate and the individual rate for high earners may put a damper on investments, and could also slow down economic recovery.

Bitcoin’s price has increased five times since last year. Under the new tax proposal, if the rich hold the cryptocurrency for more than a year, they will have to pay capital gains tax when they sell it. As a result, investors may choose to take profit or turn on the “risk-off” mode.

Bitcoin continues to fall in the past week due to the lack of momentum. Its market dominance sinks below 50% for the first time since 2018. Altcoins, especially the Doge, are believed to suck the money that could have flowed into Bitcoin. Although $50K has been a popular buy-in area for bulls, not many decide to make a move now, as the market is closely watching Friday’s options expiry. The now neutral-to-bearish options may determine where we will go in the next few weeks.

No matter which direction the market goes, there are a variety of tools to make profit and hedge risks.

Hodl For Dear Life

You might want to continue to hodl your BTC and wait for a clear signal. Besides storing your coins in a cold wallet, you could consider storing your BTC into an interest-bearing wallet, where your deposit could gain up to a 21% annualized interest rate.

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Jonathan Gibson

About the Author

Jonathan is an experienced editor-in-chief and crypto writer, with over seven years in the field. His work focuses on in-depth research and clear, informative reporting on cryptocurrency topics, positioning him as a knowledgeable figure in the industry.