Bitcoin’s price plummeted below the $50,000 mark on Friday — the lowest it has been for six months.
Bulls continue to get disappointed especially since analysts remain hopeful that BTC’s bearish trend is transitory. Unfortunately, the crypto’s price fell further, reaching just $47,875. A slight bounce to $50,210 occurred ahead of New York trading before crashing again to $48,678.
The selloff came after newly-elect US President Joe Biden said that he would keep a keen eye on digital assets. He also stated that he is planning to raise ROI tax rates to higher figures compared to the average labor in the US.
The POTUS’s plan aims to charge higher tax rates on the total profits made by crypto holders, covering the duration from their time of purchase to the coin’s point of sale.
Many find this as a huge negative blow to cryptos, specifically to Bitcoin, because it means lower returns for coin owners. There is also a huge chance that the price of other digital currencies will decrease as a result of these upcoming regulatory plans.
But it’s worth noting that the only people who are going to be directly affected by this are US citizens who make huge profits from stock and crypto trading as well as real estate investments.
It also means that individuals earning above $1 million must pay more than half of their income as tax. California and New York are already practicing this as they have the highest local tax laws.
Biden also aims to bring balance to the economy as this will repurpose the additional 19.6% income of wealthy individuals with the help of the higher taxes. It’s also worth noting that these same individuals have been paying only 20% tax rates. This, however, is set to change soon.
Furthermore, there is still a possibility that this would be rejected by Congress as the legislative body is expected to be equally divided.
But even if this plan rolls out, then that would mean high-income American investors and earners will spend more to buy, sell, and hold Bitcoin and other digital coins.
Surprisingly, the plan has already dealt a negative blow to the global crypto community as the cryptocurrency market experienced an overall 11% decline over the past 24 hours. Bitcoin even fell a whopping $6,000 due to the early effects of Biden’s proposed plan.
Adding to the crypto gloom is the prediction of JP Morgan strategist Nikolaos Panigirtzoglou of a BTC crash. Panigirtzoglou fears that if the top crypto fails to reach the $60,000-mark soon, momentum signals could collapse, which could lead to a bigger drop for BTC.
Bitcoin is currently priced at $49,221 from its $55,171 value yesterday, April 22.