It appears, even more so after Biden’s comments, that Crypto is very sensitive to actual capital gain rates and even comments about capital gain rates. This sensitivity comes from the fact that many investors and institutions are using the volatility of crypto to take out quick gains. Taxes have become a real concern with Crypto, as there are many completely new variables with it, that are stumping the tax system. Just because the IRS considers Bitcoin an asset, doesn’t mean they are prepared, capable, or even smart enough to regulate and tax it properly or fairly.
Just my opinion, but, just the fact there is a concern from the Crypto world because Biden comments on capital gains, seems to show that institutional investors are already deeply into the crypto world, and worse, don’t understand it. Ironically, this lack of understanding, may be the reason his comments had such an impact on the Crypto world this week. If these new large investors are in over their heads they may welcome intervention from the federal government in what they think will stabilize the Crypto market, and by stabilize, I mean make it safer for them and other wealthy people coming into the game.
Now, I may be reading more into Biden making some comments about doubling the tax rate on capital gains and Bitcoin dropping, but, when Billionaire investors get involved with something, their control of the markets and politicians will be coming with them.
Since I am not one of those Billionaires, here is a quote on the subject form Jeffrey Halley, senior market analyst from Oanda:
“It is clear that bitcoin is more sensitive to capital gains tax threats than most ‘asset’ classes. The threat of regulation, either directly in developed markets or indirectly via the taxman, has always been crypto’s Achilles’ heel, in my opinion,”
But, then again, he followed it with this babbling, which proves the point, the rich guys may be looking for some help from Uncle Joe:
Halley predicted that the next level bitcoin could fall to is $42,000, which “might come this weekend, or next week or perhaps not at all.”
