Bitcoin Plunges 8% to Trade Below $50,000; US President Proposal On Tax Weighs On Bitcoin

Business

oi-Sneha Kulkarni

By Sneha Kulkarni

Published: Friday, April 23, 2021, 11:12 [IST]

Bitcoin has dropped below the psychological support line of $50,000, reaching its lowest point in 48 days. On April 23, Bitcoin took a hit after US President Joe Biden was reported to have proposed nearly doubling the capital gains tax for the rich.

According to CoinDesk's bitcoin price page, prices are currently floating about $49,200, reflecting an 8% decline or loss of around $4,300 over the previous 24-hours. At the time of press, Bitcoin was seen trading at $49,554, lower by 8.98%

After a false tweet from an anonymous Twitter account that the US Treasury was cracking down on crypto money laundering, the coin dropped as much as 15% over the weekend. Bitcoin is on track to end the week with its biggest weekly decline since February, when prices dropped 21% before bouncing back to all-time highs near $64,900.

According to sources familiar with the initiative, Biden would unveil a plan to raise taxes on the richest Americans, including the largest-ever rise in levies on investment gains, to finance around $1 trillion in childcare, universal pre-kindergarten education, and paid leave for jobs.

However, the coin has been one of the best-performing assets in recent years, with investors who purchased a year ago seeing a 625 percent return. This represents an 860 percent benefit for investors who purchased in April 2019.

The Internal Revenue Service (IRS) has increased its regulation of tax collection on cryptocurrency transactions. The IRS now asks taxpayers if they "paid, sold, shipped, traded, or otherwise gained any financial interest in any digital currency" on their 2019 individual tax returns, which is the first time the agency has done so.

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