The cryptocurrency industry is riding low with the rest of the global stock market as the fears of an increase in the Capital Gains Tax offsets the market. Major media outfits have reported that US President, Joe Biden is set to formally propose the tax hike from its initial 20% to about 40%.
In reaction, the global crypto market has gone on a freefall with Bitcoin (BTC), the world’s largest digital currency by market cap shedding as much as 8.80% of its value to be exchanging hands at $49,737.22 according to CoinMarketCap.
Ethereum (ETH) is down 9.89% to $2,324.37 erasing the gains accrued yesterday, while Binance Coin (BNB), XRP (XRP), and Cardano (ADA) amongst others dropping 12.06%, 16.49%, and 10.83% respectively. The massive losses have erased about $4 billion from the global crypto market capitalization which is down 10.58% to $1.84 trillion.
Investors Need to Come to Terms with the New Tax Rate in Advance
Despite the plunge, the digital currency ecosystem is still the market niche that features the highest-yielding asset classes. Over the past year, the major digital currencies including Bitcoin, Ethereum, and the Binance Coin have outperformed every form of institutional-grade assets.
While Bitcoin has surged by over 600% in the past at its current price levels which is below its all-time high price above $64,800, the coin is still up by 600% year to date. Ethereum has even outperformed Bitcoin in the same time frame, surging by over 1,174% while Binance Coin has gained over 3132% in the year-to-date period.
With more accrued gains over the past year, so also is the chunk in the tax that is expected to be paid. Based on this, investors may need to come to terms with the new tax rate if the proposal is not suppressed the US lawmakers. This is essential for the market to rebound, and return everyone back to winning ways.
