Nick Spanos, co-founder of Zap.org, has said he is expecting Bitcoin and other digital currencies to experience losses over the coming days due to US President Joe Biden’s plan to increase capital gains taxes.
Numerous cryptocurrencies recorded hefty losses on Friday due to concerns that this tax increase could reduce investor inflows into the crypto market.
For instance, Bitcoin, the world’s most popular cryptocurrency, slumped to $47,555, falling below the $50,000 mark for the first time since early March.
Commenting on the latest movements in the crypto market, Spanos said: “With a high growth rate in the bitcoin price, crypto holders that have accrued gains will be subjected to this tax increment.”
He added that he believes many cryptocurrencies will extend their losses over the next few days.
However, not everyone agrees that Biden’s tax hike will hurt the crypto market. For instance, Ruud Feltkamp, CEO at automated crypto trading bot Cryptohopper, said he believes that the recent fall in Bitcoin’s price is merely due to traders cashing in on their gains.
“I don’t think Biden’s taxes plans will have a big impact on bitcoin,” he said.
“Bitcoin has only gone up for a long time, it is only natural to see a consolidation. Traders are simply cashing in on winnings.”
Others were also bullish on the future of crypto despite the price fall.
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“Investors will see the price drop across the crypto market as an opportunity to widen their portfolio by averaging up their investment outlay and buying new altcoins,” said Don Guo, chief executive officer at Broctagon Fintech Group.