- How are cryptocurrencies faring in the wake of proposed tax hikes from Biden’s ARP?
- Janet Yellen rumored to enforce a new tax rate on cryptocurrencies
The cryptocurrency market is inherently volatile. Last Friday, after the White House released news of Biden’s proposed capital gains tax, Bitcoin saw its lowest value since March, tumbling nearly 10% to around $49,000, from its high the previous day of $55,171.60.
The drop in the currency’s value is but another nasty side effect of the proposed capital gains tax hike, courtesy of Biden’s American Families Plan.
Not only does the President plan to raise the tax rate on long-term capital gains—reaching a potential maximum rate of 34.4%—but rumors in Washington say that the Treasury Secretary, Janet Yellen, has her sights set on implementing and enforcing a cryptocurrency tax rate of 80%.
Tax on Crypto?
While there’s no official confirmation of Yellen’s plans to levy a new tax on cryptocurrencies, the rumor was enough to scare some investors to sell off this week. Senior Market Analyst at OANDA, said of the proposed tax: “I firmly believe that developed market regulation and/or taxation remain the crypto markets’ Achilles Heel.”
Others are less worried and believe that last week’s drop in value is but a minor lapse in the continued overall growth of the currency. “I don’t think Biden’s tax plans will have a big impact on bitcoin,” Ruud Feltkamp, CEO at Cryptohopper told Reuters.
What Does the Future Hold?
Lingering questions remain for investors in this time of uncertainty: What do I do now? Is it smart to hold? Or should I sell off now before these proposals turn into reality?
Call DSJCPA at 516-541-6549 for answers and visit our website for more information and updates.