Bitcoin falls below $50,000 as Biden tax plans spark crypto sell-off

Crypto markets pulled back sharply after reports US president Joe Biden is planning to raise capital gains tax for the wealthy.

Bloomberg reported on Thursday that Biden is considering nearly doubling tax to as high as 39.6%, an increase from the current 20%. Cryptocurrency investors face higher taxes if Biden presses ahead.

Bitcoin (BTC-USD) crashed 10% to $49,332 (£68,482) on Friday morning in London, Ethereum (ETH-USD) slumped 11% to $2,227 after hitting record highs of £2,613 on Thursday.

Dogecoin’s (DOGE) price continues its downward spiral after a few days of gains, slumping as much as 28%, it is currently trading 26% lower. XRP plummeted 20%.

Meanwhile, Coinbase (COIN) struggled to stage a rebound in New York overnight, pushing 6% lower for the fourth consecutive day.

The sell-off comes after the Deutsche Boerse (DB1.DE) said that it would delist the crypto exchange platform from the Xetra trading system and the Frankfurt Stock Exchange due to an error identified in the reference code.

While the Boerse has since backtracked on the decision, keeping Coinbase listed, it failed to trigger a recovery in its stock price.

“The Biden administration is looking to raise the top marginal income tax rate to 39.6% from 37%, whilst also doubling capital gains tax to 39.6% for people earning more than $1m. Tax the rich, hand it out to the poor. Sounds like furlough, but on a permanent basis,” Neil Wilson, chief markets analyst at Markets.com said.

Last weekend, Bitcoin experienced a similar massive sell-off, shedding almost 15% in 24 hours — the biggest intraday drop since February.

The drop appeared to coincide with reports that the US Treasury is planning to tackle financial institutions for money laundering carried out through digital assets.

Source: Yahoo Finance

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