Bitcoin and other digital currencies plummeted overnight, erasing $ 260 billion from market value. Bitcoin has dropped 10% compared to 24 hours earlier, and Ethereum 11%. Xrp, the fifth most popular cryptocurrency in the world, has lost up to 22%. The reasons for the sharp decline are unclear, although the market for these virtual currencies is known for its wide swings. At the moment Bitcoin drops 9.18% to $ 48,050, Ethereum is -14% to $ 2,158 and Xrp leaves 20.75% at $ 1.03 on the ground. Litecoin also fell with -18.2% to 222.56 dollars.
According to traders, it could be a retracement before a fresh start to the upside. But it is not excluded that the news that US President Joe Biden is thinking of raising taxes on capital gains weighed not only on the US stock market yesterday, but also on typically risky assets such as digital currencies. Biden will propose a maximum federal tax on capital gains of 43.4%, according to the Bloomberg website, up from the current 23.8%.
Furthermore, as MF-Milano Finanza wrote , after the ban on cryptocurrency payments ordered last week by the Central Bank of Turkey, yesterday Faruk Faith Ozer blocked the exchanges on Thodex, the Turkish cryptocurrency exchange of which he is ceo and then it became untraceable. In 2021 alone, Bitcoin rose by 71%, Ethereum by 200%, also thanks to purchases by institutional investors, such as Tesla and Square, who bought bitcoin for billions of dollars.
However, fears of a forthcoming regulatory intervention by governments continue to grow on the market. India thinks of a law to ban trading or even possession of cryptocurrencies and in February, US Treasury Secretary Janet Yellen called Bitcoin “a highly speculative asset” expressing concern about potential losses for investors.