Friday 23 April 2021
Biden causes a wave of sales
Cryptocurrencies are rushing down
For weeks, the price of cryptocurrencies only knew one direction: up. But now it’s down. That is also due to US President Joe Biden.
The planned increase in capital gains taxes in the US has triggered a price slide in cryptocurrencies. Bitcoin temporarily fell a good six percent to a seven-week low of 48,357 US dollars, and the number two cyber currency, Ethereum, lost a good twelve percent to 2,115 US dollars. The day before it had reached a record high of $ 2,645.75.
US President Joe Biden wants to propose to Congress to roughly double capital gains taxes. That could reduce the attractiveness of cryptocurrencies as an investment. Some funds had responded to the news with aggressive sales, said Avi Felman, chief trader at cryptocurrency specialist Blocktower.
In the case of Ethereum in particular, the price losses are, to a not inconsiderable extent, a reaction to previous price gains, said Chris Weston, chief analyst at the brokerage house Pepperstone. “It has developed well above average compared to Bitcoin.” Since the beginning of the year, Ethereum has grown almost 230 percent, almost four times as strong as Bitcoin. The MSCI world share index only gained just under five percent in the same period.
Bitcoin goes on a roller coaster
Bitcoin has been under pressure for a few days – among other things because of reports that the United States is cracking down on the use of digital currencies for money laundering. Since the record high of just under $ 65,000 reached in mid-April, the minus adds up to almost a quarter.
Despite the recent losses, Bitcoin is still clearly in positive territory in the medium and long term. Since the end of 2020, the increase has been 70 percent. Over the year the plus is more than 500 percent and in the past five years the price has increased by more than 10,000 percent. For some time, however, a shift from Bitcoin to other Internet currencies such as Ethereum, Binance, Tether or XRP has been observed among the many cryptocurrencies.
According to a list by Coinmarketcap.com, Bitcoin’s share of digital currencies, measured by market capitalization, is only a little more than 50 percent. At the beginning of the year it was almost 70 percent.
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