Proposed U.S. tax code drags Bitcoin and Ethereum down

Bitcoin (BTC) and Ethereum (ETH), considered the heavyweights of cryptocurrencies, have experienced significant drops amid speculations the administration of U.S. President Joe Biden will increase capital gains taxes.

A Reuters report cited by Blockchain.news said that “the drops came after Biden unveiled a raft of proposed changes to the U.S. tax code, including a plan to nearly double taxes on capital gains to $39.6% for people earning more than $1 million.”

Subsequently, BTC began hanging around the $48K mark after plummeting to the $47K level while ETH came to the point of trading at just more than $2,100.

Bitcoin and Ethereum bull runs

In the past days, both BTC and ETH enjoyed bullish runs. As a matter of fact, Bitcoin’s market capitalization punched through the $1 trillion mark.

On the other hand, a notable Ethereum development is settling a whooping 1.5 trillion transactions in just the first quarter this year, eclipsing the 1.3 trillion transactions it settled for the whole of 2020.

The tremendous surge in the number of transactions can be attributed to the fact that more people are hopping into the Ethereum bandwagon.

Recently, WeWork, a commercial real estate company in U.S. that provides flexible shared workplaces, partnered with Coinbase and BitPay in accepting Bitcoin, Ethereum, USD Coin, and Paxos as a form of payment.

Temporary setback

While the drops experienced by the largest and second-largest cryptocurrencies have caused worries and panic, these are just temporary, at least according to some traders and even analysts.

They believe that the growing appetite from institutional and retail investors for digital assets signifies continued acceptance of virtual currencies and their market.

A perfect example of this is the move of leading business intelligence firm MicroStrategy, which spent $10 million to purchase additional 205 Bitcoins. The company’s Bitcoin portfolio has now grown to 91,064 BTC.

 

Image courtesy of CNBC/YouTube Screenshot

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