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Bitcoin Tumbles as Tax Filing Deadline Looms

Bitcoin has lost by more than 52 percent in price this year alone without considering the high of $20,000 in December last year. Other cryptocurrencies are also following this trend with no signs of improvement in the short run.     

Bitcoin fell to $6,646.07 as of 3:49 p.m. ET Monday moments after a slight price increase to the $7,000 level even as April 17 tax filing deadline approached.

U.S. households owe $25 billion in capital gains taxes for Bitcoin holdings according to a head of research at Fundstrat Global Advisors Thomas Lee. Some investors are therefore selling Bitcoins in order to meet their tax liability. This means a huge sell into U.S. dollars.

Bitcoin was selling at $6,731 at the time of writing.

The cryptocurrency was selling at the $6,000 level on Friday and Saturday before a slight recovery Sunday and Monday before the tumble. However, most of the tumble this year is due to uncertainty on the side of regulators. So far, cryptocurrency markets lost about half of their market capitalization.

Bitcoin price is itself down by more than 52 percent this year and 27 percent in the last month alone. It was trading at a high of $20,000 in mid-December and above $14,000. Bitcoin started dropping below $10,000 in March after SEC announcement. It is that online trading platforms are securities and need to register with the agency.

SEC is also pursuing crackdowns on ICOs and last week charged two founders of a cryptocurrency firm. However, it is endorsed by boxer Floyd Mayweather for fraud.

Right now, the market is in price-discovery mode until clarity is with investors about the regulations according to BlockTower Capital CIO Ari Paul. Regulation uncertainty is the main dominant influence of sell-off right now.

Other cryptocurrencies as well

Not just Bitcoin, but also other cryptocurrencies went down in the last few months since the massive increases at the end of last year. The top ten cryptocurrencies reported an uptick in prices last week. Although with some recording as high as 10 percent increase.

How long will regulations continue to affect Bitcoin prices? Share with us on Twitter and Telegram.

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David

David Kariuki is a journalist who has a wide range of experience reporting about modern technology solutions including cryptocurrencies. A graduate of Kenya's Moi University, he also writes for Hypergrid Business, Cryptomorrow, and Cleanleap, and has previously worked for Resources Quarterly and Construction Review magazines.

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