Cryptocurrencys losses exceeded $ 200 billion
Cryptocurrencys losses exceeded $ 200 billion

Bitcoin and other cryptocurrencies plunged on Friday when US President Biden proposed an increase in the capital gains tax to start a sale.

Bitcoin fell 7.3% to $ 49,730, according to Coin metrics.

This is the first time that Bitcoin has been trading for less than $ 50,000 since early March.

Ethereum slipped 8% to $ 2,320, and XRP, the fifth-largest cryptocurrency, was down 16%.

According to data from CoinMarketCap, this drop has suppressed the entire cryptocurrency market with a value of over $ 200 billion.

President Biden is expected to raise the long-term capital gains tax for the richest Americans to 43.4%.

This is higher than the highest federal income tax rate.

The new tax rate applies to income from assets in taxable accounts sold after more than a year.

This resulted in a sell-off in the equity markets, as all three of the major US stock indices closed lower on Thursday.

Analysts said, "Concerns about Biden's proposal could spread to cryptocurrency investors who have spent a significant year and their bitcoin price has increased more than six-fold in the past twelve months."

In 2021 alone, Bitcoin is up 66% while Ethereum is up over 200%, thanks in part to Bitcoin purchases by institutional investors.

Companies like Tesla and Square have also bought billions of dollars in Bitcoin.

The bank is also trying to attract its customers to the Bitcoin market. Morgan Stanley said in March that he had started using three funds to own Bitcoin.

Analysts say that the more funds that reach the market, the lower the volatility and stability of the deal. For investors, the strategy is always to not put everything in one basket in order to diversify your wealth.

Concerns about the regulatory cancellation of Bitcoin continue to cast a shadow over the market, and official organizations around the world are investigating how digital currencies are regulated.

Reuters reported last month that India plans to pass a law banning the trading and even possession of cryptocurrencies.

In February, the US Treasury Secretary designated Bitcoin a highly speculative asset and said it was concerned about potential losses for investors.

The deputy governor of the People's Bank of China last week described Bitcoin as an investment alternative that marked a major shift in cryptocurrency after the country launched a crackdown on the financial sector in 2017 and 2018.

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