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The reason for the dramatic fall of Bitcoin and other cryptocurrencies is named

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Bitcoin and other cryptocurrencies fell sharply on Friday, and later Reuetrs said what was the reason. Cryptocurrency holders are concerned that US President Joe Baiden’s plan to raise capital gains taxes will limit investment in digital assets.

This week, the Biden administration announced a number 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.

Bitcoin, the largest and most popular cryptocurrency, fell to $ 47,555, dropping below $ 50,000 for the first time since early March. At the time of publication of this note, the exchange rate was $ 49,799.

Ether and XRP were down 3.5% and 6.7%, respectively, while dogecoin, which is up about 8,000% this year, fell 20% to $ 0.21, according to data from CoinGecko. The tax plans shook the markets, prompting investors to take profits in stocks and other risky assets that rallied significantly in hopes of a lasting economic recovery.

“With the high rate of growth in the price of Bitcoin, cryptocurrency holders who have accumulated profits will be taxed,” said Nick Spanos, founder of Bitcoin Center NYC. He believes that the Bitcoin rate will fall even more in the coming days.

Bitcoin fell 11.3% in a week, the worst weekly reading since late February. However, on an annualized basis, it grew by 72%.

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