Taxes on Cryptocurrencies Expect Massive Liquidation

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Death Cross and Taxes over Cryptocurrencies
Death Cross and Taxes over Cryptocurrencies

 

Tax Day Incoming

CNBC reports say that Tom Lee, co-founder of Fundstart and one of the early supporters of Bitcoin, has predicted a massive liquidation of digital tokens leading to the following tax day of April 17.

Lee notes that, US households owe an estimated $25 bln in capital gains taxes due to their crypto holdings, and cryptocurrency exchanges will owe income taxes, both having to liquidate their holdings in order to pay the US government:

“We believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions. Many exchanges have net income in 2017 [of more than] $1 bln and keep working capital in BTC/ETH, not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”

Bitcoin’s Death Cross

Not much action has been seen on the market even though recent ban news from India, as we are still in a bearish trend where media continues to create FUD by labelling Bitcoin’s fall as the “Death cross” where the short-term movement average crossed below its long-term average on March 30.

Source: CNBC

Tom Lee also suggests that the we may find the bottom after April 17, where all taxes have been paid and we can get back on track to its prediction of which Bitcoin would hit $25,000 by 2018 and $91,000 by March 2020.

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