It seems that every month there is a new regulatory problem that affects Bitcoin negatively. The Reserve Bank of India is ending its relationship with banks, companies and any user who has anything to do with crypto currencies. In addition, taxes must be paid on crypto assets in the US.
Bitcoin code – what’s going on now?
The Bitcoin code on the stock markets has fallen by more than 25 percent compared to last month. There are many reasons for this sustained Bitcoin code correction. The main reason is currently the US tax season.
The tax season in the USA is considered the trigger for this week’s sellout. Tom Lee, head of research at Fundstrat Global Advisors, said US households are likely to owe over $25 billion in capital gains taxes on crypto assets to the Treasury. The US tax deadline is April 17th, which has led to quite strong selling pressure in recent days. Investors have to sell their crypto inventories to pay taxes, so the market naturally has to accept losses.
Bitcoin has fallen more than 70 percent since its all-time high of just under $20,000 in mid-December last year. The total crypto market corrected from a market capitalization of almost 900 billion dollars to about 250 billion dollars.
As already mentioned, the Reserve Bank of India announced last week that regulated financial institutions (banks) are no longer allowed to legally handle crypto currencies.
Crypto currencies were originally created to disrupt centralized banking and state control over a currency. It seems that governments and major banks are beginning to feel disturbed by crypto currencies.
A ray of hope on the Bitcoin profit
ETFs may be authorised to place large amounts of Bitcoin profit in the markets. The remaining months in 2018 will be those of Bitcoin profit. Governments, institutions and central banks will draw up a regulation on how to deal with crypto currencies. The question will also be to what extent the new data protection regulation will affect Bitcoin & Co.
Despite the forthcoming regulations, one should not be pessimistic. Traditional investors such as Soros, Rockefeller and Rothschild want to enter the Bitcoin business. Once the regulatory phase is over, huge capital will flow into the market, as traditional investors will not have to worry about state sanctions.