Financemagnates.com reported that crypto holders collectively owe $25 billion in taxes. As per the reports released by Fundstrat Global Advisers people who own cryptocurrencies are liable to pay $25 billion in the form of taxes. The added pressure has forced holders to sell off their assets. Market experts believe that crypto values will drop down until April 15, 2018, the last date for filing taxes in America.
Thomas Lee, Co-founder Fundstrat & Head of Research, said, “We believe selling pressures (in crypto) have been amplified by capital gains tax-related selling this year.” The organization used 20 percent of the $168 billion capital gains earned through the 2017 crypto boom.
Fundstrat also said that a massive amount of tax payment would be due to cryptocurrency changes come this April 15. These exchanges had a huge profit due to bitcoin’s meteoric rise. Coinbase recently reported that last year it made a net profit of more than $1 billion. In order to pay the bills, crypto exchanges are expected to sell some of their crypto assets.
Although Fundstrat has come up with bearish predictions till the last day of tax filing, yet it believes that bitcoin will surge by the end of 2018. It notably stated that BTC would rise to $20,000 mark by the middle of the year.
The news has received mixed reactions from bitcoin holders who have struggled since the advent of 2018. The popular digital currency has lost more than half of its value after around $20,000 in December 2017.
On the other hand, news was reported by Richmond-news.com. It stated that RCMP, The Royal Canadian Mounted Police, has warned domestic crypto holders about tax scams. According to the police, a citizen of North Vancouver lost $6,000 in a bitcoin tax fraud.
Dennis Huang, Media Liaison Officer Richmond RCMP said, “If some type of punitive action is threatened before payment is demanded, it is likely a scam.” The news is important for American citizens as criminals could use the reference to the actual Tax filing date to receive large amounts of bitcoin. Due to the inability to track transactions, nobody would be able to catch the fraudsters.
According to the news in newsbtc.com, Thomas Lee said, “This is a massive outflow from crypto to dollars… Historical estimates are each $1 of USD outflow is $20-$25 impacts on crypto market value.”
Even after speculating a future growth pattern for bitcoin he still considers other factors that can disrupt its inevitable rise. He stated, “Regulatory headline risk is still substantial… And sentiment remains awful, as measured by our bitcoin misery index, which is still reading misery.”
The Wall Street veteran is still backing up his mid-year predictions for bitcoin. It should be noted that Lee’s forecast first came out in January and the crypto market has been through a lot of change since then. If he is to be believed, then bitcoin will again reach tremendous height with other coins of smaller value. As of now, the downshift is prevalent, and investors are losing their funds.