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    Bitcoin pulls back below $50,000 as US President Biden’s tax plan stings cryptocurrencies

    Bitcoin pulls back below $50,000 as US President Biden’s tax plan stings cryptocurrencies

    Bitcoin pulls back below $50,000 as US President Biden’s tax plan stings cryptocurrencies
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    By Yashi Gupta   IST (Updated)

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    Bitcoin has fallen beneath the $50,000 “a psychological support line”, hitting its lowest point in nearly 50 days. This comes amid speculations that US President Joe Biden’s plan to raise capital gains tax may curb investment in digital assets.

    Cryptocurrencies pulled back sharply on Friday amid speculations that US President Joe Biden’s plan to raise capital gains tax may curb investment in digital assets. Bitcoin has fallen beneath the $50,000 “a psychological support line”, hitting its lowest point in nearly 50 days.
    "The cryptocurrency came under fresh pressure on the Biden tax headlines," Deutsche Bank's Jim Reid wrote in a note to clients. Biden on Thursday unveiled a raft of proposed changes to the US tax codes, including a plan to nearly double taxes on capital gains to 39.6 percent for people earning more than $1 million.
    At around 14:05 IST, Bitcoin, the world’s largest cryptocurrency, was nearly 11 percent down in the last 24 hours at $48,594. It is on track for a 22 percent-plus decline this week, after surging nearly 74 percent year-to-date.
    Ether, which has massively outperformed Bitcoin this year, fell over 11 percent to $2,191. If Ether manages to hold above $1,955 going into the weekend, then its upward trend should remain intact, Kelvin Wong of CMC Markets told Reuters.
    XRP, the fifth-biggest cryptocurrency lost over 22 percent, according to data from Coinmarketcap.
    Despite the numbers, though, analysts say we are still in a long-term bull market.
    “On-chain data suggests we’re still in a long-term bull market. In the short-term, we might have a correction and going sideways in a broad range since the market is over-heated among retail investors,” Ki-Young Ju, CEO of a South-Korea-based blockchain analytics firm told CoinDesk.
    Biden’s plan to raise capital gains tax also caused turmoil on Wall Street as the stocks ended lower Thursday. The S&P 500, DJIA, and Nasdaq lost 0.9 percent each. The turmoil also spilt into the Asian sessions as major stock indices opened in the red. But the traders expect calm to return soon.
    The traders started offloading Bitcoin aggressively on the backs of Biden’s tax plan. But ultimately, news-based selling generally reverses, Avi Felman of BlockTower Capital told Reuters.
    Top cryptocurrencies that make up lion’s share of markets across various exchanges plunged following the news.
    With inputs from Reuters
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