Biden's tax hike hits bitcoin

A man enters an establishment that announces the sale of bitcoins, last February in New York.JUSTIN LANE / EFE

The myth of bitcoin's invulnerability cracks.

The cryptocurrency has lived with the pandemic crisis as if it inhabited a parallel universe, hardly feeling the turbulence that has shaken the stock markets, but that resistance has staggered in recent days: its value has fallen by around 20% since the Highs of last week, when the Coinbase platform's market premiere, the first foray into Wall Street by a company in the sector, made investors think of new days of wine and roses.

The jug of cold water gained proportions this Friday, with a fall of close to 10%, and has come due to an accumulation of bad news. US President Joe Biden has announced an ambitious tax reform that will tax capital gains more heavily, which could lower margins for bitcoin owners. In addition, a massive fraud in Turkey can cause 390,000 crypto investors to lose their savings. The central bank of that same country has prohibited its use to buy and India has gone further by proposing its total ban and sanctions for those who possess these digital assets. That perfect storm has sunk the price of bitcoin to around $ 50,000 from the highs of $ 64,870, chaining seven days of falls in the last eight sessions, its worst week in two months.

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Among cryptocurrency investors there are those who downplay the decline and consider it a normal corrective for exhaustion after months of rises, and they venture that the upward cycle has not ended.

Despite the setback, bitcoin has accumulated a rise close to 70% so far this year and more than 500% in the last twelve months, records that any investor would sign and that the stock indices are far from offering.

Yet extreme volatility, underpinned by billionaires like Tesla founder Elon Musk, one of its most ardent supporters, as soon puts its holders into a state of euphoria as it raises fears of a jab of what many see as. a bubble destined to explode.

"Saving in bitcoins is like winning the lottery in slow motion," says a saying that circulates among its advocates. For the latecomers, for now, it's a painful hole in their portfolio, although looking at short-term currency developments can be misleading given the lurching.

Biden's plan wants to double the tax bill for those who earn more than one million euros in the markets, who must pay up to 39.6% of the profits. And it seems to have been the trigger for the precipitous exit of investors. The Democratic leader already let it fall at the beginning of the month that his pulse would not tremble when taking measures that could cause cold sweats in the financial mecca of the planet. “Wall Street did not build this country. The great American middle class did it, ”he said on his Twitter account. You should think the same about those who trust cryptocurrencies the growth of their bank accounts.