Both Ether and Bitcoin have registered drops following speculations that US President Joe Biden has a plan to raise capital gains taxes, which could affect digital asset investment. The plan was revealed yesterday and includes a decision to almost double taxes on capital gains to 39.6% for those who earn over $1 million.
Social media went nuts about how this could hurt crypto, and investors got scared about possible losses. But analysts believe that any decline could simply be temporary as a result of increased retail and institutional investor acceptance of digital currencies as a true asset class.
The head of research at Pepperstone Markets Ltd, a Melbourne-based foreign exchange broker, commented on the tax plan saying that “That’s what everyone is talking about now. And I think you may have some technical selling going through. Ether’s been the poster child of movement. It has massively outperformed Bitcoin.”
Indeed, Ether recorded a drop of over 10% to $2,140, a day after it reached an ATH of $2,645. Meanwhile, Bitcoin fell 3.62% to $49,824.97.