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Bitcoin prices dropped drastically – here’s why

New tax proposals could be behind the sell-off.

bitcoin cryptocurrency on table
Image: Unsplash

Bitcoin has seen some tremendous growth in 2021, but as it is known to do, the price is currently at a low point. Last week, Bitcoin prices were bouncing around the $64,000 mark and this morning, the price was down to approximately $48,600.

To show how volatile the cryptocurrency is, now, an hour later, the price is up almost $1,000, back to approximately $49,200. I wonder what it will be by the time I finish typing up this article?

So, why the sudden price drop? According to Reuters, the drop of both Bitcoin and Ethereum probably has something to do with new tax plans proposed by the Biden administration. Essentially, this new tax plan, if it goes into effect, would almost double the capital gains tax for those that make over $1 million to 39.6%.

It is assumed that a bunch of people that have millions invested in Bitcoin and Ethereum are selling off their assets to secure the money before the tax plan goes into effect.

That said, people that spoke with Reuters believe that the drastic sell-offs will be temporary and that prices should go back to an upwards trend through the weekend and into next week.

Regardless, this is yet another reminder that in their current form, cryptocurrencies like Bitcoin are still extremely volatile and shouldn’t be considered any type of real currency. Oh, and the price now? $49,469.

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Former KnowTechie editor.

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