Tom Lee, the Head of Research at Fundstrat Global Advisors predicted that the selling pressure in the cryptocurrency market might stop falling uncontrollably by mid-April. Reports say that the major reason behind the falling prices is the approaching income tax filing date. Every year April 15th is considered to be the Tax Day in the United States, however, this year it falls on 17th due to the upcoming holidays in the U.S.
According to Lee, the drop in cryptocurrency price is due to the investors who are trying to sell off their digital assets to avoid paying taxes on them. Bitcoin investors owe almost $25 billion worth US taxes. Apparently, the Internal Revenue Service is also planning to collect taxes on the cryptocurrency gains.
Tom Lee says :
The IRS cares so much about collecting crypto taxes since the $25 billion will be representing 20% of capital gain tax receipts to Treasury.
Further, he mentioned that the total receipts for capital gains are expected to reach a record $168 billion (for income tax year 2017).
Lee stated that :
“Selling pressure for bitcoin should be alleviated after April 15th,”
A cryptocurrency enthusiast tweeted:
“Fingers crossed. There could be bounce back again tomorrow – no one knows in this game! “
Tom Lee also added :
“ We support Bitcoin and large-caps,also we believe the bear market for alt coins is largely over, we don’t see upside for alts until mid-August.”
It is being noticed that the digital currencies are being used for daily operations instead of dollars as the prices of Bitcoin and Ethereum crashed recently. Also, some investors bought these coins to sell their alt coins, however, they got rid of it due to the tax season. Bitcoin has tumbled down to almost 65% since December and is trading at $6,882.06 as per today’s reports. However, many experts say that the cryptocurrency fans consider this as the best time to invest in Bitcoin.