The cryptocurrency market has been hit hard by U.S. President Joe Biden’s proposed budget for the fiscal year 2024. The budget proposes the elimination of tax subsidies for cryptocurrency investors, real estate investors, and the oil and gas sector. This move is expected to save the government nearly $5.5 trillion over the next decade, but it has had a significant impact on the cryptocurrency market. In this post, we will take a closer look at the proposed budget and its impact on cryptocurrency investors, with a particular focus on Bitcoin.
Biden’s Budget Targets Crypto:
According to the White House, Biden’s proposed budget would save the government an estimated $24 billion by eliminating tax subsidies for cryptocurrency investors. This subsidy, known as the “tax-loss harvesting strategy,” allows investors to sell cryptocurrency at a loss and take a tax deduction to reduce their tax burden. The investors could then buy back the same cryptocurrency the next day, reducing their taxable income and keeping more of their earnings. However, this strategy has been eliminated under the new budget proposal.
More Trouble For Bitcoin Price?
In addition to the elimination of tax subsidies for cryptocurrency investors, Biden’s proposed budget also eliminates a tax loophole for real estate investors. This loophole allowed real estate investors to postpone paying taxes on profits from deals indefinitely as long as they continued to invest in other residential or commercial properties. The elimination of this loophole is expected to save the government approximately $19 billion.
The news of these proposed budget changes has had a significant impact on the cryptocurrency market, with Bitcoin’s price dropping below $21K. At the time of writing, Bitcoin is trading at approximately $20,900, representing a 5.05% decrease over the past 24 hours and an 11% drop over the last seven days. The broader crypto market is also recording significant losses, with leading altcoins such as Ethereum, XRP, and Polygon all experiencing drops in value.
Biden’s proposed budget for the fiscal year 2024 has dealt a significant blow to cryptocurrency investors, with the elimination of tax subsidies expected to lead to significant savings for the government. However, this move has had a significant impact on the cryptocurrency market, with Bitcoin’s price dropping below $21K. It remains to be seen how the market will react to these proposed changes and what impact they will have on the long-term viability of cryptocurrency investments.
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