Why did Bitcoin Drop Under $20,000?
Bitcoin had a significant drop in value as the Biden Administration's recent tax proposal could significantly impact the crypto market.
The market recently saw Bitcoin bounce off a historic line of support at $20,000. The tax proposal would impose a 30% tax on the energy used for Bitcoin mining, prevent crypto investors from selling assets at a loss, and quickly rebuying them to save on taxes, as the New York Times and Bloomberg reported.
This proposal is just one of the latest attempts by the U.S. government to regulate and control the rapidly growing and global crypto industry. In addition to the tax proposal, the government recently confiscated $217 million in Bitcoin and sent it to the crypto exchange Coinbase, where it could be sold on the open market.
This follows the liquidation of the crypto-friendly bank Silvergate, which cited pressure from the U.S. Department of Justice and other regulators and the collapse of the offshore crypto exchange FTX in its decision to close its doors.
The Biden Administration’s attempts to regulate the crypto industry have been ongoing and follow a months-long campaign by the U.S. Securities and Exchange Commission Chairman Gary Gensler to label every digital asset, except for Bitcoin, as a security.
This campaign has met with pushback from some judges, such as one in New York who recently criticized the agency for attempting to stop bankruptcy proceedings for the embattled crypto lender Voyager by claiming a token designed to help repay customers may be a security.
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Chairman Gensler’s stance on digital assets is also at odds with the head of the Commodities Futures Trading Commission, Rostin Behnam, who has reiterated his belief that the second-largest crypto asset, Ethereum, is not a security. Meanwhile, Grayscale’s Bitcoin ETF lawsuit against the SEC may be heading in a positive direction. A panel of judges in the District of Columbia Court of Appeals recently questioned why the SEC would allow the launch of a Bitcoin futures ETF but not a Bitcoin spot ETF, suggesting that the SEC may have a weak case.
The recent events have caused a significant drop in Bitcoin’s price, which began the week at $22,400 and is currently worth $19,950 down 8.1% in the last 24 hours. While the market has experienced volatility, many crypto enthusiasts remain optimistic about the long-term growth potential of digital assets. As the regulatory landscape continues to evolve, it will be interesting to see how the industry adapts and whether the government’s attempts to regulate it will be successful.
Andrey Kunev
Reporter at CoinsPress
Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.
