The price of Bitcoin (BTC) experienced a particularly sharp drop last night, dropping back below $50,000 and dragging altcoins with it. We decipher what happened.
Bitcoin (BTC) tumbles to $50,000
The price of Bitcoin (BTC) was already struggling to stay above $ 55,000, but the fall overnight was particularly brutal. In the space of a dozen hours, the BTC lost -12% falling back under $ 50,000:
Its capitalization has fallen back under $1 trillion, with a price which at the time of writing these lines has reached 49,449 dollars. This corresponds to a decrease of -22% over the week.
Altcoins are not in better shape, with Ether (ETH) losing -11% over the last 24 hours and Binance Coin (BNB) losing -12%. The XRP Ripple is part of those affected, dipping by 23% over the same period. Among the top 10, the Dogecoin (DOGE) is the most affected, with -30% over the last 24 hours. We still note that the altcoin does not erase all its gains: it is the only one to progress over the week (+12%).
Why have the markets fallen?
How to explain this sudden fall? It seems that the wind of panic that blew through the markets tonight is coming from the United States. A rumor has circulated about a new measure envisaged by President Joe Biden, which would increase the tax rates on capital gains to high levels.
The proposal would seek to tax people earning more than $1 million a year and holding those funds over the same period. According to Bloomberg, they could be taxed at a minimum of 43% and up to 56% to finance social programs.
So this obviously concerns cryptocurrency whales, and that’s certainly what triggered this widespread panic. It should also be noted that the S & P500, the Dow Jones, and the Nasdaq have also reacted to the news, which shows that the sentiment is not confined to the field of cryptocurrencies. In any case, the $50,000 threshold has become crucial for BTC, which risks falling even lower if it fails to maintain it.