Prices May Skyrocket Once Tax Day is Over, Traders Say

Bitcoin Forecast Markets Tax

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Sead Fadilpašić

Journalist

Sead Fadilpašić

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Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

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Last updated:

June 26, 2023 06:54 EDT

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With the none too anticipated Tax Day looming in the US on April 17 and nobody really knowing how to file their crypto assets, many traders think this is exactly what’s holding Bitcoin and other coins back this year.

Spencer Bogart, partner at Blockchain Capital, told CNBC, “Tax-selling has been a significant factor in downward crypto prices over the past few weeks. I would expect this downward pressure to abate after tax day.”

The Internal Revenue Service (IRS) views Bitcoin and other cryptocurrencies as property, meaning profits from transactions are subject to capital gains tax. The problem with that is that, while this is clear in principle, nobody really knows how to apply it to their crypto gains, many of which people didn’t document in time.

Tom Lee, head of research at Fundstrat Global Advisors, told CNBC that US traders owe a total of USD 25 billion in taxes for digital currency holdings due to the prices rising more than 1,300% last year in the case of Bitcoin. Lee is also the only major Wall Street strategist to issue crypto price targets, and in his opinion, Bitcoin may be hitting a similar bottom to where it was a month before it hit USD 20,000 in 2017 (it was USD 7,000 – USD 8,000 at the time).

Pantera Capital Founder and CEO Dan Morehead said in an investor letter published last week that bitcoin is “highly likely to have exceeded USD 20,000 within a year.”

An investor Tim Draper, famous for how bullish he is in Bitcoin, also predicted a price jump: by 2022, the cryptocurrency could hit USD 250,000.