The United States will not allow the use of crypto to avoid taxes

Bitcoin climbed 8.8% on Wednesday, ending the day around $41,900. Apparently, the benchmark cryptocurrency had some obvious issues with growth above $42,000. Thursday morning we see an equally strong reversal to $39,000. As a result, Bitcoin lost 5.6% in 24 hours Ethereum – 4.8%, other major top ten altcoins are down 1% (Terra) to 7.2% (Avalanche).

According to CoinMarketCap, the total crypto market capitalization fell 4.5% on the day to $1.75 trillion. The Bitcoin Dominance Index fell from 43.0% to 42.7%. The Cryptocurrency Fear and Greed Index added 6 points to 28, climbing into “fear” territory.

Bitcoin’s growth momentum was also supported by the positive momentum of stock indices, however, on Thursday morning, the positive pull on them remains in contrast to the selling of cryptocurrencies.

Bitcoin jumped when a statement by Janet Yellen appeared on the US Treasury Department’s website, which does not contain strict measures to control the cryptocurrency field. The statement was published, probably prematurely, and then quickly removed from the site.

Later Wednesday, US President Joe Biden signed the first executive order to regulate cryptocurrencies in the country. The document only contained the most general provisions, such as consumer protection, financial stability, technological development and illegal use of cryptocurrencies. More specific measures in the field of digital asset market control will be developed by the various federal ministries.

In our view, states are making it clear that they will not allow cryptocurrencies to become a side business and be used to evade sanctions, taxes, money laundering, and the like. Such control is more difficult to implement than with centrally issued fiat currency.

This article was written by Alex Kuptsikevich, Senior Market Analyst at FxPro.


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