Major cryptocurrencies including bitcoin and Ethereum’s coin have lost significant value compared to the U.S. dollar since the administration of U.S. President Joe Biden indicated on Thursday that capital gains taxes could be increasing.
A single bitcoin was worth $52,121.62 as of 10:20 p.m. Sunday, according to cryptocurrency exchange platform Coinbase.com — a decline from the $55,278.64 Coinbase quoted for 9:30 a.m. EST Friday. The evening price represented an increase in bitcoin’s value from figures just hours earlier.
Ethereum, another major cryptocurrency, was fetching $2,435.33 at about 10:20 p.m. Sunday — a decline from its Friday high of about 1.8 percent, according to Coinbase.com. Ethereum had been off more than 5 percent earlier Sunday.
According to Reuters, which reported on the decline of cryptocurrency values earlier in the weekend, a major reason was fear of the potential that higher U.S. capital gains taxes would deter investors who might otherwise buy the currencies.
“But while social media lit up with posts about the plan hurting cryptocurrencies, and individual investors complaining about losses, some traders and analysts said declines are likely to be temporary,” a Reuters article stated. “There has been growing retail and institutional investor acceptance of digital currencies as a legitimate asset class. That has coincided with a surge in online trading in stocks and crypto by retail investors, stuck at home with extra cash because of the COVID-19 pandemic.
CNBC reported that major cryptocurrencies lost $260 billion in value Friday after the Biden administration’s capital gains tax suggestions.
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The continued volatility of major cryptocurrencies comes as they have been accepted in a growing number market and by a rising number of enterprises. At the same time, companies working in the space are coming under increased scrutiny of regulators including the federal Securities and Exchange Commission.
