Innocent traders will make BTC fall even further and take most of the cryptocurrency market with them. This is what a recent publication by Pantera Capital, one of the top US BTC companies, revealed.
According to the company, the first quarter of the year is the time when, in the US and in most countries, investors have to settle accounts with the IRS.
But what few traders and new market investors know is that cryptocurrencies and the gain made with them are taxable in much of the world including the US.
So many “innocent” traders must be surprised by the Lion account knocking on the door. And they can sell their cryptocurrencies in the period.
“Many crypto traders are new to investing. Can you imagine a person buying as much BTC as they can… And then their accountant says they owe 34% of their earnings in taxes. As they are ‘all-in’ on cryptocurrencies, the only way to raise money to pay their taxes is to sell some cryptocurrencies. Prices fall until Tax Day,” said Pantera Capital.
The company refers to the “tax day” in the US that takes place on April 18.
According to Pantera Capital, this trend was seen in years after new records, as it happened in 2013, 2017 and 2020, and it should happen now, in 2021.
Cryptocurrencies will get cheaper
Also according to the company, the fall will be a buying opportunity. After all, the price of cryptocurrencies should retreat:
“We have updated some BTC charts first shown in our June 2021 letter. They confirm our perception that the markets have not become overvalued and are, in fact, very cheap right now.”
Finally, the company also stressed that the current moment is fleeting and that the sales pressure is not intentional. Therefore, as soon as the tax season passes, the market will resume a bullish pattern.
“Part of the crypto selling pressure was unintended tax positions… There was $1.4 trillion in crypto capital gains created last year. This may have caused a good part of the recent sales”, he concluded.