At first I was skeptical when people blamed the recent bear market on the American tax season, because I read many articles that almost nobody actually pays their taxes and Bitcoin is a global currency, so the USA is hosting only a part of the traders. Then I found THIS article where is estimated that American crypto traders ‘owe’ the IRS 25 billion dollars! This immediately changed my mind.
If only one percent is selling Bitcoin to pay their taxes, 250 million have to be cashed out in this period. This creates a sell pressure that is more than half of what the Mt. Gox guy caused. These two factors together could certainly cause the recent crash.
The possible direct and indirect results of the end of the tax season
In 3 days the tax season is over and people will not sell for this reason anymore. The direct result is that less Bitcoin will be sold while the demand remains even. This will result a positive effect on the price.
There is also an indirect effect that could even be a bigger case for a bull market. Institutional investors mention this reason for the selloff all the time and are waiting on the side lines to enter the market. Around the 17th could be an entry point for a huge wave of Wallstreet money to flow into the tiny market cap of Bitcoin. This could literally skyrocket the price.
Tom Lee is very respected among institutional investors, so they could decide their entry point on his analyses
Don’t underestimate the institutional money
When institutional money start to flow in and causes the price to rise others will follow because they expect the bottom to be in. Even when you calculate the inflow of money to the market cap as 1:1 it is extremely bullish, but short term the effect will be way bigger because an inflow of new money of millions can raise the market cap with billions. The next bull run could be the biggest in the history of Bitcoin, while the previous ones were already overwhelming!
HODL and ACCUMULATE!
Disclaimer
This is no financial advice, just my view on the market.
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Nice post brooo
Very interesting news @michiel sanagat beruan guana for others thank you for sharing
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Thanks sir @michiel for sharing the updates. Cryptos again prepare for skyrocking.
hope the next bull run will be historic
good days ahead
Success in life is never guaranteed. Unfortunately, however, taxes almost always are. Coin miners and traders were riding high last year, and many people made a small fortune in cryptocurrencies in a matter of months. Now that tax season is here, however, it’s time to pay the piper.
Evading taxes is tempting, sure. Nobody likes paying their taxes. But failing to do so can land you in serious hot water with the IRS. This is especially true for cryptocurrency investors, who have already caught the attention of the tax agency. Last year, the IRS sued Coinbase seeking information on all active users on the exchange in an effort to collect back taxes.
it will have a huge positive effect!
thanks for giving quality updates about crypto
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Interesting article, subscribed, I hope for reciprocity!
As like the past 3 months, I will keep hodling on!
It appears that you were right about the tax day. Just like you I was sceptic!
But I don’t mind what the actual reason is as long as it rises!
It creates the impression that you were ideal about the expense day. Much the same as you I was doubter! Be that as it may, I wouldn't fret what the genuine reason is the length of it rises!hope the following bull run will be notable <//great days ahead//>
We are happy sharing this update news.Thanks a lot.
Awesome! That's right. Let's just HODL and accumulate. Soon the patience will bear fruit.
The reality is that the markets already reacted to that news and we saw a very bullish evolution of the market.
We must consider that potential entry of big investors in the crypto world is a possibility and was formed a lot of speculation around it.
What makes people think that institutional money is going to change everything?
Aren't they smart enough to buy coins Over The Counter. In that case, price is not going to make moves. Also, they are not going to use it as a product/Currency, instead they will buy and hold as an investment. The only advantage i could see is, involvement of institutions will make taxing law easy. Other than that, mass adoption and increased usage is going to make massive price movement.
If people think that change in tax laws in developed countries could make mass adoption of businesses which will reflect in price, i agree. However, most people are in an assumption that, when institutions start buying, Market will explode.
I wonder how many % of the crypto curriencies retail trader actually sold their positions to pay tax?
I actually owed in this year for the first time. It wasn't fun paying out all that money to the tax man :(
There goes my Vegas money :-D!!!