Bitcoin Predicted to Stabilize for Two Months; ETFs Experience Record Outflow, U.S. Crypto Tax Laws Could Change
Summary:
Bitfinex analysts predict a two-month consolidation period for Bitcoin's price following a recent halving. The first-ever outgoing funds were reported by BlackRock’s Bitcoin ETF amidst a record outflow from other ETFs. Meanwhile, a proposed U.S. bill could change the taxation of cryptocurrency, requiring block rewards to be taxed when sold instead of acquired.
In the opinion of cryptocurrency exchange, Bitfinex, Bitcoin may take a two-month stabilization period before a price resurgence commences. Additionally, the first-ever outgoing funds have been reported by BlackRock’s Bitcoin ETF, while other ETFs noted a record combined outflow. Concurrently, proposed legislation could disrupt taxation systems within U.S. cryptocurrency networks.
Bitfinex analysts project a possible two-month stabilization period for Bitcoin's price following the halving. In the Bitfinex Alpha market report's recent release, they predict Bitcoin will remain the benchmark for price movement within the cryptocurrency market throughout May and act as the core indicator for total cryptocurrency market capitalization. The report suggests the macroeconomic backdrop is sturdier than previous instances, with short-term rate reductions maintaining a low probability. They also note an increase in informed understanding of the economy among customers and businesses that eclipses that of previous cryptocurrency market cycles. Hence, a one to two-month stabilization of Bitcoin prices within a $10,000 range is plausible.
BlackRock's Bitcoin ETF reported its inaugural outflow day during a record ETF drain. The USA's Bitcoin exchange-traded funds marked a record net outflow, with the iShares Bitcoin Trust (IBIT) losing $36.9 million on May 1. In contrast, nine other Bitcoin ETFs cumulatively reported $526.8 million in outflows. Among these, only the Hashdex Bitcoin ETF (DEFI) reported no change, while the Fidelity Wise Origin Bitcoin Fund (FBTC) registered the largest outflow, totalling $191.1 million. Bloomberg ETF analyst, James Seyffart, however, reassured that Bitcoin ETFs are functioning as expected and that liquidity changes are standard within ETF life spans.
Recommended legislation could introduce alterations to the taxation systems of U.S. cryptocurrency networks. A new bill proposed by U.S. congressmen Drew Ferguson, a Republican from Georgia, and Wiley Nickel, a Democrat from North Carolina, would mandate that taxes on block rewards from proof-of-work and proof-of-stake networks be paid at point-of-sale rather than upon acquisition. The legislation, named the "Providing Tax Clarity for Digital Assets Act," would class staking rewards as "created property" under U.S. tax law, gathering taxes from block rewards at collection time. Nickel referred to current regulations as "exceedingly complex" and stated their tendency to incite investor uncertainty, impose double taxation, and drive American companies to relocate overseas.
Published At
5/2/2024 3:52:58 PM
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