Capital gains tax is not bad news for BTC, beware of “flops” in BTC
On April 23, BTC fell below the psychological price of $50,000, and its market value also fell below the $1 trillion mark. I took a look at the online news about BTC in the last 24 hours. The biggest news is the change in US tax policy. Biden plans to propose to nearly double the capital gains tax rate for the wealthy to 39.6%.
It is important to know that the price trend of BTC is mainly affected by two main factors. One is the policy changes of various countries on BTC, and the other is the attitude of BTC whale accounts towards BTC. Although I have repeatedly emphasized that policy changes are one of the main reasons that affect the trend of BTC, the capital gains tax in the United States is not mainly aimed at BTC. This time Biden plans to adjust the capital gains tax. I personally feel that the impact on BTC is very small, and it cannot be completely interpreted as a negative policy of BTC. The market will quickly digest this news, and the possibility of a rapid rebound of BTC will not be ruled out in the future.
Moreover, BTC itself is a high-risk and high-yield financial management tool. Another factor affecting the price of BTC is the attitude of capital. BTC can not only break through to a high of 64,000 US dollars before, it is not impossible for BTC to rise to 100,000 US dollars as long as capital is willing to speculate in the future. In addition to being a cryptocurrency, BTC is also a highly speculative financial management tool with high risks and high returns. But BTC itself does not generate value, so the income gained from investing in BTC mainly comes from the gambling between investors and capital.
The price of BTC fluctuates sharply, which is actually beneficial to BTC
Since the price of BTC exceeded $20,000 in December 2020, BTC has been held in groups by capital. Data shows that during the peak period, about 95% of BTC is in the hands of 2.4% of the accounts. These BTC whale accounts will not be easily withdrawn without making money. Investing in BTC requires a large amount of capital, and as long as holding BTC for one day, it will increase the holding cost for one day. These investments will eventually need to be earned back on BTC. There are two ways for them to make money. They are to find BTC takers and find more people to bet against.
You must know that BTC bulls have capital, resources and information advantages, so they are not worried about the price trend of BTC, but worry that no one will bet against them. I pointed out in the previous article that BTC has been floating around $55,000 for a long time, which is actually not good for the BTC giants. It is the same reason. Although people who invest in BTC are optimistic about the future of BTC, they mainly believe that BTC can bring benefits to investors. This includes long and short BTC, because if you want to make money with BTC, you don't necessarily have to increase the price of BTC.
When the price of BTC fluctuates sharply, it not only represents high risks, but also high returns. Especially some BTC investors who dare to use leveraged funds like the thrills and excitement brought by the sharp increase in BTC prices. This may be one of the charms of BTC. A lot of news that is “unfavorable” to BTC, including the so-called capital gains tax in the United States, has been used by interested people to speculate. If someone thinks that this is an opportunity to short BTC, then it is likely to become the target of capital harvesting, and the power of short bursting is suitable without the need for long quilt.
If you want to buy bottom BTC now, it may not be an opportunity
Of course, if someone thinks that BTC can buy bottoms now, then capital will not worry about someone bottoming, because retail investors and their information are not symmetrical. If you buy the bottom BTC now, it is likely to be locked up by the high position, and it may be copied more and more. It should be understood that although the price of BTC is currently as high as $50,000, the holding cost of the BTC whale cluster is not that high, and it is very likely that it is not even half the price. So not to mention the current USD 50,000, even if the BTC drops to USD 30,000, I think the whale cluster will be very willing to let the receiver take it all.
The risk of investing in BTC is now very high, not only facing policy risks, but also facing the risk of being harvested by capital. There will be many policies for BTC in the future, but not all policies will be interpreted as negative. In particular, the United States has a very ambiguous attitude towards BTC. Don't easily believe that there will be any news that is unfavorable to BTC from the United States. If the United States really wants to oppose BTC, it will issue two news that are unfavorable to BTC, namely increasing taxes on BTC and strengthening BTC supervision.
The capital gains tax in the United States cannot be completely interpreted as a negative policy of BTC. Instead, be careful that BTC takes this opportunity to "flop". Maybe I didn't say clearly, but I don't know how the price of BTC will go next. Because buying big and buying small BTC has a chance to make money, but opening big and small is a technical job, maybe only the dealer knows how to open it.
BTC is a high-risk wealth management product. The risk of investing in BTC is not controllable. It is not recommended that ordinary investors participate in it wholly.