- The crypto market is currently in a huge dip.
- One major reason for the dip is President Biden’s signing of the new infrastructure bill.
- This bill affects American cryptocurrency traders because their market gains will be reported.
The crypto market is met with a bloody Tuesday, as most cryptocurrencies are experiencing a massive dip. Despite being coined “Moonvember”, the month has left even top assets like Bitcoin and Ethereum reeling from the roller-coaster crash.
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As seen on the image above, only the stablecoins Tether (USDT) and USD Coin (USDC) are in the red, given that they are pegged to the US dollar. The rest have taken huge blows, particularly Bitcoin, which set a new all-time high (ATH) last week. Also, Ethereum seems to have lost its momentum after seeing one ATH after another.
Recently, US President Joe Biden signed the new infrastructure bill requiring tax reporting for brokers. Unfortunately, this affects US-based cryptocurrency exchanges. This way, cryptocurrency traders who live in the US will need to pay their taxes based on gains due to crypto trading.
This caused FUD in the market, causing many investors to sell their assets. Moreover, many are not yet certain how the new rules will apply and to what extent.
Grant Maddox, an independent Certified Financial Planner (CFP), commented:
“I think a lot of folks are in for a big tax surprise. “[The IRS is] going to be tracking this information, and there’s no avoiding the tax consequences and gains now.”
To be clear, the new law will only apply to US-based cryptocurrency exchanges. Those licensed and regulated in other countries will not have to worry.
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