In a report last week, Lee noted that, since US households owe an estimated $25 bln in capital gains taxes due to their crypto holdings, and crypto exchanges also will owe income taxes, both households and exchanges will be selling their crypto to pay the US government:
“We believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions. Many exchanges have net income in 2017 [of more than] $1 bln and keep working capital in [Bitcoin]/[Ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”
According to Lee, “historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value.”
And it seems that pressure is now lifting.
Bitcoin is back above $8,000, back above its 200DMA, and holding yesterday’s surge gains…
And as goes Bitcoin, so goes the rest of the crypto space with Ethereum and Ripple up 40% on the week..
And the entire crypto space is a field of green…
Lifting the crypto market cap back above $300 billion…
We also note that some have suggest that the overall price spike could be attributed to a report released yesterday that crypto is generally permissible under Shariah law.
This article is brought to you courtesy of ZeroHedge.