Bitcoin corresponds to SPY in 1 hour: what is in the 2 hours of 2021? – July 2, 2021
The price of Bitcoin recently exploded this year. The cryptocurrency first hit the $ 20,000 mark on December 16, 2020, and hit $ 60,000 on March 14. Assets also hit an all-time high of nearly $ 65,000 in April on the success of Coinbase’s IPO. However, the winning cryptocurrency then began to lose its appeal.
Bitcoin fell below the $ 50,000 level for the first time since March 8 on US President Joe Biden’s plan to increase capital gains tax. Bitcoin’s (BTC) dominance also fell below 50% this time around for the first time since 2018. This BTC metric measures the relationship between the value of the largest cryptocurrency and the overall market capitalization of assets. digital. At the current level, bitcoin is hovering around $ 33,000.
Overall, bitcoin has gained at par with the SPDR S&P 500 ETF (TO SPY – Free Report) (+ 14.1%) this year. Against this background, we highlight a few concerns below that could dampen the bitcoin rally in the second half of the year.
The capital gains tax hike is a big minus
President Biden is expected to raise the long-term capital gains tax for the richest Americans to 39.6% from the current rate of 20%, for those earning $ 1 million or more. This, in addition to an existing surtax on investment income, will bring federal capital gains tax rates for high net worth investors up to 43.4%. With bitcoin gaining around 258% last year, there could be a rush for profit amid the likely increase in investment gains tax (read: What’s worth for ETFs if Biden increases the capital gains tax?).
Overvaluation issues seem important: volatility is a major concern
Scott Minerd of Guggenheim Partners, a long-term bitcoin bull, also recently said the world’s largest cryptocurrency bitcoin was too overvalued, as reported on CNBC. He sees Bitcoin as “very sparkling” and a “major correction” in the near term.
Regulatory issues still exist
Despite such huge success noted in recent times, regulatory concerns are not going away for bitcoin. There have been repeated attempts in the past by ETF issuers to bring an exchange traded product into the cryptocurrency. But none have received SEC approval. The SEC is apparently looking for more evidence of security in this trade.
Another issue for cryptocurrency, according to a CNBC article, is questions regarding the impact of bitcoin on the environment. âBitcoin’s mining equipment requires a lot of electricity to operate, and Bitcoin’s power consumption has increased dramatically over the years, along with its price. While critics of Bitcoin have long warned of its huge carbon footprint, Tesla CEO Elon Musk has brought the issue back to the fore this year, âthe article notes.
Focus on ETFs
Since we do not have a pure bitcoin ETF at present, actions related to mining or trading bitcoin play an indirect role in betting on this crypto asset.Coinbase Global Inc. (PIECE OF MONEY – Free Report) is an American company that operates a cryptocurrency exchange platform without an official physical seat.
Coinbase is up 60% this year. Coinbase is exposed to funds like ETF on the digital transformation of VanEck vectors (DAPP – Free report), ETF Simplify Volt Fintech Disruption (VEND – Free report) and Renaissance ETFs (Initial Public Offering – Free report). Blockchain ETFs like ETF Amplifying transformational data sharing (BLOK – Free Report) should also be watched by investors interested in investing in bitcoin.
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