Bitcoin Forum

Recently, the reason why bitcoin declines is that the deadline of tax payment in America is coming, so some traders would like to close a position. After btc price rose by 20% last week, many experts think the mid-term adjustment of bicoins have finished. A lot of digital currency owners have to pay their taxes by statutory currency because the deadline of tax payment is near.

when is it??

The deadline is already past. It was yesterday (April 17th).

In fact, to comfortably have covered payments by yesterday, you'd have to have sold 1+ weeks ago. That lines up pretty well with that bottom in the low $6,000s. Quite a coincidence. :)

It seems to me that the Americans do not have such a significant value on the price of bitcoin to stimulate the bullish trend. The price of bitcoin will rise but this will happen for other reasons. It makes no sense to look for explanations of bitcoin behavior. We can only record his behavior. It is impossible to predict.

But it will be really good to see at least a good trend coming this news. I can't remember last year though, it the tax payment has something to do with the increase last year. Around this time last year, everyone was really talking about the failed ETF application by the Winklevoss twins that it slipped my mind. But yeah, its really hard to see if it this will have a significant effect. I guess we will have to wait at least a week to be able to say that it really did.

I hope it makes a move in the market, if not at least don't make the market fall again, having its recovery now can at least ease our mind from all the dips it encounters. I want to earn now seriously.

You realise that not everyone leaves this stuff to the last minute, right? Some will have sold in Jan in anticipation of paying taxes.

I don't know. That doesn't make much sense to me to be honest.
When people had to sell some Bitcoin or cryptos in general to pay their taxes, from which money they should buy Bitcoin again to make the price rise??
No this is all nonsense. If we will see another rise it will have nothing to do with tax day.
And which experts are you referring to? Do you have any source to follow?

What's your point? Some people do wait until the last minute, myself included. I literally sent in my tax payments yesterday. ;)

And according to the tax-as-sell-pressure theory, even one person waiting until April means net sell pressure on the price leading up to the deadline.

You have to consider trading sentiment too. Most market participants hold onto losing investments. They don't realize losses until they absolutely have to. Because of the downtrend, it's likely many taxpayers held off selling until more recently. Think about it. Anyone who took profit in 2017 but reinvested the capital (tempting in a volatile market like BTC) needed to sell to cover the 2017 tax liability. Combine that with the downtrend market psychology I mentioned.

There are a lot of people that has no idea they owe taxes to the IRS, specially all these new kids that got in in the last FOMO cycle. They heard that "bitcoin is anonymous" while buying bitcoin in Coinbase, ridiculous. Then they get surprised when they receive a letter from the IRS.

Also you are supposed to let them know that you own X amount of BTC, even if you don't sell. Some people think that you can have millions worth of BTC without declaring it to the IRS until you sell. I think this is the case with the IRS and other jurisdictions. Honestly taxes with BTC is a big mess. If you ever used Coinbase you better be ready.

Why? Are all cryptocurrency traders U.S. citizens? Because I don't think a deadline of tax payment is enough to influence everyone to push on a bear market. There is even no connection that Americans have pulled out their money from the cryptocurrency market in anticipation of the payment of their taxes. It doesn't even halt any trading operations because of it. We are still on a bear market since the start of 2018 and a lot of members here are still connecting news, historical charts on why is Bitcoin down.

reports say that most people in US don't pay their taxes when trading cryptocurrencies. so if you say it was the tax deadline that influenced the market 3 days ago then you are saying these reports were completely false.
i also find it illogical for people to sell their bitcoin just because they have to pay taxes! it doesn't make much sense to me.

I am pretty sure at least %70-80 of cryptocurrency traders don't care about taxes at all cause its very easy to avoid. Americans are no different. But it might have affected couple thousands people to buy more.

Hmm. So we have to assume that since this is over, we may actually start seeing some good response in the market pretty soon. It may be just be a coincidence because I cannot expect how a single country may actually have that much of an impact on the value of cryptocurrency at large. It is understandable though, since a single man anyway can dump on the market and still affects it hugely. I guess this is the period we normally see some switch in trend after some long downtrend anyway. Let's hope the positive vibe will start getting back into the market.

I would've thought America leads the way in terms of money and users by quite a substantial margin now China's gone quiet. Europe always seems to be very modest in comparison.

I do wonder though whether this is just a search for causation. If this wasn't available then people would've latched on to something else to explain the cratering to themselves.

It is just a question of time wait till it be lower tax

The mere fact that the drops to $6k and the current rise perfectly aligned to the tax day already speaks volumes, though still isn't a sufficient explanation as to why the market reacted the way it did. We can infer that the traders from other countries also traded accordingly with the event, knowing that there would be a huge selloff weeks prior to the tax day and that trading against it would be no good. Since the selling pressure had already subsided, I guess we are in for a series of bounces and retraces, but the bullish sentiment would remain at the top. Give it a week or two and a better line could be drawn as to where would this market is headed next.

The market was being suppressed due to the excessive selling pressure whether it's for Mt Gox or the approaching tax day in America. Surprisingly, after 19th April, the Tax day, with reduced selling pressure, we saw an amazing Bitcoin pump of almost 17% in mere 30 mins. This has created a situation of FOMO which has made every other coin pump. Bitcoin still has to test $8700 levels before concluding any bull phase.

It could definitely be a coincidence. There are way too many variables to attribute market action to tax season. But logically, it should have some effect, given the size of the US market. It's not just one of 200 countries in the world; it's one of the largest cryptocurrency markets. I'm not sure how these estimates (https://www.thestreet.com/story/14546582/1/cryptocurrencies-tax-payments-boom.html) were arrived at, but they sound about right:


We saw the same kind of action in early 2014. Maybe it's a coincidence, maybe not. You never really know with markets. Shit just happens. :P