Bitcoin and other cryptocurrencies have seen a huge market adjustment this week as traders sell off in a bid to beat US taxes.
The US Internal Revenue Service has stepped up action to claw back unpaid taxes from cryptocurrency traders.
The Bitcoin market cap plunged $45 billion in a week to $137 billion. Ether, Lite and Ripple all followed suit – with Ether suffering the worst with $26 billion fall.
Bitcoin has seen massive rises and falls – up more than 900% last year, but down 43% already this year.
The fall follows exchange Coinbase handing over the trading details of 13,000 investors to the IRS.
Exchanges say traders do not have the cash to cover capital gains tax bills, so are liquidating their holdings to pay the IRS.
One market expert, Bradley Rotter, vice chairman of Rivetz, said: “The amount of capital gains from US investors in the rise of crypto pays for the damn wall with Mexico. I think most people are just starting to connect the dots about this.”
Here are the latest trading prices from cryptocurrency tracker cryptocompare.
|High in year||$19,345||$1,359||$346||$2.78|
|Low in year||$971||$45||$4||$0.00|
|Market cap||$137 billion||$59 billion||$9 billion||$26 billion|
|Market cap change in week||-$45 billion||-$26 billion||-$2.6 billion||-$10 billion|
Around the markets
Following on news that Twitter boss Jack Dorsey is planning a move into cryptocurrency with his own exchange, other billionaires are reported to be tracking his success.
Peter Thiel, co-founder of payment platform PayPal held several hundred million dollars of cryptocurrency through venture capital firm Founders Fund.
Another business angel, Tim Draper, holds around $1 billion of Bitcoin and hedge fund manager Mike Novogratz is setting up a cryptoasset merchant bank.
How many cryptocurrencies are there? The latest figures put the number at 1,658. Total market capitalisation – the aggregate value of all issued cryptocurrencies – is $369 billion with the top 20 accounting for 89% of the market.