“Bitcoin Bull” predicts soaring values following April tax deadline
Fundstrat founder, and Wall Street Bitcoin expert, Tom Lee, says cryptocurrency values will soar following the April tax deadline.
Also known as the “Bitcoin Bull,” Lee says investors are selling off their holdings to pay their April tax bill.
Tax returns for 2017 in the US are due April 17.
Investors who bought Bitcoin as it soared last year are not looking forward to the April tax deadline.
Anyone who sold cryptocurrencies for profit during the record price highs will now owe taxes on those earnings.
Tom Lee estimates that Bitcoin investors in the US owe $25 billion in capital-gains taxes.
This estimation equates to roughly 20% of all such payments due for 2017.
Speaking on Thursday about the April tax deadline, Lee said:
“The $25 billion would represent 20% of capital gain tax receipts (payments) to Treasury, which explains why the IRS cares so much about collecting crypto taxes.
“Total receipts for capital gains should hit a record $168 billion (for income tax year 2017), exceeding the $137 billion of receipts in 2007.”
April tax deadline behind sell-off
According to Lee, the April tax deadline has driven a large portion of Bitcoin selling.
As a result, some crypto-exchange operators with large cryptocurrency holdings could have been pressured to sell, even as prices dropped, to raise money to pay taxes in 2017 profits before the deadline.
Mr. Lee says a vast number of individual investors sold their alt-coins for Bitcoin and Ethereum.
As the April tax deadline looms, however, they are dumping them for US dollars, he explained, adding:
“As a consequence, if this analysis is correct, selling pressure for Bitcoin should be alleviated after April 15th.”
This year, April 15 is a Sunday, with Emancipation Day holiday in Washington, DC falling on the following day.
So April tax day falls on the 17th.
Lee added that, currently, “regulatory headline risk is still substantial.
“And sentiment remains awful, as measured by our bitcoin misery index, which is still reading misery.”
At the time of press, Bitcoin is currently trading at $6,621, according to the Coin Thud live price charts.