At the start of the week, a number experts have shared their visions of the future price of Bitcoin. In their opinion, the price will continue to fall and FUD like the rumours of the Chinese banks increasing cryptocurrency regulations are the reason behind it. Some even say that the price may fall down to $4000. Tom Lee, an investor and a huge believer in Bitcoin and cryptocurrencies, has now revealed the exact judgment day.
What will be the price of Bitcoin?
Fundstrat cofounder, investor and a firm believer in Bitcoin, Tom Lee, predicts the cryptocurrency market to go down in the second half of April. He believes that the reason behind it is the need for the US-based traders and investors to pay taxes on their earnings.
According to Lee's data, investors need to pay $25bn in taxes to the government for their transactions with crypto. In addition to that, exchanges need to pay taxes too, but because most exchanges hold their assets in digital currencies instead of fiat, we will be seeing a big sell-off by the exchanges, so that they can those taxes in dollars.
"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 billion and keep working capital in [bitcoin]/[ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH."
Lee thinks that the cryptocurrency market will bottom on the 17th of April and adds:
"Regulatory headline risk is still substantial. And sentiment remains awful, as measured by our Bitcoin misery index, which is still reading misery.”
However, Lee doesn't see this as the end of the cryptocurrency market. In the middle of March last year he predicted that Bitcoin will cost $91,000 in the spring of 2020 and he still stands by his words.
What do you think? Can Bitcoin dip below $4,000? Discuss in our Crypto Group.