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- Crypto market has plunged since Joe Biden proposed to raise taxes on wealthy investors
- Biden has plans to raise taxes and use the funds to help childcare and education programs
- The proposal has also targetted sharp declines in the Wall Street
The Crypto market has performed tremendously since October last year. However, after recording major gains, the market is observed plunging in the previous seven days. Over the last few days, it is observed that few significant cryptocurrencies like Bitcoin, Ethereum, and XRP have dropped in value. We know that the cryptos are volatile, and prices can rise and fall sharply. Indeed, there are several reasons why the market is falling, which also consists of taxations. On Friday, Joe Biden announced plans to raise taxes on rich investors. Hence, following the situation, many investors observed leaving the market.
Joe Biden shared the next part of his infrastructure package
The United States president is planning to raise taxes on whale investors. Such raised funds will be used as an infrastructure package and help childcare and education programs. Additionally, the tax increment will reportedly seek to extend via 2025 the expanded child tax credit. Thus, the extension will give American parents recurring cash payments and stands to reduce poverty.
Notably, Biden is seeking to beef up the US IRS to bring in more funds via increased enforcement of rich taxpayers. Hence, the percentage is going to have the highest tax rates on the wealthy investors.
Biden’s proposal has affected the stock and crypto market
The proposal provoked a sharp crash in the Wall Street and crypto markets. The S&P 500 index fell by 1%. On the other side, many major cryptocurrencies also dropped in value. According to Thomas Hayes, the chairman and managing director of hedge fund Great Hills capital LLC, the index will fall by 2k points if the proposal passes.
If following the scenario, investors begin to leave the stock market, and there are chances that investors from the crypto market will also step out. And the entire cryptosphere will then face sharp corrections in prices.
How are few leading cryptos performing now?
According to the data from CoinMarketCap, the news caused a bear market in crypto. Over the last 24-hours, the price of Bitcoin and Ethereum has dropped by more than 7%. In contrast, the price of BNB and XRP tokens have fallen by more than 10% and 19%, respectively. Notably, in the top 100 crypto assets chart, none of the asset’s price is up over the last 24-hours.
The proposal needs to go through the US Congress, where the Democratic party is holding a narrow majority. Also, it is unlikely that the proposal will receive support from the Republicans. According to Reuters, there is a low possibility whether the proposal will have support from the unanimous backing of the congressional Democrats. However, the clarification is expected on Wednesday.
