- Bitcoin investors owe an estimated $25 billion in US taxes, according to Tom Lee, the co-founder of Fundstrat.
- As Tax Day approaches, many bitcoin owners are selling their digital coins in exchange for dollars. And so, Lee believes some of the selling pressure on bitcoin will lift after the tax deadline on April 17.
- Bitcoin is down about 65% from its mid-December peak.
US tax returns for 2017 are due on April 17.
Many people who bought bitcoin as it soared last year are not looking forward to that day. That's because they were unaware that they'd owe taxes on what they earned if they sold their cryptocurrencies for profit.
Tom Lee, the co-founder of Fundstrat, estimates that US bitcoin investors owe $25 billion in capital-gains taxes, or about 20% of all such payments due for 2017.
"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," Lee said in a note on Thursday. "Total receipts for capital gains should hit a record $168 billion (for income tax year 2017), exceeding the $137 billion of receipts in 2007."
That's driven some of the selling in bitcoin, he said, because cryptocurrency exchanges that held some of the capital used for daily operations in digital currencies instead of dollars sold as both bitcoin and Ethereum crashed. Also, some individual investors likely bought bitcoin and Ethereum to sell their alternative cryptos, or alt-coins, but dumped both for dollars as tax season approached.
"As a consequence, if this analysis is correct, selling pressure for bitcoin should be alleviated after April 15th," Lee said. Tax Day falls on the 17th this year because the 15th is a Sunday and the Emancipation Day holiday in Washington DC is being observed the following day.
Bitcoin has tumbled 65% from its peak in December, and traded near $6,690 on Thursday, according to Markets Insider data.
Get the latest Bitcoin price here.>>
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