In a scenario of inflation and high taxes in the United States, the price of Bitcoin continues to rise. Senators and other officials are planning to apply charges on assets value could change radically.

US tax authorities have adapted the law on taxes on Bitcoin (BTC) and other cryptocurrencies. Although that has allowed regulators to save time and effort, they want to increase taxes and establish a greater fiscal scope. In other words, the state is trying to take advantage of the money of Americans to sustain social spending.

Johnny Luna, a lawyer from Gordon Law Group, believes that those taxes could have disastrous consequences. He stated they could affect the cryptocurrency ecosystem as well as any property generating capital gains.

According to Luna, there are constant ups and downs in the price of Bitcoin and other cryptocurrencies. For that reason, he considers that many people would have to pay taxes on something whose value could change radically overnight.

The representatives of the Senate promoting those measures might not receive sufficient votes due to popular discontent, said the lawyer. Actions like those he criticizes would affect the entire stock exchange and real estate markets, among others. He added that this would be catastrophic for those who invest and the US economy.

Paying Unrealized Capital Gain Taxes in the United States

A realized capital gain is the final payment to a creditor or his withdrawal of earnings on an investment. On the contrary, an unrealized profit is the revaluation of something purchased, whose incomes a creditor has not yet received.

Senators and other officials are pushing through a proposal to apply an unrealized capital gain tax on the wealthiest taxpayers in the United States.

The Secretary of the US Treasury, Janet Yellen, and the President of the House of Representatives, Nancy Pelosi, recently announced a measure. They told television channel CNN that the Democratic party would propose new taxes within the framework of the discussion of the infrastructure law.

Yellen also stated that those taxes were on unrealized capital gains, even though they will focus on the capital income of the wealthiest.

According to the project titled Billionaires by the Numbers, the 664 billionaires in the United States are a population minority. However, the concept of unrealized capital gain tax does not set a precedent for its effects on the entire economy.

As the US Economy Falters, Bitcoin Remains Firm

The shortage of workers, the port crisis, and the energy consumption cuts are disrupting the US economy. Besides, the increase in the prices of fuel and commodities is making the situation less sustainable.

Year-on-year inflation in the United States between September 2020 and September 2021 reached 5.4%, not seen since the real estate crisis of 2008. There is a potential threat of taxes, but the value of Bitcoin increased until it reached an all-time high.

If the wealthiest sector of the population has to pay more taxes, an increasingly unfavorable economic scenario could unfold. That would continue to strengthen the role of BTC as a free currency without intermediaries to safeguard value.

By Alexander Salazar

Ether traders have been so optimistic that the cryptocurrency has not lost strength despite a 9.5% correction. Bernard Rzymelka, from Goldman, believes that its value could rise since inflation expectations have become higher.

The price of Bitcoin (BTC) usually leads the way for leading altcoins, whose prices also increase. The value of Ether (ETH) recently reached a new all-time high just two weeks after the first crypto asset did.

Analysts predict that the price of the second-largest crypto asset in the market could reach and even exceed USD 5,000. Everything seems to indicate the value of Ether will succeed in doing it.

The Price of Ether Will Continue Rising

Experts usually base their forecasts on the price of Ether on the staking of ETH 2.0. They also take into account the reduction in the supply available as a consequence of EIP-1559.

For that reason, many users of the cryptocurrency ecosystem say the value of Ether, which is close to USD 5,000 thousand, is programmed. Some others even say that it will surely reach USD 20,000 in the long term.

Traders have been so optimistic about Ether that it has not lost strength despite the 9.5% correction that it recently suffered. On October 27^th, the value of the cryptocurrency dropped from USD 4,300 to USD 3,900.

In late October, 50 specialists in financial technology stated that the price of the cryptocurrency could reach USD 5,114 thousand by the end of 2021. They also predicted that ETH could be worth USD 50,788 thousand by the end of 2030

Ether is currently trading at around  USD 4,520 thousand and has accumulated a 14.6% profit in the past week. Its price recently hit a new all-time high of USD 4,674.90, but it needs to rise by 3.37% to exceed that record price.

Some analysts believe that it could even reach USD 5,000 thousand if it maintains its current trend. As Ether has entered the ascending channel, its price could be heading to the support level this month.

Goldman Sachs Predicts a Higher Price for Ether

Besides the cryptocurrency community, some companies are expecting a significant increase in the value of Ether. For example, Goldman Sachs has said that the growing popularity of the crypto asset will allow it to outperform Bitcoin.

Goldman Sachs recently stated that the price of Ether would have a chance to increase by up to 80%. Therefore, it would rise to USD 8,000 thousand in the following two months.

Bernhard Rzymelka, director and global markets manager at Goldman,  compared the Bloomberg Galaxy Crypto index to an inflation expectation market measure. His study revealed that there is a strong correlation between both indicators.

The executive found that Ether has followed the steps of inflationary markets very closely. Given that inflation expectations have risen, Ethereum’s cryptocurrency could also be on its way to doing so.

The prediction by Goldman Sachs ranks the value of Ether well above forecasts by other analysts. It is only a matter of time before the price of the second-largest cryptocurrency hits a new all-time high.

By Alexander Salazar

BTC holders do not seem to want to spend their coins, expecting the prices to become higher. The profit levels for long-term holders are between 50% and 75%.

Although the price of Bitcoin (BTC) recently hit a new all-time high, profit-taking levels are moderate. That suggests that the cryptocurrency is going through the initial stage of a major bullish run, the latest report from Glassnode states.

The analytical firm addresses the evolution of the Bitcoin market between October 25^th and 31^st. They note that the appreciation of the cryptocurrency in October reached a record high of 40%, although it temporarily fell below USD 60,000.

The Level of Bitcoin Spent and Profits Is Moderate

Measuring the profitability of Bitcoin through the SOPR (Spent Output Profit Ratio) indicator requires dividing the current price by the realized or effective price. The latter corresponds to the value of BTC the last time that it changed hands.

The aSOPR metric has been above one (1) since mid-August, with holders profiting. The so-called adjusted SOPR (aSOPR) discards transactions with coins less than one hour old. For that reason, Glassnode considers all holders when dealing with taking moderate profits.

The behavior of the current aSOPR is like that of the initial zone running from August to late October 2020, also with moderate sales and earnings. After that, the bullish run is more noticeable, and there are three zones where profit-taking increases.

Two of those zones are for sustained profits, between which there is a zone that shows maximum profit-taking. That happened in December 2020 after the price of Bitcoin exceeded the all-time high of December 2017.

The capitulation zone chart, from late May to late July 2021, shows BTC sales at a loss. In the current zone, moderate sales have been occurring since August, when there was an upward trend. The largest profit-taking within that range occurs with the latest all-time high.

The Bitcoin Unrealized Profit and Loss Metric

Another perspective on holder earnings is through net unrealized profits or losses (NUPL), according to Glassnode. That metric shows the BTC in the hands of long-term holders (LTH), which are between 50% and 75% in profit.

On four occasions, unrealized profits of LTH have been in that range. At the end of 2013, 2017 and 2020, the abovementioned range preceded an all-time high for Bitcoin.

In 2019, Bitcoin rebounded from the low of USD 3,000 it had reached at the end of 2018. Despite a mid-year boost, holders gave in to selling pressure, and there was a capitulation.

After a considerable correction in May, since October, there is a similar scenario of unrealized profits of LTH between 50% and 75%. Since they are willing to retain their coins, this could be the start of a bullish run.

Cryptocurrency analyst Willy Woo recently predicted that the price of Bitcoin in the long term would remain bullish. However, short-term holders (STH) recently showed a slight tendency to take profits.

By Alexander Salazar