Cryptoeconomy: Bitcoin struggles to recoup losses after tumbling below $50,000 and losing $97 billion in 24 hours

Bitcoin—the world’s most popular cryptocurrency—struggled to recover its losses on Friday after plunging below the $50,000 price level in the early hours of the morning thanks to investor jitters over President Biden’s plan to nearly double capital gains taxes for the wealthy.

Despite the initial shock to the market following the news that President Biden will propose hiking capital gains taxes to 39.6% for individuals earning more than $1 million (which also set equity markets falling), one expert is confident that crypto will rebound quickly. “While the shock may be sustained in stock markets, the nature of cryptocurrency will see straight through this dip,” Oliver von Landsberg-Sadie, CEO of crypto payments company BCB Group, told CoinDesk. That’s because of the influx of “large-scale crypto buyers who simply have no intent on exiting the position,” he said.

See more: With Coinbase IPO, here are top 5 currencies to buy on the crypto platform

Key background

Friday’s losses are the latest in a series of volatile price swings for bitcoin, which reached a record high of almost $65,000 ahead of crypto exchange Coinbase’s public listing last week but fell more than 10% last weekend—shrinking the total crypto market by $300 billion—as blackouts in China slashed mining rates.

Surprising fact

When bitcoin’s price fell below its 50-day moving average last Tuesday, it ended the cryptocurrency’s longest streak of consecutive closes above that average since at least 2014, according to analysts at Bespoke Investment Group.

Source: Forbes