Bitcoin (BTC) has slumped more than 8%, over a 24-hour period, a drop attributed to U.S. President Joe Biden’s proposed tax increase on capital gains on those earning above $1 million. But the effect may be temporary, according to the CEO of a leading crypto-dedicated payment services provider.
Biden’s proposed treatment of capital gains as income, which stipulates a rate of up to 39.6% instead of the current 23.8%, has had “a shock effect in all markets,” BCB Group CEO Oliver von Landsberg-Sadie told CoinDesk. Still, cryptocurrency is likely to be unaffected over the long-term, he said.
“While the shock may be sustained in stock markets, the nature of cryptocurrency will see straight through this dip,” Landsberg-Sadie said.
He said MicroStrategy’s Michael Saylor and Tesla’s Elon Musk have both made their views “abundantly clear” about holding bitcoin in their corporate treasuries.
“The difference between cryptocurrency and any other market is that we’re seeing more and more large-scale crypto buyers who simply have no intent on exiting the position,” Landsberg-Sadie said. Instead, the stock-to-flow model cited by blockchain hedge fund Pantera Capital for its prediction that the price of bitcoin will reach $115,000 this summer will be a “much stronger driver of value than fiat-based tax.”
According to Landsberg-Sadie, the drop in bitcoin’s value on Friday has been an “overreaction” to Biden’s capital gains proposal and will likely bounce back to the Pantera projections where its next high is somewhere above $70,000.
Bitcoin is currently changing hands at about $49,400.