It seems like the crypto market is slowly but surely recovering following the past week, which saw Bitcoin and most digital assets dropping in price.
At the moment of writing this article, BTC is trading in the green, and the king coin is priced at $52,695.99.
Proposed tax hike could trigger bulls
It’s been just reported that the CEO of crypto intelligence firm Messari said that the Biden administration’s proposed tax hike on capital gains could be bullish for crypto and the decentralized finance (DeFi) space.
In a new interview on CNBC, Ryan Selkis said that investors might turn to DeFi amid plans to increase the federal capital gains tax rate to as much as 43.4% from its current rate of 23.8%.
“If you think about this capital gains issue, one of the unintended consequences might be that more capital’s locked in this crypto ecosystem long term and medium term. Ultimately, that’s going to be to the benefit of this entirely new class of assets,” he said.
He continued and explained that “They’re referred to as DeFi assets, essentially, being able to borrow against existing crypto holdings rather than sell them and trigger a taxable event. You might have structurally higher interest rates. You might have a better tax set up to invest in those assets and those protocols in that ecosystem versus taking money out of the equation. So I still think that there’s a lot of upside in this market.”
Regarding the Bitcoin correction that took place during the course of the past week, Selkis says the dip can bring in a new wave of buyers.
“If you look at any other time period outside of the one week, 24-hour, and one month, Bitcoin and crypto at large are still the highest performing asset classes and the highest performing mega assets, so this could be a good buying opportunity.”
He also made sure to highlight the fact that the crypto space has not reached its top yet.