On Saturday April 17, $7.6 billion in crypto long positions were liquidated in one hour as bitcoin plunged to $51,500, data from bybt.com showed. Ether fell 6.53 % to $2,166 the next day, losing $151 from its previous close.
Shortly after that, bitcoin’s price bounced back and alternated anywhere between $55,000 and $57,000.
This crash seems to coincide with multiple sources on Twitter stating that the U.S. treasuries will be charging financial institutions for money laundering using cryptocurrencies.
Back in March of 2020, the agency sanctioned two Chinese nationals and accused them of laundering stolen cryptocurrency on behalf of Lazarus – a group the FBI has labeled as a North Korean state-sponsored hacking organization.
While this crash may be unrelated to Coinbase’s direct listing, Peter Schiff, an avid critic of cryptocurrencies, stated: “Rather than being a watershed moment in the life of Bitcoin, the CoinbaseIPO may have marked the beginning of its death.”
However, another crash came on Thursday, April 22.
Crypto markets pulled back sharply after reports that US president Joe Biden is planning to raise capital gains tax for the wealthy.
Bitcoin crashed 10% to $49,332 (£68,482) on Friday morning in London.
Bloomberg reported a day earlier on Thursday that Biden is considering nearly doubling tax to as high as 39.6%, an increase from the current 20%. Cryptocurrency investors face higher taxes if Biden presses ahead.
On the flip side, if investors begin to buy the dips, Bitcoin price could turn around as investors could quickly scoop up BTC, which is now selling at a discount.
China’s stance change on Bitcoin
China’s central bank is now calling bitcoin an “investment alternative”, marking a significant shift in Beijing’s tone after a crackdown on cryptocurrency issuance and trading nearly four years ago.
“We regard Bitcoin and stablecoin as crypto assets. These are investment alternatives,” Li Bo, deputy governor of the PBOC, said on Sunday during a panel hosted by CNBC at the Boao Forum for Asia.
“They are not currencies per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.”