Looming tax deadline could be moment of truth for bitcoin bulls


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Coming off their best week since early February, digital currencies were slightly lower Monday, with many pundits eyeing the U.S. tax deadlines that loom a day away.


Bitcoin, the No.1 digital currency, hit a three-week high earlier in the day, trading to $8,407.72, before slipping back below $8,000, giving up some of last weeks gains. A single bitcoin
BTCUSD, +0.07%
was last valued at $7,988.63, down 4.4% on the day.


Tax day looms

After surging as much as 20% last week, many pundits now believe a medium-term low is in place, blaming the recent selloff on tax related selling digital currency owners who made money in 2017 are having to convert crypto into fiat money to pay their taxes.

CRYPTO: Where was #BTC 1M prior to ~$20,000 top? $5,900. In other words, BTC this year rollbacked prices similar to what happened in 2014/15. Could be same bottom as the 2014/15 bottom. Also, selling related to capital gains taxes in US should be lifting as tax day is 4/17. pic.twitter.com/AyOgKPoR2x


— Thomas Lee (@fundstrat) April 15, 2018

Tom Lee, managing partner at Fundstrat Global Advisors who has a year-end price target of $25,000 for bitcoin, was one of the first to note this possible cause for bitcoins slide. While he remains optimistic, he notes it will need more than just tax-selling relief for cryptocurrencies to push on.

There are still substantial regulatory uncertainties that are curbing institutional appetite for crypto. Until greater clarity is received from the SEC, in particular, many potential investors are sidelined, Lee said in a note to clients Friday.


Read: Bitcoin will rise to $250,000 by 2022, says Tim Draper

Coinbase buys Earn.com

After much speculation, cryptocurrency exchange Coinbase officially announced it has acquired Earn.com. As part of the deal, Earns co-founder and CEO Balaji Srinivasan will join Coinbase as chief technology officer, Coinbase said.

Earn.com was founded in 2013 as a hardware maker for bitcoin mining before shifting its focus to a social network where users can earn cryptocurrency by answering questions and completing tasks.

Earn will continue to operate and stand alone as a business within Coinbase, as they have built a paid email product that is arguably one of the earliest practical blockchain applications to achieve meaningful traction, Coinbase said.


What are other markets doing?

After significant gains last week, altcoins coins other than bitcoin also gave up some ground Monday. Ether was at $504.06, down 5%; bitcoin cash was off 3% at $756.78; Litecoin lost 3.4%, last trading at $124.40; and Ripple, which added more than 30% last week, was at 65 cents, down 3.9%.

Futures markets ended Monday in the red. The Cboes April contract
XBTJ8, +0.50%
finished down 1.7% at $7,950 and the CME Group Inc. April contract
BTCJ8, +0.25%
closed at $7,980, down 1.5%.

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