Massive sales of crypto currencies are expected by mid-April, as US crypto holders are likely to owe the state $25 billion in capital gains taxes, according to Tom Lee, head of Fundstrat Global Advisors.
Tom Lee, former chief equity strategist at J.P. Morgan Chase, is one of the few, if not the only, Wall Street analysts to report regularly on Bitcoin and the overall condition of the crypto market.
The Bitcoin profit is rising
As the deadline for tax returns approaches mid-April, Lee says Bitcoin profit is rising. In a report for CNBC, the analyst says he estimates that about $25 billion in Bitcoin profit will be due on crypto currency holdings.
As the tax day approaches, we could witness a “massive” sale of crypto currencies to US dollars.
THIS IS A MASSIVE OUTFLOW FROM CRYPTO TO USD AND HISTORICAL ESTIMATES SAY THAT EVERY $1 OUTFLOW BETWEEN $20-$25 AFFECTS THE CRYPTO MARKET VALUE.
In addition, the expert believes that selling pressure is also being increased by crypto exchanges. Many exchanges have a net income of more than $1 billion in 2017 and hold working capital in Bitcoin or Ethereum rather than USD.
The IRS recalled that virtual or digital currencies are taxable as are Ethereum code transactions
The tax official also recalled that those who fail to properly file their tax returns by mid-April will face heavy penalties. While cash penalties and interest are just waiting for Ethereum code investors not to report their taxes, those who trade in larger quantities definitely have more to fear, the IRS said:
Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion will face a prison sentence of up to five years and a fine of up to $250,000.