Representation of the Ethereum virtual currency standing on the PC motherboard is seen in this illustration picture, February 3, 2018. — Reuters pic
Representation of the Ethereum virtual currency standing on the PC motherboard is seen in this illustration picture, February 3, 2018. — Reuters pic

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TOKYO, April 23 — Cryptocurrency Ether pulled back sharply from a record high and rival Bitcoin also fell today amid speculation that US President Joe Biden’s plan to raise capital gains taxes will curb investment in digital assets.

The drops came after Biden on Thursday unveiled a raft of proposed changes to the US tax code, including a plan to nearly double taxes on capital gains to 39.6 per cent for people earning more than US$1 million (RM4.1 million).

But while social media lit up with posts about the plan hurting cryptocurrencies, and individual investors complaining about losses, traders and analysts said declines are likely temporary amid growing retail and institutional investor acceptance of digital currencies as a legitimate asset class.

“That’s what everyone is talking about now,” Chris Weston, head of research at Pepperstone Markets Ltd, a foreign exchange broker based in Melbourne, said referring to the tax plan.

“And I think you may have some technical selling going through. Ether’s been the poster child of movement. It has massively outperformed Bitcoin.”

Ether plunged more than 10 per cent to as low as US$2,140, a day after climbing a record US$2,645.97. It last traded down 6.5 per cent at US$2,243.95.

Bitcoin also weakened, falling 3.62 per cent to US$49,824.97. — Reuters



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