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From Boom To Gloom Crypto Investors Now Unable to Pay Their Tax Bill

In 2021, the total value of the cryptocurrency market reached $3 trillion, which was a new all-time high. In the same year, bitcoin lifestyle website, the most popular cryptocurrency, reached a new all-time high of $69,000.In the last six months, the price of tokens has been steadily going down, which has made anxiety the most common emotion.

Attempts to encrypt that didn’t work

When Asian markets opened this morning, the price of Bitcoin fell quickly and hit a new 24-hour low of $25,402. This was also a new low for the last 52 weeks, and it sent prices back to where they were in December 2020, when BTC rose back above $29,000. Even though Bitcoin went up around noon, the original cryptocurrency has lost more than 5% in the last 24 hours.

Since the beginning of the year, Bitcoin’s price has dropped by about 39%. They are selling for a lot less than their all-time high, which is expected to be around $69,000 in November 2021.

In the last 24 hours, the price of Ethereum has dropped by more than 13%, and it is now trading below the psychological level of $2,000.

The market value fell more than it ever had before

Since November 2021, a total of $1,812 trillion worth of crypto has been taken out of circulation. This has caused the market value to drop by 61 percent. From its highest point, the market value has gone down to its lowest point.

When the UST stable coin stopped being tied to the dollar in May, things got a lot worse. Because of this de-ped, the environment on Terra failed, which hurt the people who had put money into the project.

One of the customers bought and sold cryptocurrencies so that they could get a $700,000 tax refund in 2021. But he never thought about taking money out of the account and finding another way to pay his taxes. Now that he has lost a big chunk of his income, he feels helpless and worried about what to do next.

What makes digital assets different from their real-world equivalents?

Andrew Gordon, a crypto tax lawyer, repeated what Donnelly said and added that he too gets calls every day from worried crypto investors in the same situation as Donnelly.

People who invest in cryptocurrencies are often “younger and less knowledgeable about money” than people who invest in stocks. This is one thing that makes things worse. Gordon thinks that the way some apps for trading cryptocurrencies, like Robinhood, treat it like a game takes away from the real-world effects of what you do when you trade.For crypto trading and investment log onto Bitcoin smart.

Gordon says that people in this situation should call the Internal Revenue Service (IRS) and “settle” for the amount that the agency says should be paid. You could also set up a payment plan where a certain amount of the balance is paid off each month.

The relationship between gold prices and stock market values has always been shown to be negative, and this has been the case so far in 2022. Stock prices have gone down so far in 2022, but the price of gold has gone up by about 3%. So far this year, the S&P 500 index has dropped by about 16%.

If prices in the crypto market keep falling as quickly as they have in the past few days, the coin you’ve been eyeing might start to look like a great deal. On the other hand, Wall Street experts have a rule of thumb for situations like this: “Never try to catch a falling knife.”

If you use your imagination, you should be able to see that “buying the dip,” which is also called “catching a falling knife,” almost always goes wrong. But that doesn’t mean that smart traders can’t make a lot of money trading on more volatile markets. But the most important thing to learn from this is that big market changes that happen quickly might scare the average investor.

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Written by Marcus Richards

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