Bitcoin rebounded over $1,000 in less than a day, moving from $6,900 to over $8,000 on Thursday. It hadn’t been over $8,000 in two weeks and has settled around $8,000 over the past two days. There has been speculation and analysis that due to Bitcoin’s large price increase during 2017 that it created a large tax liability, and that some of the selling pressure over the past two weeks is due to investors selling it to pay taxes.
Since Bitcoin, and other cryptocurrencies, saw such huge gains in 2017, that means investors who sold them or used them to pay for items largely incurred short-term capital gains. Also mining Bitcoin and other cryptocurrencies generated current income and self-employment taxes per the IRS in a March 2014 notice.
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