Bitcoin crashes to six-week low as markets spooked by Biden wealth tax

J.

Oe Biden’s tax hike plans for wealthy investors helped blow up cryptocurrency valuations today as Bitcoin slipped 25% below last week’s record high.

Biden’s first speech to a joint congressional session on Wednesday is expected to include a move towards an almost double tax on capital gains of 39.6% for those who earn more than $ 1 million.

Wall Street showed its displeasure last night when the S&P 500 fell 0.9%, while fears about future digital asset investments eased Bitcoin by up to 10% to $ 48,610.

It was nearly $ 65,000 after the Nasdaq exchange Coinbase went public last week.

While the foam of cryptocurrencies has peeled off, stock market investors are more skeptical about the chances of Biden receiving the tax changes from Congress.

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UBS’s global wealth management team believes an interest rate closer to 28% is more likely, adding that stock market history shows very little correlation between changes in the capital gains tax rate and stock performance.

They added, “Some investors may choose to make capital gains now rather than potentially paying a higher interest rate in the future. However, US taxable domestic investors only own about 25% of the US stock market. “

London investors accepted the sell-off on Wall Street last night when the FTSE 100 index fell just 10.20 points to 6,929.40.

A bigger focus seems to be on next week’s reporting season for the first quarter, especially as most of the UK banking sector is driven by Post numbers. UBS analyst Jason Napier’s favorite domestic picks are Barclays and Virgin Money after increasing his price targets for the pair by 8% to 195p and 5% to 210p, respectively.

Lloyds, due to report results on Wednesday, was the top tier promoter after climbing 0.3p to 42.24p. Napier has a target price of 47 pence.

The domestic FTSE 250 index fell 53.26 points to 22,311.58 while Carnival and easyJet fell more than 2% as the surge in cases in parts of the world, including India, weighs on sentiment over travel stocks.

At FTSE All-Share, Photo-Me International shares rose 1.3 pence to 66.9 pence – the highest level in over a year – after the photo booth operator in Japan had raised its forecast for the full year.

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