Bitcoin Prices Fall by Nearly 7% Following Last Day of Volatility

Bitcoin headed for a free fall on Wednesday following its upward momentum of the last few days.

The crypto coin was down by nearly 7 percent on Wednesday to about $11,500, according to CoinDesk. The price was as high as $13,000 earlier this week.

All this as the El Salvador government announced that the country plans to be one of the first in the world to offer bitcoin as a currency.

For the plan to work, the Asian Development Bank and the Bank of Central America have to approve the move. Central banks in Indonesia, Mongolia and Singapore have also expressed an interest.

Bitcoin to El Salvador: A Far Cry From The Sequel

Bitcoin prices were still well up on Tuesday, but Tuesday’s surge came on the heels of a selloff on Friday where bitcoin prices tumbled below $10,000.

Bitcoin is currently trading at $11,359 per unit. As we noted above, on Wednesday Bitcoin was down nearly 7 percent.

Last week bitcoin prices collapsed as high as $11,000. Bitcoin peaked over $19,000 in mid November, but appears to have slipped below the $10,000 mark.

More from Money Morning on bitcoin

Could There Be a Tax Break for Bitcoin and Other Crypto Assets?

Bitcoin and other crypto assets could be snared in the tax brackets set for cryptocurrencies for the first time, as the IRS announces it will limit its taxes on revenue derived from trading cryptocurrencies.

The IRS set the limit at $150,000, and the standard 35% rate will be applied to that amount.

If you already have bitcoin, that new limit is not going to affect you. But if you want to hold bitcoins as investments and capital gains to qualify for the new rules, you will now have to pay the new 35% rate.

Bitcoin Day Trading Could Regain 50% of Last Decade’s Lost Value

Because of the boom in cryptocurrencies, more day traders are getting into the game.

In 2017, daily average trading volume reached 26,255,487, and if Bitcoin were to reach $10,000, that trading volume could top 100 million, according to investment firm Commodity Trading Advisors (CTA).

In comparison, CTA said that over the last 10 years, actual daily average trading volume of $7.8 billion was the current record.

However, because of the dramatic rise in Bitcoin prices, even those numbers are no longer 10-year records.

Bitcoin Taxes: The Single Most Important Word in These Crypto Market News Stories

A new analysis by WealthMedics.com indicates that Bitcoin could become the single biggest money-maker for the U.S. federal government in 2018.

Here’s the breakdown…

James Pennebaker, managing partner at WealthMedics.com, has been tracking how the cryptocurrency market is driving across the U.S.

Traders are putting $11 million per day into crypto-related vehicles.

Since 2014, Congress has received around $35 million per day.

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