- Hedge Fund Pantera Capital reveals that firms have earned $1.4 trillion through cryptocurrency gains.
- Firms are now selling cryptocurrency capital gains to cover their taxes.
- Big risk-off swept the crypto market in response to Russia's military attack on Ukraine.
Hedge fund Pantera Capital revealed that $1.4 trillion in cryptocurrency capital gains were made in 2021. Cryptocurrencies were trading in the red with the rising geopolitical tension, and investors sold crypto gains for covering taxes.
Pantera Capital notes spike in crypto capital gains in 2021
The total crypto market capitalization dropped following Russia's invasion of Ukraine. There has been a pullback in the US equities market. Proponents noted a significant drop in Bitcoin price in response to the rising selling pressure.
Amidst the crypto market bloodbath, hedge fund Pantera Capital noted that $1.4 trillion of cryptocurrency capital gains were made in 2021. Investors have recently sold cryptocurrencies to cover their tax bills.
Institutional investors are pulling funds out of cryptocurrency capital gains and the crypto market, increasing the selling pressure on Bitcoin. Pantera capital's finding is a catalyst in Bitcoin's price drop and fueled a bearish outlook amongst investors.
Analysts argue that the crypto market bloodbath was a big risk-off move. Institutional investors added Bitcoin and cryptocurrencies to their balance sheet rapidly in 2021. However, the recent events have influenced retail traders' outlook on Bitcoin.
Nigel Green, CEO of deVere Group, commented on the crypto market's correlation with the stock market,
The correlation between crypto and stock markets has been pretty solid over the last few months on both inflation news and geopolitical issues.
FXStreet analysts have evaluated the Bitcoin price trend and noted that bulls are desperate to find support in the ongoing downtrend. If Bitcoin's price trend fails to reverse, Bitcoin price could plummet to $30,000. The asset has dropped below $40,000, and analysts have predicted a 25% drop in Bitcoin price if the downtrend continues.
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