My story of capital gains – yes, I can see much of the recent sell pressure attributed to US tax season
I made gains last year. I pay my taxes. And I'm cautious in paying my taxes, I'm willing to pay more even if the "rules" are uncertain. Because I exchanged some ETH and Bitcoin to Aion, OmiseGo, Zcash, and a few others, I treated each event as taxable. Sold crypto for fiat to pay taxes, and I assumed I owe based on the short term gain clock.
Taxes included US, State, and because of the level of gains, a "net investment income tax", which basically adds 3.8% in taxes to pay if you made strong investment gains.
Throughout the year, I tried to estimate my taxes myself, pay quarterly, and use software to help (such as bitcoin.tax).
Overall, my story is a positive one. Never timed "the top", but have no place to complain. However, I also Very Much underestimated how much taxes I owed
I thought I was being pretty diligent. But, after spending much time filling out the various trades in bitcoin.tax, and working with a CPA, it was revealed I had a massive tax bill owed. Luckily, I already took quite a lot out as a precaution "dummy check". That made the payment easy. Sad. But easy. Again, I have no place to complain, but wow, it was a lot of money.
Now my taxes are done. I'm happy to gradually buy into crypto over the weeks, months, years ahead. After all, nothing out there is anywhere near as promising to me. It's on the verge of technical milestones, it's game changing, and I can be more connected to the associated community than any other investment out there.
But I can say that for MANY people out there like me, the reality check of taxes hit hard, even after I thought I was doing it right. I know I'm far from alone in my gains and associated acquired respect/lesson in paying taxes. Very far from alone.
I suspect much of the tax-associated sell pressure is over; most people by now should know what they owe in taxes. Billions in gains were made last year. That's a lot of tax-associated sell pressure in short period of time. Remember, the gains took the year, the selling, weeks. You don't need to take out $1 billion from exchanges to drop the market cap $1 billion. Liquidity of crypto is too poor for such a simple model. It takes much less money to sway the market cap. There was so much gains by so many people, I have absolutely no doubt in my mind that much of the recent drop is people realizing how much they need to pay in taxes. It seems REALLY obvious to me.