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Bitcoin has been surging higher recently, with BTC/USD gaining 45% over the space of three weeks. Coming off the back of a period that seemingly focused on claims that we were seeing the bubble finally burst, there is a feeling that markets are seeing a more optimistic tone return for cryptocurrencies. With a host of countries having reviewed what steps to take with respect to targeting the sector, we are now moving into a period that should have greater certainty from a policy standpoint.
One factor helping things along will be the passing of the deadline for the completion of US Federal income tax, which occurred on 17 April. We have seen a circa 16% gain since that date. With substantial tax payments due for such a blockbuster year, there is no doubt that the tax-selling seen in recent months will have played a significant role in dragging crypto prices lower over recent weeks. Given the substantial sell-off we have seen in crypto prices, it would make sense for many large crypto holders to declare their earnings at this current rate in order to shift assets into a more tax-efficient holding method. The gains we have seen since that tax day point towards a feeling that the shackles have been taken off somewhat.
Looking across the spectrum at some of the altcoin, we are seeing a sharp rise in some of the smaller cryptos as well, with ripple (XRP/USD +88%), bitcoin cash (BCC/USD +93%), ether (ETH/USD +34%) and stellar lumens (XLM/USD +34%) all gaining significant ground over the past week. This rise in altcoins highlights a significant shift in market confidence, which is something that has been missing for some time.
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