Bitcoin falls below $50K

Bitcoin and other cryptocurrencies fell after reports that U.S. President Joe Biden is planning to raise capital gains tax for the wealthy, which could potentially impact crypto investors.

Video transcript

JULIE HYMAN: Let's talk about something else that may be done, at least for now-- cryptocurrency rally. It's at least taking a pause, right? And we've had all of this commentary this week from some of the big banks like JP Morgan saying, you know, that Bitcoin was going to see a leg down. Well, here's a leg down. It went as low as around 47,000. The 50-day moving average, which, you know, in Bitcoin, as we've sort of discussed, in the absence of fundamental drivers, technical drivers tend to gain more importance.

And I know that 50-day moving average is something a lot of investors were watching closely. That said, if you're a cryptocurrency investor, guys, you kind of have to expect volatility. That's part of the deal. And maybe some of the newer crypto investors didn't, but even if you're new, there still have been pullbacks. So this seems just like it's kind of part of it, right, Myles?

MYLES UDLAND: Yeah, look, I can't wait to talk to Jared Blikre in about 30 minutes to get his view on the technical setup for Bitcoin because I've seen a lot of TA on the feed over the last 24 hours that this was not-- or this is no longer just a beautiful-looking chart. So we'll get into that. On Doge, whatever. Like, it was always a joke, so now it's down 30%. I mean, what can you really say about it?

What I will say, though, is, as crypto becomes a larger part of serious real money allocations, which I think we all believe and know it's going to be in the years ahead, what's the standard line on crypto? Crypto is a very volatile asset. It's not for everybody, right? We talked to Michael Sonnenshein of Grayscale not too long ago on that exact point. I mean, kind of tongue in cheek, but also seriously, I think that's basically, Brian Sozzi, code from your friendly wealth manager or whatever to say, don't ask me why crypto is up or down. It's going to go up and down all the time. And I'm not really going to have a good answer for you.

BRIAN SOZZI: Well, here, I think the action we're seeing this week, Myles, look what happened yesterday on talk of a higher capital gains tax. And Julie, you have to wonder, does the Bitcoin trade work--

MYLES UDLAND: Oh, boy.

BRIAN SOZZI: --if we're talking about a land of a potential--

MYLES UDLAND: Oh, boy.

BRIAN SOZZI: --44% [INAUDIBLE] you know, capital gains tax? Not looking good.

JULIE HYMAN: Eh. I mean, no.

MYLES UDLAND: Wow.

JULIE HYMAN: I don't--

MYLES UDLAND: We're doing this-- we're doing this already? We're getting loose?

JULIE HYMAN: No, we're not doing it. We're doing it next. We're doing it next.

MYLES UDLAND: This is the appetizer?

JULIE HYMAN: That's a great tease. The.