2 states of America are preparing to take tax payment in Bitcoin

Firms and investors belonging to this segment have suffered losses due to the fall in the crypto market for the past few months. However, two US states are moving forward on plans to tax cryptocurrencies. Revenue departments in Colorado and Utah have decided to allow individuals and firms to pay taxes in cryptocurrencies such as Bitcoin and Ethereum. However, for this these states are facing some difficulties.

Selling in cryptocurrencies has reduced the value of the global crypto market from a high of around $3 trillion in November last year to less than $1 trillion. Bitcoin, the largest cryptocurrency by market capitalization, has lost nearly 70 percent in value since November. Bitcoin price declined from a high of $69,000 to a little over $20,000. After Colorado and Utah, some other states also considered taxing cryptocurrencies. However, most of these states have pulled back due to warnings from regulators and the fall in the crypto market.

Lee Reiners, executive director of Duke University’s Global Financial Markets Center, said, “Anything crypto-related has become less attractive because the market has been highly volatile over the past few months. It will not be of any financial benefit.” Celsius Network, one of the major crypto lending firms, banned transactions last month. “Celsius Network is going to go bankrupt soon,” says Columbia University professor Omid Malekan. As reported by AFP, some other crypto lending firms such as CoinFlex and Babel Finance have also blocked withdrawals. These firms allowed clients to deposit cryptocurrencies and receive interest on them or borrow them as collateral. Many clients of these firms are facing difficulties due to suspension of transactions.

Many firms in this segment are cutting their workforce to reduce costs. Coinbase, one of the major crypto exchanges, also recently decided to reduce its workforce by 18 percent. Headquartered in the US, the firm says that it has taken this step to cut costs in this difficult period of the industry.

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