Bitcoin News: MicroStrategy Faces Potential Tax Burden on Unrealized Bitcoin Gains

MicroStrategy, led by Bitcoin advocate Michael Saylor, is under scrutiny for potential federal tax liabilities on its $47 billion Bitcoin holdings, including $18 billion in unrealized gains, as U.S. tax regulations evolve.

MicroStrategy Faces Potential Tax Burden on Unrealized Bitcoin Gains: Report

MicroStrategy, a business intelligence firm led by prominent Bitcoin advocate Michael Saylor, is facing potential federal tax liabilities on its extensive Bitcoin holdings, which are estimated at $47 billion. According to a Wall Street Journal report, the company's massive crypto portfolio, including $18 billion in unrealized gains, has drawn attention amid evolving U.S. tax regulations. New tax rules could soon tax unrealized gains on its Bitcoin holdings, which would challenge the purpose of its Bitcoin roll-up strategy. The U.S. Corporate Alternative Minimum Tax is being considered as a potential mechanism for this taxation.

SAB 122 Rescission: A Major Catalyst for Bitcoin Price

The US Securities and Exchange Commission (SEC) has rescinded Staff Accounting Bulletin (SAB) No. 121, which previously imposed strict accounting requirements on crypto custody for US banks and financial institutions. This change, now encapsulated in SAB 122, is expected to significantly impact Bitcoin's price dynamics more than the anticipated US Bitcoin Reserve (SBR). Originally enacted in 2022, SAB 121 required banks to classify customer-held cryptocurrencies as liabilities, increasing operational costs and complexities, thereby deterring financial institutions from offering crypto-related services.

Bitcoin Price Prediction for January 24

Bitcoin's price recently surged toward $106,000 but struggled to maintain its momentum. Buyers strongly defended the support level at $102K. The trading volume for Bitcoin has dropped by 6.1% over the past 24 hours, reaching $75.7 billion. Looking at a broader time frame, Bitcoin dropped below $100,000 on January 7 and has generally been on a downward trend since then. It hit a low of about $89,397 on January 13 but has begun to recover from this decline. Over the last 24 hours, its total market capitalization has risen by 0.27% to $2.1 trillion.

Bitcoin (BTC) Price Stays Above $105,000 Despite One-Year Low in Whale Numbers

The 7-day MVRV Ratio indicates more room for short-term growth, while whale activity has dropped to its lowest level in a year, signaling a potential shift in large-holder behavior. With BTC’s EMA lines reflecting bullish sentiment but showing signs of consolidation, the market faces a decisive moment between testing new highs or retreating to key support levels. The 7-day MVRV (Market Value to Realized Value) Ratio for Bitcoin currently stands at 0.85%, following a period of stability NEAR 0% over the past two days. This metric measures the average profit or loss of BTC holders who have acquired their coins within the last seven days. A positive MVRV ratio indicates that recent holders, on average, are in profit, while a negative ratio suggests unrealized losses.

Crypto Market Experiences Increased Volatility

In the outgoing week, Bitcoin updated an all-time high, approaching a price of $110K and dragging the entire crypto market up with it. On Friday morning, capitalisation is moving up again, settling above $3.63 trillion. The market needs time to adjust to the current highs, and so far, there are more signs that this is a pause before further growth rather than the market hitting impenetrable resistance.