Italy announced that it intends to raise the capital gain tax on Bitcoin (BTC) and crypto from 26% to 42%, sparking market speculation.
Italy created a stir in the global crypto market on Wednesday by increasing the tax on virtual assets.
In an unprecedented move, the country led by President Georgia Meloni recently unveiled plans to raise the capital gains tax on Bitcoin and other cryptocurrencies to 42%.
This notable hike, up from the previous rate of 26%, has intensified investors’ exposure to digital assets, sparking concerns within the market.
Italy Raises Capital Gains Tax to 42%
According to recent reports, Italy’s government has decided to increase the capital gains tax on Bitcoin and cryptocurrencies from 26% to 42%.
This decision follows the country’s earlier stance, which imposed a 26% tax on crypto gains over €2,000.
The hike in tax rates may significantly dampen investor interest in digital assets across the country.
By increasing the tax on crypto profits, Italy seeks to use the gains from cryptocurrency investments to strengthen the economy.
However, this tax hike could also negatively impact the market, potentially discouraging crypto traders within the EU region.
It’s important to note that Italy’s inflation rate was recorded at 1.2% in September, relatively lower than other parts of Europe.
Nonetheless, the government’s decision to increase the capital gains tax on Bitcoin and cryptocurrencies has caused a wave of concern among investors nationwide.
How Is Bitcoin Performing?
As of now, Bitcoin has seen a nearly 3% intraday increase and is currently priced at $67,546.
The 24-hour low and high for the coin were $64,809.20 and $67,881.68, respectively. Bitcoin is riding a bullish trend today, driven by the broader market momentum.
At the same time, Bitcoin has benefited from a significant rise in institutional interest, contributing to the bullish sentiment.
Notably, Bitcoin ETFs saw an impressive $371 million in inflows as of October 15, coinciding with Bitcoin’s rise above $67,000.
Additionally, Coinglass data showed that Bitcoin futures open interest (OI) increased by 3.5% to $39.14 billion, and derivatives volume surged by nearly 61% to $106.47 billion.
This data highlights that Bitcoin remains strong, despite Italy’s recent tax increase on capital gains.
Crypto market participants continue to keep an eye on the coin amid key market developments.