Bitcoin rebounded above $9,000 over the weekend as the cryptocurrency extended post-Tax Day gains.
The digital currency traded near $8,923 as of 12:05 p.m. ET Monday, up more than $950 since last week, according to CoinDesk. Bitcoin has fallen more than 30 percent this year, and pundits blamed much of that price pressure on U.S. tax obligations.
Tom Lee, co-founder and head of research at Fundstrat Global Advisors, estimated U.S. households owed $25 billion in taxes on their cryptocurrency holdings after bitcoin’s rise to near $20,000 in 2017. The Internal Revenue Service views bitcoin and other cryptocurrencies as property, meaning profits from transactions are subject to capital gains tax.
Lee, the only major Wall Street strategist to issue bitcoin price targets, predicted bitcoin would recover after U.S. investors submitted their taxes and has a $20,000 price target for this year.
Bitcoin’s one-week rebound
Monday’s price marked a roughly 15 percent increase from the low of $7,834 hit Tuesday, which was the original deadline to file taxes. After the agency’s web page for making the payments crashed Tuesday, the IRS gave taxpayers another day to submit returns.
“We believe the ‘winter’ is ending for Bitcoin, as the crypto to fiat pressures from tax day subside, and as headline risks seem to be fading,” Lee said in a note to clients Friday.
Other “alt-coins,” or cryptocurrencies other than bitcoin, were also trading higher Monday. Ethereum, the second biggest cryptocurrency by market capitalization, was up 3.6 percent, while ripple rose roughly 1 percent, according to CoinDesk.
Bitcoin cash, which spun off from bitcoin in July, rose 17 percent Monday. The cryptocurrency has jumped 80 percent over the past week after developers announced a spin-off of the cryptocurrency, known as a “fork,” planned for May 15.