TOKYO/LONDON: Bitcoin and other cryptocurrencies suffered hefty losses on Friday on concern that US President Joe Biden’s plan to raise capital gains taxes will curb investment in digital assets.

The selloff came after reports that the Biden administration is planning a raft of proposed changes to the US tax code, including a plan to nearly double taxes on capital gains to 39.6% for people earning more than $1 million.

Bitcoin, the biggest and most popular cryptocurrency, slumped 5% to $48,8867, falling below the $50,000 mark for the first time since early March, while smaller rivals Ether and XRP fell around 7%.

The tax plans jolted markets, prompting investors to book profits in stocks and other risk assets, which have rallied massively on hopes of a solid economic recovery. Levies on investment gains were reported to be in line for record increases.

Bitcoin is on track for a 15% loss on the week, though it is still up 65% since the start of the year. Ether dropped more than 10% on the day to as low as $2,107, a day after climbing to a record $2,645.97.

But while social media lit up with posts about the plan hurting cryptocurrencies, and individual investors complaining about losses, some traders and analysts said declines are likely to be temporary.

Others also remained bullish on bitcoin’s long term prospects, but noted it might take time before prices start increasing again.

Shares of cryptocurrency exchange Coinbase also fell around 4% to $282 in US pre-market trading, marking the lowest level since its listing earlier this month. The listing had driven bitcoin prices to $65,000, before pulling back 25% in the following days.