How Does Capital One Block Cryptocurrency Purchases With Its Card?

The Case Study Of Capital One

For the first time, Capital One Financial Corporation has blocked holders of credit cards thereby from its bank from using them for cryptocurrency purchases while in a statement to Breitbart News, it was said that the company stated it made the move due to the limited mainstream acceptance of cryptocurrencies and the elevated risks of fraud, loss, and volatility inherent in the cryptocurrency market. Whereas it was then made the decision is subject to change while Capital One continues to closely monitor developments in cryptocurrency markets and exchanges as it will regularly evaluate the decision as cryptocurrency markets evolve. Thereafter the decision was made as Capital One blocks purchases that were first reported by the online publication called The Merkle and cited that Reddit thread regarding the issue as in the thread a Coinbase user was reported that his purchase of $ 90 in cryptocurrencies was blocked by the bank as it subsequently tweeted.

It was then observed that while most banks have held off from offering cryptocurrency-related services to customers as they have not blocked transactions involving them. Thereafter Capital One joins the TD Bank that is reported to have told customers that it doesn’t deal in that kind of business. Hereafter the PNC Bank has also ultimately blocked transactions involving cryptocurrencies which is unlikely that other banks are set to follow Capital One’s lead. Hereby to note the size of the cryptocurrency markets has since ballooned as the prices for those individual tokens have significantly skyrocketed as day traders and investors have rushed to put their money into the asset with exponential returns. Thereby it was later understood that much of the increase in cryptocurrency valuation has occurred on the back of speculation about prospects. However, the timeline for that future remains to be still hazy.

Thereafter the situation comes as while they have warned about the dangers of investing in cryptocurrencies these government regulators have surely stayed away from them for the most part. Hereby it has resulted in extreme price volatility and scams as the talk is of regulation and institutional money flowing into the markets gathers pace, as it is likely that Capital One might also revise its stance regarding cryptocurrencies. 

How Cryptocurrency Taxes Affect Bitcoin Price

In this context besides costing investors a pretty packet, the cryptocurrency taxes may also have a detrimental effect on the price of coins according to Thomas Lee and analyst at Fundstrat Global Advisor. Thereafter it is observed that in a CNBC interview the analyst explains further that massive sell-offs by investors who are seeking to reduce their tax liabilities putting pressure on prices, as President Trump’s new tax law encourages short term holding by applying a lower tax rate to them. Therefore, the long-term holdings are those that are held for at least a year and taxed at top rates of 20%. Thereafter the cryptocurrency exchanges are being expected to contribute to the sell-off as they keep most of their working capital in bitcoin and Ethereum. Moving further on it was Lee who said that they had net income of more than a billion dollars last year and might be forced to sell some portion of their cryptocurrency holdings thereby meeting those tax obligations. 

The fact to be observed here is that Lee estimates authorities may mop up as much as $ 25 billion in capital gains taxes as he said that there will be a massive outflow from crypto to USD as well as historical estimates are each $1 of USD flow ids $ 20 to $ 25 impact on crypto market value. Thereafter capital gains from trading of cryptocurrencies and stocks amounted to $ 1.04 trillion. Here comes the good news that it is Lee doesn’t expect the sell-offs to continue and should leave the path clear for a sustained recovery of markets. 

The Conclusion 

It was thereby noted that after a stellar 2017 where prices for a majority of cryptocurrencies skyrocketed the markets thereafter plunged during the first quarter this year as bitcoin the marquee cryptocurrency has lost more than 50% as the top 10 cryptocurrencies lost an average of 55.23 % as a wave of negative headline relating to government regulation and scandals depressed prices. Furthermore, Lee forecasts a price target of $ 20,000 for cryptocurrencies and $ 25,000 later. Hereby it is evident that there are quite a few reasons why Capital One is acknowledged to be the first and best among crypto trading. Stay tuned as we bring more on the topic.