Cryptocurrency prices bounced back on Wednesday, reversing earlier weekly declines as Bitcoin edged closer to its all-time high.
Digital asset investors are closely watching geopolitical developments, hoping for a swift resolution in Iran.
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Market optimism grew after the president told lawmakers on Tuesday that the conflict is expected to end quickly.
The Senate is also advancing a joint resolution to help bring the war to a close, which could boost major digital tokens.
Bitcoin and Ethereum Price Movements
Bitcoin opened at $76,757.31 on Wednesday, a 0.3% drop from Tuesday's opening price.
However, it reversed losses and climbed to $77,428.64 by 7:00 a. m.
ET.
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The historical peak for Bitcoin stands at $126,198.07, reached on Oct. 6, 2025.
Its all-time low was $0.04865 on July 14, 2010.
Ethereum followed a similar pattern, opening at $2,110.07 on Wednesday, 0.9% lower than Tuesday's opening.
It later rallied to $2,128.62 by 7:00 a. m.
ET.
Ethereum's all-time high is $4,953.73, recorded on Aug. 24, 2025.
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Its lowest point was $0.4209 on Oct. 21, 2015.
Tax Implications for Crypto Transactions
Tax liabilities arise when a digital asset is sold for more than its purchase price. This also applies when exchanging one token for another.
The IRS treats converting Bitcoin to Ethereum as a taxable event if the value changes. These obligations are not settled at the moment of transaction.
Investors must report these activities on tax returns for the year the transaction occurred. Profits from selling crypto in 2025 must be reported during early 2026 filing.
The total tax depends on the filer's taxable income and filing status.
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The holding period also matters: assets held less than a year face higher rates, potentially altering the tax rate by 17% or more.
