The co-founder of Cardano, Charles Hoskinson, recently compared the effect of the Internal Revenue Service's tax deadline on the cryptocurrency market to historical sell-offs that occur during tax season. Hoskinson made this analogy on social media, describing the situation where the market experiences a large sell-off before April 15 as taxpayers prepare to pay their taxes.

Recently, the cryptocurrency market has seen a decline in value due to external factors such as macroeconomics and geopolitical tensions. This has led investors to move their funds from risky assets, causing the market to struggle. The relationship between the tax deadline and the crypto market has been observed by market analysts, noting that crypto assets tend to drop around April 15.

Investors preparing to pay capital gains taxes from previous years tend to sell off stocks and crypto assets to raise cash, leading to a bearish trend in the market. This phenomenon has become more pronounced in recent years as traditional investors have entered the cryptocurrency space, impacting the market in new ways.

According to analyst Tom Lee from Fundstrat, the sell pressure in both the stock market and crypto market around tax time can be attributed to investors cashing out to cover their tax liabilities. This relationship between market movements and tax deadlines has been observed over the years, with investors adjusting their portfolios to meet their tax obligations.