Bitcoin Stumbles on Indonesian Tax Hike — Traders Flee Markets

A sudden tax hike on crypto transactions in Indonesia has shaken regional trading activity, with traders pulling liquidity from foreign exchanges. Bitcoin price reacted swiftly, slipping as market participants adjusted to the new 1% levy on offshore platforms.

Indonesia has officially implemented a 1% tax on crypto transactions conducted through foreign exchanges, a fivefold increase from the previous 0.2% rate. The policy, announced by the Directorate General of Taxes in late September, is part of the government’s broader strategy to tighten regulatory oversight and capture more revenue from the booming digital asset sector.

The move immediately rippled across Southeast Asia’s crypto ecosystem. Local traders, who often arbitraged price gaps between regional platforms like Indodax and major global exchanges such as Binance, Bybit, and OKX, found their margins evaporating overnight.

According to data shared on CoinGlass, trading volume in Indonesian-based exchanges dropped by nearly 22% within the first 48 hours of the policy’s enforcement. On X (formerly Twitter), several local analysts warned that liquidity fragmentation could make Indonesia less competitive in the broader crypto trading arena.

Economists argue that while the new tax may curb speculation, it risks driving sophisticated traders offshore through VPNs and decentralized exchange protocols. As one post from @CryptoNusantaraID put it:

“The market will adapt — but every restriction pushes volume where regulators can’t see.”

Meanwhile, Bitcoin itself showed a mild correlation to the move, falling 3.1% within the same period, hovering near $98,700 at press time.

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