Investor apprehension of cryptocurrency purchasing is intensifying amid new threats of tax reporting and investment risk in the market. There is the pressure of compliance with a new tax form. Cryptocurrency exchanges should now record user gains in a different manner before the Internal Revenue Service.The altercation comes at a turbulent crypto market collapse. Falling prices and tightening of liquidity are already the reality for many traders. Additional documentation is adding pressure and disheartening new purchases.The fear of costly errors is greater for investors than lost rallies. This fear is an indication of broader crypto fear and market withdrawals on an international scale. The complexity of taxes has become the determinant of trading behaviour, as price swings.The danger can be pointed out by a simple example. Assume an investor purchased Bitcoin for fifty thousand dollars. It was sold by them over a year later at a higher price of one hundred thousand dollars.Tax is 7,500 at a 15% rate of capital gains. In the absence of the cost basis, the IRS can deal with the gain as 100,000 dollars. That would create a $15,000 bill. The difference is in effect doubling the amount of tax to be paid.The results of such discourage speculative trading. A good number of investors no longer trade, but own. The behaviour makes the volumes softer and the price recovery slow.Price weakness is hurdled by tax risk. Bitcoin has reached high records in the previous year. The beginning of 2026 was characterised by steep falls. Those investors who sold previously have already suffered the losses.That would be worsened by the emergence of the unexpected taxes. Retail players are thus reluctant to go back. This trend supports crypto fear and market withdrawals. The institutional traders also require more transparent compliance frameworks.There is a lack of confidence in the situation where regulations are not complete. Markets are concerned with certainty and not abrupt commitments.Investment experts recommend that investors keep a clear record of the transactions. All purchase prices are to be kept in a safe place. Transfers of wallet also need to be monitored. The specialised tax software can help minimise the errors.Forms will be sent by Tuesday, Feb. 17, through exchanges, according to the IRS. Early action will eliminate hasty filing. Closed records reduce the probability of exaggerated taxes.Better transparency can facilitate a decrease in the fear of buying cryptocurrency in the long run. So far, compliance is the centre of all trade decisions.