The U.S. House of Representatives has passed a $1.2 trillion infrastructure package that includes a provision for the crypto industry. The bill, which was passed in a 228-206 vote and will now be sent to President Biden’s desk for approval, includes a clause that would expand the definition of “broker” in the tax code to […]
The post House Passes Massive Infrastructure Bill With Crypto Provision appeared first on The Daily Hodl.
Congress has passed the Biden administration’s bill aimed at improving infrastructure, fighting climate change, and bolstering social services. The $1.2 trillion infrastructure bill, which also expands the definition of a broker, awaits U.S. president Joe Biden’s signature after passing with a vote of 228–206 on Friday. Bipartisan Infrastructure Bill Passes to the Tune of $1.2 […]
From bans to bills, the FUD is strong for Bitcoin and crypto this week, but traders are overwhelmingly optimistic about BTC price action.
Bitcoin (BTC) is at the start of another week with China's latest "ban" behind it — but its next "FUD" story is already brewing.
The United States' infrastructure bill is back on the table, with this week likely to see a definitive vote on what could shake up cryptocurrency businesses.
At the same time, fundamentals and on-chain metrics alike continue to be more bullish than ever, and traders are betting on — at worst — a moderate price dip to a floor no lower than $36,000.
What are the odds? Cointelegraph takes a look at five things that could move the markets in the coming week.
The macro narrative switches from China to the United States this week as lawmakers decide the fate of the so-called “infrastructure bill.”
H.R.3684, fresh from Senate approval, should see a final vote on Monday — despite rumors that it may yet be delayed.
The bill includes a contentious description of a “broker,” one which could have far-reaching implications for U.S. crypto businesses. Efforts are still underway to change its language, with figures such as Wyoming senator Cynthia Lummis and advocate Caitlin Long leading the way.
The current text describes a broker as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
.@SenLummis just gave a big shout-out to Sen @RonWyden for their partnership opposing the broad defn of “broker” in the infrastructure bill—a relationship she said will matter to our industry in future too since he’s chair of the tax writing committee in the Senate. #WyoHackathon https://t.co/QRSzn1ilqH
— Caitlin Long (@CaitlinLong_) September 25, 2021
In total as of Sept. 27, the bill has received 539 amendments.
While potentially a thorn in the side of the local crypto industry, H.R.3684 arguably matters little to seasoned Bitcoin hodlers.
Nonetheless, on the back of the latest China “ban” debacle, market sentiment is sensitive to “FUD” stories from any quarter.
“Bitcoin is bipartisan. Digital assets are apolitical,” Senator Lummis summarized on Twitter ahead of voting day.
It’s a familiar tale for BTC spot price action this Monday as BTC/USD returns to $44,400.
That heralds the start of a resistance level, which ultimately sparked rejection last week after the pair briefly passed $45,000.
So far, this attempt to break out has not been much different with $44,000 failing to hold at the time of publishing.
Nonetheless, compared to forecasts of a return to the mid-$30,000 range coming as late as Sunday, the latest progress is refreshing.
“I'm expecting a green week for Bitcoin,” Cointelegraph contributor Michaël van de Poppe summarized late Sunday.
The weekly close, a source of contention in recent days, didn’t disappoint, coming in at $43,144 — above the minimum cut-off points that some traders highlighted.
Trader and analyst Rekt Capital had demanded a $43,600 closing price, something which failed to materialize on time but came hours later.
“BTC continues to be sandwiched by the Pi Cycle 111-day MA support and this immediate red resistance area,” he added in further comments.
“This price compression is indeed forming a clear market structure here, perhaps an early-stage Ascending Triangle.”
It’s all smiles for Bitcoin network fundamentals for yet another week running as estimates call for a sixth consecutive difficulty increase.
Following last week’s fifth increase in a row — a rare feat in itself — data suggests that in eight days’ time, Bitcoin will seal a further upward difficulty readjustment. That would be its first six straight increases since mid-2019’s seven.
It’s not just difficulty — the hash rate is now at around 145 exahashes per second (EH/s) and just 23 EH/s away from all-time highs.
The stats are testament to the conviction of miners, as well as to the extent of their comeback since China’s mass exodus just four months ago.
On the consumer side, the story is no less impressive. The Lightning Network, fresh from its El Salvador adoption success story, is nearing 3,000 BTC capacity. Since the start of 2021, that capacity has nearly trebled.
“Public Lightning Network capacity just broke 2,900 BTC. Over 400 BTC has been added in the last 10 days,” investor Kevin Rooke commented alongside an accompanying chart.
“Find me a better looking chart, I'll wait…”
Lightning constitutes a so-called “Layer 2” protocol, settling BTC transactions off-chain instantly and for next to zero cost.
Last week, Twitter became the first major partner of payment gateway Strike to implement Lightning Network tipping.
Crypto market investors en masse have cold feet — and sentiment indicator the Crypto Fear & Greed Index shows just how nervous they are.
Late last week, the Index, which takes a basket of factors to determine sentiment, dipped to its lowest levels since mid-July — before BTC/USD began its run to $53,000.
This time, however, it is $40,000, not $30,000, which is the price focus in play.
As of Monday, the Index is slightly higher at 27/100 — still firmly within the "fear" zone.
In institutional circles, negative funding rates meanwhile serve to provide cautious optimism about the potential for sustained upside.
As analysts often note, just when everyone is leaning bearish provides an ideal moment to long BTC and trip up the majority of speculators.
Those words, and other excerpts from English singer Rick Astley’s 1987 song of the same name, have become a meme for Bitcoiners.
Related: Top 5 cryptocurrencies to watch this week: BTC, AVAX, ALGO, XTZ, EGLD
They describe the mindset — and investment habits — of hodlers who never sell their BTC, no matter the circumstances.
Hodling through any storm is a galvanizing force among long-time market participants, but right now, the “Rick Astley” investor may even be pointing the way to new all-time highs.
As noted by analyst Willy Woo, those Rick Astleys have hodled long and hard, and historically, the good times are now set to roll.
“Bitcoin has entered the Never Gonna Give You Up phase of the Astley Cycle,” he argued alongside an amusing chart comparing Rick Astley buying habits to BTC price action.
The effects may yet come sooner than many imagine. Against a sudden $2,000 uptick on Sunday, Van de Poppe called time to “party” across Bitcoin and altcoins.
Let’s party with the markets again.
— Michaël van de Poppe (@CryptoMichNL) September 26, 2021
Good bounce of #Bitcoin.
More broadly, strong hands have taken control of an increasing segment of the BTC supply, Cointelegraph reported, with this figure reaching its highest since October 2020 this month.
While Speaker Nancy Pelosi expects the infrastructure bill to pass, the Democrats are divided on whether to pass the legislation before the terms of a follow-up $3.5 trillion package is finalized.
According to Reuters, Pelosi expressed confidence the legislation will pass upon announcing the date on Sunday, Sept. 26, stating: “Let me just say that we're going to pass the bill this week." Earlier that same day she reportedly indicated she would not bring the bill to a vote unless she believed it would pass.
Speaker of the U.S. House of Representatives Nancy Pelosi announced that the house will vote on whether to pass the Biden administration’s controversial $1 trillion bipartisan infrastructure bill on Thursday, Sept. 30.
“Tomorrow, September 27, we will begin debate on the Bipartisan Infrastructure Framework on the Floor of the House and vote on it on Thursday, September 30.”
Pelosi noted the vote is slated to take place the day before the Surface Transportation Reauthorization Act of 2021 is set to expire.
While the legislation passed through the Senate with bipartisan support on Aug. 10, provisions contained in the bill mandating stringent counterparty reporting requirements for decentralized network validators and software developers who would not possess the information needed to comply.
Although the bill passed on Aug. 10, an amendment put forward by Senator Pat Toomey that saw bipartisan support from Senators Cynthia Lummis, Rob Portman, Mark Warner, Kyrsten Sinema and Ron Wyden sought to exempt validators, developers and node operators from the law.
To the chagrin of the crypto community, the lone objection of Alaman Senator Richard Shelby stopped the amendment from being added to the legislation.
Related: It's now or never — The US has to prepare itself for digital currency
However, the infrastructure bill faces opposition from some lawmakers who believe it should be held back until negotiations have ended regarding the follow-up $3.5 trillion social welfare and climate bill.
With the price of the second bill perturbing some Democrats, Pelosi indicated it is “self-evident” that the bill could be reduced in scope.
“We are now working together with the Senate and the White House on changes to this historic legislation,” she said. “[$3.5 trillion] was the number that was sent to us by the Senate and by the president. Obviously with negotiation, there has to be some changes in that the sooner the better, so that we can build our consensus to go forward.”
The Biden administration is reportedly pushing to include global crypto data sharing rules in the $3.5 trillion budget package. The Treasury wants crypto businesses to report information on foreign account holders “so that the U.S. can share information with global trading partners.” Treasury Wants to Impose More Crypto Rules The U.S. Treasury is reportedly pushing […]
The US infrastructure bill is moving a step closer to passing in Congress with zero changes to controversial language affecting the cryptocurrency industry. After a short standoff, House Democrats were narrowly able to pass a procedural motion allowing lawmakers to work on their version of the multi-trillion-dollar bill. Democrats agreed to push back the deadline […]
The post Infrastructure Bill Inches Closer to Law Without Amendments to Crypto Provisions appeared first on The Daily Hodl.
The House of Representatives will vote on the controversial infrastructure bill without amendments to its cryptocurrency provisions by Sept. 27.
The controversial $1 trillion infrastructure bill will see a vote in the U.S. House of Representatives without any amendments to the crypto tax provisions by Sept. 27.
The vote was agreed to after the House narrowly approved the Democrats’ $3.5 trillion budget blueprint in a vote of 220 to 212. Despite some initial pushback from moderate Democrats, the dissident voters were swayed after House Speaker Nancy Pelosi committed to pass the bill before Sept. 27. Pelosi stated:
“I am committing to pass the bipartisan infrastructure bill by September 27. I do so with a commitment to rally House Democratic support for its passage.”
In late July, last-minute cryptocurrency provisions were added to the infrastructure bill in a bid to raise a further $28 billion through expanded tax obligations for the crypto sector.
However, the loose language contained in the bill sent shockwaves across the crypto community and analysts believe it will impose stringent third-party reporting requirements on network validators and software developers who would be unable to comply with the newly mandated obligations.
The Senate appeared poised to pass compromise amendments to the bill that would specifically exempt network validators and software developers in early August, but owing to one dissenting Senator the legislation ultimately passed through the Congress without alteration.
However, a Treasury Department official has sought to offer the crypto industry a glimmer of hope, telling CNBC that reporting requirements will not be imposed on entities that are unable to comply.
The anonymous official indicated that the Treasury intends to conduct detailed research to understand which actors within the crypto sector can adhere to the new reporting requirement.
However, the official's comments were of little comfort to Coin Center executive director Jerry Brito, who emphasized that the bill’s language currently requires reporting on transfers as well as trades. Brito also highlighted that any crypto transaction valued at more than $10,000 will need to be reported to the Internal Revenue Service alongside personal information on the counterparty.
“I appreciate that it seems to be Treasury’s intention to get this right [...] but please don’t accept the narrative that folks in crypto are overreacting about this provision,” he added.
Related: Coinbase warns infrastructure bill’s crypto provisions could impact 20% of US population
Commenting on the lack of amendments to the infrastructure bill, executive director of The Blockchain Association, Kristin Smith, described the events as “unfortunate but unsurprising.”
“However, this is not the end of the process,” she stated, adding:
“The Blockchain Association, our 46 member companies and the newly-energized, nationwide crypto community will rededicate our energy to supporting technology-neutral, pro-crypto legislation and regulation — on this specific tax issue as well as broader crypto policy.”
General counsel to Compound Labs, Jake Chervinsky, has warned that the Treasury Department wants to “capture” the DeFi sector through the crypto provisions added to the infrastructure bill.
The last-minute cryptocurrency provisions added to the U.S. infrastructure bill sought to “capture DeFi,” argues Compound’s general counsel Jake Chervinsky.
Appearing on the Bankless State of the Network podcast on August 17, Chervinsky — who is also DeFi Chair of the Blockchain Association — said the industry had been “blindsided” by the infrastructure bill’s crypto tax provisions which were announced just nine days prior to when it was expected to pass through the senate.
While Chervinsky seemed willing to give most elected officials the benefit of the doubt, noting that previous discussions surrounding the infrastructure bill had “nothing to do with crypto,” he attributed more sinister motives to the Treasury Department’s role in influencing the legislative process.
Conceding he may have donned a “tin-foil hat,” Chervinsky argued that the Treasury Department was looking for an alternate way to invoke the harsh reporting requirements former Treasury Secretary Steve Mnuchin had sought to impose on self-custodied crypto wallets.
“This is all about DeFi [...] This is the Treasury Department trying to work out how to get jurisdiction over DeFi [...] and also expand its warrantless surveillance over a peer-to-peer financial system.”
Cherversinky stated he was informed that the Treasury Department had initially opposed exempting network validators and software developers from stringent third-party reporting requirements under the bill as it was concerned the altered legislation would not “adequately capture DeFi.”
“That’s why we couldn’t get the language changed to only capture the centralized exchanges,” he concluded:
“We found out very quickly that it wasn’t just a senator’s misunderstanding [...] The Treasury Department had played an important role in drafting the language and also [ensuring] that any revision we proposed was going back to the Treasury Department for their approval or rejection.”
Chervinsky’s understanding is that Treasury feared the industry would argue that DEX liquidity providers and other DeFi participants are involved in validating transactions and should therefore be exempted from the regulation.
“As I understand it, that’s why we then got a competing amendment that specifically said the exemption is only for Proof-of-Work miners,” Chervinsky added.
“The idea that you would carve out an exemption for what is viewed as the really bad, horrible climate change-causing, ocean-boiling Proof-of-Work mining, but then not have that exemption for Proof-of-Stake validators just made absolutely no sense.”
Despite the Treasury Department backing down on its position after realizing it could not “steamroll the industry,” Chervinsky emphasized he was concerned unelected Treasury officials have too much influence on the legislative process.
“The idea that secretly, behind the scenes, it isn’t senators we’re negotiating with [...] it’s some unknown bureaucrat buried in the Treasury Department — to me, that’s a deeply troubling situation to be in,” he said.
But Chervinsky celebrated the achievements of the crypto lobby in pushing back against the provisions:
“The entire industry basically without exception banded together to fight this [...] Yes, this bill is a threat, but more important [...] was how effectively the industry was able to rally and defend itself in D.C.”
Crypto trader and investor Scott Melker, also known as “The Wolf of All Streets,” expects the price of bitcoin to hit new all-time highs by the end of the year. “I would not be surprised at all to see bitcoin trading in six figures within the next six to 12 months, or ethereum even pushing […]
