TL; DR failed
- Digital currencies fell on Tuesday, with bitcoin hitting $ 60,000 and ether near its lowest level in November.
- Analysts attribute the massive market decline to the new tax reporting rules outlined in the Infrastructure Bill that Joe Biden signed on Monday.
- Another reason for this huge sale is China’s claims about mining and the continued repression of digital currencies in the country.
The digital currency market remained in the red on November 16th. The global market value of digital currencies has reached $ 2.67 trillion, down 6.98% in the last 24 hours. What caused this crypto bloodbath?
The price of Bitcoin has dropped by about 8% and is currently trading at $ 60,391. Ether also fell 10 percent to 10 percent per Coinmarketcap. While crypto is seen as a cover against inflation, crypto traders are facing widespread sales in the market today. Analysts see these possible reasons behind the crash.
Did the US Infrastructure Bill help the price of Bitcoin fall?
After months of negotiations, US President Joe Biden signed the $ 1 trillion infrastructure bill on November 15 at a White House ceremony. As previously reported by Ramzifa, the crypto community was previously dissatisfied with the bipartisan bill. However, now that it has been approved, it has started selling widely to traders.
The Infrastructure Bill contains specific regulations that may cause problems for digital currency traders. One of these rules obliges “brokers”, mainly exchange offices, to register their digital currency profits in a 1099 form with the IRS. “Brokers” must also disclose the names and addresses of their clients.
Because the definition of “broker” is so broad under IRS rules, crypto proponents were concerned that it would target miners, hardware developers, and others. However, in response to this concern, the US Treasury Department stated that it would not target any of these non-traders. However, the complex language of the invoice is important for customers who do not have access to complete information.
According to another speculation rule, businesses and exchanges must submit a report to the IRS for $ 10,000 or more in digital currency. By law, the file must include these details about the payer – their name and Social Security number. If he does not fill in the mentioned specifications, it will be considered a crime in terms of exchange.
The House Democrats’ proposed package of taxes and fees makes digital assets subject to two anti-misuse laws that already apply to stocks and other securities. This change limits the tools of crypto investors to protect against potential losses and reduces their capital gains tax.
China suppresses digital currencies
Attacking crypto is nothing new for Chinese officials. However, the country’s war with bitcoin and digital currencies in 2021 took another sharp turn when they came up against miners, blaming them for everything, including wasting energy on coal mining accidents. According to the reports, Meng Wei, spokesman for the National Development and Reform Commission (NDRC), told a news conference that the NDRC intends to regulate bitcoin mining on an industrial scale and any involvement of government businesses in the activity.
Digital currencies have driven bitcoin and crypto miners and exchanges out of the country. Some companies that have moved from China include Huobi, Binance, BTC.com and Bitmain. China’s withdrawal from digital and mining currencies can also be a big reason for selling in the market.
Analysts point out that the price of bitcoin has doubled this year and ether has almost doubled. Vijay Ayar, President of Asia-Pacific with Luno Ramzarz Exchange in Singapore, told Bloomberg:
It will be unusual to continue moving upwards without correction … We are witnessing a healthy retreat after a long rally.
Vijay Ayar, Vice President, Asia-Pacific and Global Development – Luno
What do the new bitcoin wallets mean?
Despite the current influx of falling prices, market experts are still hoping for price correction. It is estimated that $ 350 million has been lost in the current collapse of digital currencies, and almost all traders are hoping to recover their lost investments by May 2021. However, according to Glassnode, a set of new wallets has been created that holders interested in making a profit with their bitcoins
What is causing the decline in the price of digital currencies? Please visit Twitter and vote .. Like, share, retweet.
– Ramzifa (@CPOfficialtx) 16 November 2021