Bitcoin sits comfortably north of $40,000 after a rally propelled it beyond this key resistance mark. The first cryptocurrency by market cap even managed to break above $42,000, in its most solid attempt to reclaim new highs since May’s crash.
The bullish momentum has held for the past week, BTC’s price records a 24% profit in this period with the fear and greed index on the greed side after months in extreme fear. Dan Tapiero, founder and CEO of 10T Holdings, noted that achieving the rally has been hard.
Bitcoin, cryptocurrencies, and the entire industry have been receiving attacks from all over the world. Especially from the United States and China. These countries seem to rarely agree on something, Bitcoin is the exception. Tapiero said:
Cannot remember a time of so many attacks against Bitcoin and Crypto. From every angle…tax, regulatory, political etc. Insanely good price action in the face of a lot of bad news is very bullish. Bitcoin does not care. HODL, be long or get out of the way.
Even the most legitimate actions have been received with certain animosity from traditional financial institutions. Following El Salvador’s Bitcoin Law, the International Monetary Fund (IMF) warned other countries that the cryptocurrency “is not suitable as legal tender”.
The Central American country was negotiating a loan with the financial institutions. The talks apparently grew tense when Bitcoin was granted legal tender status. In an official blog, the IMF explained how this measure could have a “serious negative effect on financial and economic stability”.
Thus, the financial institutions seem to be sending a message, similar measures by other countries could impact their relationship with the IMF. The country that follows in the footstep of El Salvador is adopting a currency that, according to the IMF, is mostly used to “launder ill-gotten money, fund terrorism, and evade taxes”. Tapiero added:
BTC one of the great inventions of the past 50-100 years. Math and science are hard for most people especially when it upends the existing social order. US should embrace new technology. Fear of it will only lead to failure and decay.
Bitcoin Won The Week, But The Fight Continues
The main narrative that boosted Bitcoin to new highs is its capacity to be a hedge against inflation. Many companies acquired the cryptocurrency to protect themselves in an inflationary economic landscape. That narrative seems to be under attack.
In Asia, China banned BTC mining and has put additional pressure in an attempt to stop any crypto-related operations with their financial network. Experts speculated that the Asian giant could be trying to stop corruption, stop capital from exiting the country, and clear the field for the roll-out of its central bank digital currency (CBDC), the digital Yuan.
In the U.S. The outlook seems to be equally bleak, as two bills could completely change the dynamics in the Bitcoin and crypto market. As Bitcoinist reported, The Digital Asset Market Structure and Investor Protection Act was introduced by Representative Don Beyer (D) and the bipartisan Infrastructure bill. Both have been the subject of debate in the crypto community.
The U.S. Infrastructure bill would expand the tax code’s definition of a “broker”. As Jake Chervinsky, General Counselor at Compound Labs said this could include “nearly every economic actor” in the U.S. crypto industry even Proof-of-Work and Proof-of-Stake miners, and DeFi market participants. Chervinsky said:
The Tax Code requires brokers to comply with IRS reporting requirements. Most importantly, they have to give Form 1099s to their customers & file them with the IRS too. To fill out Form 1099s, brokers have to collect customer data including name, address, phone number, etc.
The legal expert highlighted that the bill could hurt the crypto industry by forcing it to comply with these regulations. Unlike previous occasions, this time the bill is “moving quickly through Congress” and “is highly likely to pass”. Chervinsky believes this legislation could be an existential threat to the Bitcoin and crypto-based sector.
12/ This is a deeply misguided provision that, if adopted, will do far more harm than good to US interests.
I'll give you my top five reasons why.
First, it defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.
— Jake Chervinsky (@jchervinsky) July 30, 2021