Bitcoin drops to $ 60,000 after China fires yet another warning against cryptocurrencies and Biden’s $ 1 trillion infrastructure bill becomes law

China and the United States
China and the United States

  • Bitcoin fell 9% against $ 60,000, pulling down other cryptocurrencies like ether and dogecoin.
  • US President Joe Biden signed a comprehensive bill on infrastructure that includes strict rules for cryptocurrency.
  • Meanwhile, media reports said China had warned state-owned companies against cryptocurrency operations, adding more pressure.
  • Sign up for our daily newsletter, 10 things before the opening clock here.

Bitcoin tumbled to $ 60,000 on Tuesday after being hit by a combination of bearish factors, including the US $ 1 trillion infrastructure bill, which brings stricter rules on crypto-trading taxes and a new warning to Chinese companies about mining from Beijing.

Bitcoin fell by more than 10% at one point and fell to below $ 60,000 for the first time since late October. It last traded at around $ 60,604, marking a decline of almost 8% over the last 24 hours at. 06:58 ET.

President Joe Biden’s expense bill is primarily to upgrade the United States public construction system. But it also comes with some new rules for crypto brokers, who now have to report transactions worth over $ 10,000 to the IRS. Critics have said the term “broker” is too vague, and the new rules may mean that other market participants, such as miners, traders and node operators, may also have to comply with them. Tax increases on digital assets could raise $ 28 billion, according to the New York Times.

Sens. Ron Wyden of Oregon, Patrick J. Toomey of Pennsylvania, and Cynthia Lummis of Wyoming had tabled an amendment to the term broker so that it would only apply to persons who fit this description in August, but it was rejected.

“This legislation is expected to have an indirect impact on the industry as service providers may start charging higher fees to compensate for the taxes imposed on them,” said Phil Gunwhy, partner at Blockasset.co, a non-fungal token platform. .

Crypto-mining is generally more associated with bitcoin, but a steep slide in the largest token weighed heavily on smaller rivals. Ether, dogecoin and solanas sol-token all fell between 8.50-9.5% on the day, according to Coinmarketcap.

“Most altcoins have a strong correlation with bitcoin,” Gunwhy said.

China renewed its tough stance on the crypto market with a new warning to state-owned enterprises to stop mining tokens as the government seeks to clean up the sector and curb its carbon footprint. CNN reported that Beijing is considering measures such as to raise electricity prices for any institution that has broken the rules.

To increase pressure on the crypto market on Tuesday, a surprisingly cautious interview from Twitter’s CFO Neg Segal, who told the Wall Street Journal that investing the social media company’s cash in cryptocurrencies “does not make sense right now” and said volatility was a concern.

Twitter CEO Jack Dorsey is a well-known crypto fan, and his payment company Square owns digital assets.

Finally, the strength of the dollar further undermined the crypto market as it hit new 16-month highs against a basket of major currencies.

“This can affect bitcoin because it is a risky asset, as stocks and commodities tend to fall when the dollar rises,” said Marcus Sotiriou, sales trader at GlobalBlock.

However, Sotiriou said he did not expect the fall of bitcoin to last long.

“Provided this is not the end of the bull market, it may not be long before this correction is over,” he said.

Read the original article on Business Insider

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