Hong Kong Crypto Regulations and IRS Access to Coinbase Data: Impact on Bitcoin Market

Intricate cityscape reflecting Hong Kong's skyline, Bitcoin symbol in turmoil amidst stormy clouds, significant IRS and Coinbase data access implications, somber mood, chiaroscuro lighting, fluctuating Bitcoin value, worldwide economic influence, traders actively observing market.

As the Hong Kong crypto regulatory regime was launched on June 1, Bitcoin’s price experienced a 2% tumble, extending its Wednesday downturn and marking the first time this year that the cryptocurrency closed a month 10% lower. Several factors seem to be contributing to the current crypto market selloff, including macro, technical, and regulatory challenges. One such regulatory hurdle involves the US Internal Revenue Service (IRS) gaining access to Coinbase user trading data.

Whales and investors have been offloading and moving their Bitcoin and crypto holdings off Coinbase amidst the recent court ruling. In the past few days alone, these investors have moved over $1 billion in Bitcoin off the platform. Additionally, the increasingly unfavorable crypto landscape and regulatory challenges have led to a significant drop in BTCUSDT open interest, as traders have been liquidated or have closed their positions. Consequently, BTC longs liquidation continues to rise, potentially driving the price below $25k.

Recent developments in worldwide economic policymaking have had an impact on Bitcoin as well. The US House passed the Biden-McCarthy Debt Ceiling deal, which now heads for US Senate voting prior to the debt fault deadline of June 5. Some Senate members, including Senator Bernie Sanders, have expressed opposition to the deal. In other news, Bank of Japan Governor Kazuo Ueda proposed raising interest rates in response to increasing inflation, while US Federal Reserve officials discussed pausing in June and raising rates later due to an economic slowdown in the US. The CME FedWatch Tool indicates a 63% probability of a pause, an increase from last week’s projection.

However, the global stock market witnessed a climb on Thursday, driven by positive sentiment surrounding the debt ceiling deal and the anticipated US Fed pause in June. The US Dollar Index (DXY) remains above 104, which increases selling pressure on Bitcoin’s price.

With its 2% drop in the last 24 hours, Bitcoin’s price currently stands at $26,900. The 24-hour low and high are recorded at $26,671 and $27,346, respectively, and there’s been a spike in trading volume within the same timeframe, indicating that traders are keenly observing the market.

In conclusion, while various factors affect the crypto market, such as regulatory challenges and global economic developments, the impact of these shifts may require vigilant market research from investors before making decisions in the constantly evolving world of cryptocurrencies.

Source: Coingape

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