The world of cryptocurrencies is once again hit by regulatory tremors. Bitcoins recently took a 2% trading plunge, landing around $28,912. This came amidst a series of political and lawsuit shocks in the crypto ecosystem.
In a key development, the SEC launched a lawsuit against Hex creator Richard Heart, raising eyebrows by accusing him of selling unregistered securities worth a whopping $1 billion. The allegations, claiming misuse of funds and violation of securities laws, seemed to have a domino effect with the HEX price plummeting 20.36% in just three days.
The reverberations of the SEC’s assertive stance were felt beyond the Hex frontiers. A wave of anxiety swept as it suggested all crypto-assets, barring Bitcoin, could be in the security category. The BTC/USD slide today showed investors treading on thin ice, keeping a nervous eye on regulatory waves that could disrupt the market.
Add to this the political haze enveloping Bitcoin’s future. Republican player, Ron DeSantis, aspiring for the 2024 presidential hot seat, aired his determination to strike down President Biden’s perceived crackdown on Bitcoin, especially any efforts to bring in central bank digital currencies (CBDCs).
However, the brewing political instability with other candidates’ varying stands on cryptocurrencies is casting serious shadows on crypto-regulations. Democratic candidate Robert F. Kennedy Jr., for instance, has been reported to lean towards pro-crypto views. The surrounding uncertainty has likely tarnished the broader market sentiment and cranked up selling pressures on BTC/USD.
Throwing another curveball at the crypto enthusiasts, the IRS stepped into the limelight with a new edict (Revenue Ruling 2023-14). Hitherto, crypto-mining gains were subject to income and capital gains tax, with no specific guidelines for staking rewards. Now, U.S. taxpayers must add gross income from crypto staking rewards to their annual income. This new norm will apply once the investor obtains “dominion” or control over the tokens.
The crypto society has been seeing divided views on this, some correlating staking rewards with stock dividends. This development, triggering additional regulatory scrutiny, has made the crypto-staking realm and the service providers a soft target for federal regulators like the SEC.
This latest salvo from the taxman seems to have eaten more into the Bitcoin prices, sparking extra selling pressures. On conducting a technical look-see, Bitcoin’s trading pattern reflected stretched support around $29,000 and resistance near $29,500. With the price plummeting below $29,000 due to bearish trends, chances of further selling and a drop to $28,613 become plausible.
Despite a grim-looking BTC/USD, enthusiasts are setting their sights on the potential in the top 15 digital assets to look out for in 2023. While cryptocurrencies harbor significant risks, keeping the pulse on evolving trends might just steer one onto profitable currents. As always, exercise caution and do thorough research before navigating the crypto waters.
Source: Cryptonews
