This Tuesday morning, the value of Bitcoin fall nearly 1.70% to $28,900 in the midst of important developments that bring new new uncertainties in the cryptocurrency landscape. Indeed, the SEC complaint against Richard Heart, Hex mastermind for $1 billion unregistered securities sale raises regulatory concerns again.
Additionally, the political arena adds further uncertainty, with a Republican candidate pledging to end, if elected, President Biden’s “War on Bitcoin”. Finally, the IRS has introduced a new requirement requiring US taxpayers to report crypto-staking rewards as gross incomefurther impacting market sentiment and contributing to recent price volatility.
SEC Files Lawsuit Against Hex Creator Over Unregistered Securities Sale
The current fundamentals of the BTC/USD pair indicate a drop in the value of Bitcoin as regulatory issues persist in the market. The recent SEC complaint against Richard Heartthe creator of Hex and Pulsechainhas raised concerns among investors about possible crackdowns on cryptocurrency assets.
The complaint accuses Heart of having violated securities laws and misappropriated fundswhich resulted in a 20.36% drop in HEX price over the past three days. Investors are in uncertainty and sell in the market due to the Announced SEC Stance on Consideration of All Crypto Assets Except Bitcoin as Securities. This also leads to a drop in the BTC/USD pair today, as market participants remain cautious about possible new regulatory developments.
Republican candidate pledges to end President Biden’s so-called ‘war on bitcoin’
The decline in BTC is also occurring alongside political debates over digital currencies. So, Ron DeSantis, Republican candidate for the next presidential race of 2024promised to stop to what he considers to be “Bitcoin attacks” from President Biden and propose ban central bank digital currencies (CBDC) if he becomes president, as proposed by another parliamentarian.
The current position on cryptocurrency regulation is source of uncertainty and could have a negative impact on investor sentiment. In addition, the positions of other candidates on cryptocurrencies also affect the general sentiment of the market. For example, the Democratic candidate Robert F. Kennedy Jr. expressed pro-crypto views. In light of these unclear political developments, BTC is under selling pressure as the market does not like uncertainty and takes a dim view of politicians meddling in the future of cryptos.
Important Information for US Taxpayers: Crypto Staking Rewards Must Be Declared as Gross Income for Taxes
The sUS tax authorities, the IRS, recently announced a new ruling (Revenue Ruling 2023-14) stating that US taxpayers are required to report any income from crypto staking as gross revenue in the year they gain control of the tokens. If you receive cryptocurrency to validate transactions on proof-of-stake blockchains, either directly or through centralized exchanges, then you should include the fair market value of the rewards in your annual income.
The tax authorities thus consider that you take control as an investor, when you have the “hand” on the tokens, which means you can sell, trade or dispose of them. Previously, the IRS only subjected crypto mining rewards to income and capital gains tax, with no specific provisions for staking rewards. But now, IRS ruling is that crypto staking should be treated the same as stock dividendsalthough experts have mixed reactions to this.
This new rule coincides with increased regulatory scrutiny of crypto-staking service providers and exchanges by federal regulators like the Securities and Exchange Commission and that contributes to further additional selling pressure in the Bitcoin market.
Bitcoin Price Prediction
Technical analysis shows that Bitcoin is still trading within a fairly tight range. He faces a resistance near the $29,500 level and has support near $28,600. Additionally, there are a number of technical indicators that indicate a negative outlook for bitcoinsuch as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).
However, the recent bearish move has seen the price dip below $29,000 which could lead to further selling and a potential drop to $28,613. On the positive side, Bitcoin may rally towards resistance around $29,000 or $29,500 if the current trend is reversed.
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Disclaimer: This linked article presents the views of crypto industry players and is not part of the editorial content of Cryptonews.com