Regulation is one of the most important factors affecting the price of Bitcoin. The rise of cryptocurrency has stopped whenever governments violate their policies and countries take a different approach to regulating bitcoin. For example, in November 2019, Bitcoin plummeted to record levels as China accelerated its crackdown on cryptocurrency businesses. Indian bank missed in cryptocurrency exchange
Nothing indicates more confusion about cryptocurrencies than ratings and new tax law updates from US regulators. The CFTC treats bitcoin as a commodity, and the IRS treats it as an asset. However, classification differences did not solve the underlying cryptocurrency tax problem.
“The problem is technical,” explains Perry Woodin, CEO of Node40, a software-as-a-service (SaaS) company for cryptocurrency tax filing.”You can’t calculate your tax liability for cryptocurrencies without sophisticated software.” According to Woodin, keeping track of the cost base and the date the software runs requires a “deep understanding” of how the blockchain works. “Recording transactions in an Excel spreadsheet is not enough to calculate tax liability (for cryptocurrencies),” he says.
There are also differences in state and federal responses to cryptocurrencies. While states have moved quickly to formalize rules for initial coin offers (ICOs) and smart contracts, the federal response to digital coins has yet to go beyond praising “working groups.” For example, FinTech startups in New York must acquire BitLicense, which has strict requirements for public offerings before ICO. Likewise, Arizona is aware of the smart contract.
Also Read: How to buy Binance (BNB) Coin?- Guide
Bitcoin changed slightly that day to $40,256 on the Bitstamp exchange. That’s about 30% higher than nearby’s low, but below the 200-day moving average. Rival cryptocurrency Ether was also under pressure, dropping 1% to $2,745.
Regulatory pressures increased
Bitcoin broke about $40,000, halting attempts to rebound from a sharp drop this week. Last month, the US Treasury Department called for new rules that require bulk transfers of cryptocurrencies to the Internal Revenue Service and Federal Reserve as cryptocurrencies at risk to financial stability. The warning came after Chinese financial institutions banned the use of cryptocurrencies for payments and settlements in the first week. Ether dropped 24% over the week and Bitcoin dropped 15%.
The sale spread on the stock exchange on Wednesday, particularly in high-risk encryption companies like Coinbase. Coinbase is down 10% this week. Edward J., Head of Equity Investments at Eaton Vance, said: “The fundamental common denominator of assets like cryptocurrencies and equities is the highly flexible central bank policy around the world and has leaked into the crypto markets combined with a passion for taking risks.