Bitcoin moves past $50,000 after US Treasury extends olive branch
Data from CryptoCompare shows that the price of Bitcoin moved upward throughout the week, despite enduring an initial drop to the $44,000 mark. The cryptocurrency quickly recovered from it and is now above $50,000.
Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, started the week at $3,300 and move down to test the $3,000 mark throughout it, but after its support was successfully held it moved back to where it started.
This week, the US Treasury Department seemingly extended an olive branch to the cryptocurrency space by reportedly revealing it would be ignoring how the infrastructure bill defines a cryptocurrency broker. An unnamed department official reportedly noted the Treasury won’t go after entities that don’t meet the tax code’s “broker” definition.
More guidance on the matter is set to come in the near future, and could soothe the crypto industry’s fear that the Senate’s efforts to tax “any service effectuating transfers of digital assets on behalf of other persons” could affect crypto miners and developers and force industry participants to move out of the country.
Some in the industry point out that the bill’s definition of a broker could force some entities to report information they do not have the ability to collect. The Treasury statement reportedly provides a workaround by limiting the bill’s scope to those classified as brokers under the tax code.
The infrastructure bill’s definition of a broker and its potential implications haven’t seemingly slowed down cryptocurrency adoption both in the United States and outside of it. American retail giant Walmart showed it’s on the hunt for a cryptocurrency product lead, according to a job ad posted on the company’s LinkedIn profile. The ad says the firm is “seeking a visionary leader” for the role.
The person would create a cryptocurrency strategy for the store. The ad says they would be “responsible for developing the digital currency strategy and product roadmap”.
On top of that, both Wells Fargo and JPMorgan registered a Bitcoin fund with the US Securities and Exchange Commission (SEC). They have partnered with the New York Digital Investment Group (NYDIG) on the offerings.
Both megabanks have been slowly embracing cryptocurrencies, with JPMorgan cautiously recommending investors consider adding BTC to their portfolios in small allocations. They have also been hedging their bets by investing in crypto start-ups.
Filings with the SEC also revealed that BlackRock has invested more than $380 million in two Bitcoin mining firms, and now owns 6.71% of Marathon Digital Holdings (MARA) and 6.61% of Riot Blockchain (RIOT).
Nasdaq-listed cryptocurrency exchange Coinbase has, this week, received approval from its board to purchase in excess of $500 million worth of cryptocurrency for its balance sheet, and will now be investing 10 per cent of all its future profits in cryptocurrency while expecting “this percentage to keep growing over time”.
Several cryptocurrencies other than Bitcoin have been seeing their value explode over the last few weeks, namely Ethereum competitors using smart contract technology. So far this month, ETH competitors SOL, ADA, and DOT went up 98%, 60%, and 42% respectively, compared to ETH’s 19%.
The price action is coupled with notably higher volume growth that suggests Ethereum’s market leadership in decentralised applications is all but certain. Ethereum is being outperformed even after its major upgrade that introduced a burning mechanism. That mechanism has burned more than $250 million worth of ETH.
Coinbase’s move comes after it was revealed the company has stockpiled $4.4 billion in reserves to keep growing and investing even if another “crypto winter” hits the markets.
White Hat hackers prevent $350 million theft
A group of ‘white hat hackers’ led by crypto investment firm Paradigm’s research partner Sam Sun prevented a $350 million exploit on SushiSwap’s token fundraising platform Miso after discovering and fixing a bug in under five hours.
Sam Sun and his colleagues Georgios Konstantopoulos and Daniel Robinson – all from Paradigm – reached out to the SushiSwap team to alert them about a vulnerability on the Miso platform. The vulnerability reportedly allowed an attacker to bid on auctions for free.
Despite the efforts of white hat hackers and security researchers, these incidents haven’t disappeared from the cryptocurrency space. This week Japanese cryptocurrency exchange Liquid has suspended asset deposits and withdrawals after its hot wallets were hacked in a security breach.
Liquid pointed to four addresses believed to be associated with the hacker. These were addresses for BTC, ETH, TRX, and XRP. While the exchange did not reveal the extent of what was stolen, the addresses received $80 million in cryptoassets.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies. Featured image via Unsplash.