August 18, 2021

SEC and CFTC will sit down at the negotiating table with market participants

 Bitcoin has worked out the $47,500 level several times over the past few days and bounced off it twice. Thus, for the time being, we can conclude that this level is too tough for buyers. In principle, "digital gold" has already risen in price very well in recent weeks even without overcoming this level. There were no visible and compelling reasons for the growth of bitcoin by $18,000. We believe that market participants, after the repression of miners in China, as well as the serious tightening of local legislation on the regulation of the cryptocurrency sphere, were afraid that legislation, in particular tax, would also be tightened in the United States. Ergo, they hurried to buy bitcoin coins before this happened. However, based on this factor, it is impossible to grow forever. Now, since the 50.0% Fibonacci level of $47,500 has not been overcome, we are waiting for a new prolonged drop in bitcoin quotes.

In the United States, Congressman Patrick McHenry and Congressman Glenn Thompson opposed the introduction of new legislation that encourages the creation of new jobs abroad, as well as suppresses innovation. These congressmen believed that the US Securities and Exchange Commission, as well as the Commission on Futures Trading Commission should not be given additional powers, since they may entail long-term consequences. Earlier, the head of the SEC, Gary Gensler, said that his organization could strengthen the regulation of DeFi and stablecoins. Congressman Patrick McHenry and Congressman Glenn Thompson invite representatives of the SEC and CFTC to sit down at the negotiating table with representatives of the digital asset market. According to McHenry and Thompson, this is the only way to achieve the prosperity of the digital asset market in the United States.

However, one potential problem for cryptocurrency investors is still looming on the horizon. And this problem is the new tax legislation in the United States, according to which almost every participant of the cryptocurrency market falls under the concept of "broker", which, according to experts, can seriously reduce the demand for cryptocurrencies. Or to provoke an outflow of investments abroad, to those countries where tax rates are lower or even absent. That is, the United States risks getting the same situation as with business. Since taxes are high in the United States, many companies have moved their business or its individual divisions to other countries where taxes are lower. It can also be the same with the cryptocurrency sphere. Why stay in the United States, buy bitcoin there, and pay the Tax Service, if you can buy bitcoin from anywhere in the world and not pay any taxes at the same time?

Technically, bitcoin continues to be in an upward movement on the daily timeframe and has twice worked out the level of $47,500, which is the minimum of April 26, as well as 50% of the movement from the absolute maximum of the value to the minimum of 2021. The quotes of bitcoin left the side expanding channel, but the confidence in its further growth did not become any more. Before overcoming the level of $47,500, we are again considering the option of falling to $29,700 or lower.