Bitcoin Price Resilient in the Face of Political Firestorm

The bitcoin price has reclaimed the USD 45K level in the face of opposition by U.S. lawmakers. Bitcoin’s resilience is impressive considering the future of the U.S. cryptocurrency industry hangs in the balance.

Now that the size of the cryptocurrency market has ballooned to more than USD 1.8 trillion, policymakers can no longer stick their heads in the sand. They are seemingly looking to capture some of the windfall for their coffers through what’s being dubbed a “crypto tax.”

Crypto Battle

In a chain of events that remains fluid, U.S. Senators Rob Portman, Mark Warner and Kyrsten Sinema want to include a plan in a USD 1 trillion infrastructure bill that takes aim at crypto market participants — chiefly software developers. Their amendment threatens to stifle tech innovation in the country. The infrastructure bill with the amendment stands to generate tens of billions of dollars over the next decade in crypto-related taxes.

If the bill passes with the Portman/Warner/Sinema amendment, U.S.-based developers would likely take their talent to more crypto-friendly jurisdictions rather than face a crypto tax that hits them while leaving other market participants unscathed.

Fighting Back

Market leaders have banded together and have been calling on the industry to contact their respective Senators to stop the damaging bill from passing. Tesla CEO Elon Musk has chimed into the debate saying “this is not the time to pick technology winners or losers in cryptocurrency technology” and calling the proposed bill “hasty legislation.”

The cryptocurrency industry also has a group of U.S. Senators in its corner. Senators Cynthia Lummis, Pat Toomey and Ron Wyden have already architected a crypto plan that won the support of market participants, including Kiss frontman Gene Simmons.

In order for their amendment to win, they must strike a deal with the anti-crypto Senators, get a vote and gain unanimous support in the Senate. The trio of lawmakers behind the more crypto-friendly amendment is “working hard to get a deal,” Senator Wyden tweeted.

We’ve been working hard to get a deal. I don’t believe the cryptocurrency amendment language on offer is good enough to protect privacy and security, but it’s certainly better than the underlying bill. Majority Leader Schumer says he won’t block a unanimous consent request on it

— Ron Wyden (@RonWyden) August 9, 2021

I support the Wyden-Loomis-Toomey amendment re crypto currencies and DeFi.

— Gene Simmons (@genesimmons) August 7, 2021

Meanwhile, a rising bitcoin tide is lifting all boats as the broader cryptocurrency market trades in the green as well. The cryptocurrency industry has a knack for drowning out the noise and focusing on building despite the headwinds, regulatory or otherwise.