Bitcoin Strengthens After Cautiously Optimistic U.S. Senate Hearing: Week in Review Feb. 13
The price of bitcoin experienced another volatile week as fears after more regulatory crackdown grew ahead of the U.S. Senate hearing. However, bitcoin managed to regain value again after dropping to a low of $6,111 on Tuesday and closed the week just above the $8,000 mark.
Bitcoin’s price stabilized thanks to a cautiously optimistic tone about cryptocurrencies during the U.S. Senate hearing named “Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission”.
At the hearing, the heads of the SEC, Jay Clayton and the Chairman the Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo, addressed all issues pertaining to cryptocurrencies along with a number of industry witnesses. Both Clayton and Giancarlo spoke positively about the blockchain and digital currencies but stated that there needs to be adequate regulation.
Giancarlo went on to say: “We owe it to this new generation to respect their interest in this new technology with a thoughtful regulatory approach,” which sparked a rally in the price of bitcoin as it was considered a regulatory stamp of approval for digital currencies. Giancarlo’s positive statement should not come as a big surprise, however, as the CFTC was the regulatory body who approved bitcoin futures contracts at the end of 2017.
Overall, the cryptocurrency market was down over the course of the week with bitcoin (BTC) losing around 10 percent of value and most major altcoins dropping 10 to 15 percent.
While government machineries are busy crafting an official policy on cryptocurrencies, the industry should step forward and form a self-regulatory body. That was one key takeaway from the conversations at Yahoo Finance’s cryptocurrency event in New York on February 7.
Brian Quintenz, a member of the CFTC, pointed out that contrary to the expectations of many in the ecosystem, the February 6 hearing did not witness any of the usual fear-mongering about the fate of virtual currencies.
“One of the other takeaways from yesterday was you didn’t hear either chairman say ‘no, absolutely not, this is not safe, we must stop this at all costs.’ No one said that,” Quintenz remarked during his conversation with the media at the Yahoo event.
He also pointed out that any congressional action to mitigate the loopholes identified by the SEC and CFTC is probably a thing of the distant future. Therefore, he continued, the onus is on the industry itself to form a self-regulatory organization in order to protect itself and the investors.
Security authorities have arrested nuclear scientists working at a top secret Russian warhead center for trying to mine cryptocurrencies using supercomputers meant for war purposes.
Nuclear scientists’ turned-suspects attempted to use one of Russia’s most sophisticated supercomputers to mine bitcoins, according to the BBC. The Federal Nuclear Center is located in Sarov, Russia and is restricted from public access.
The news department of the center noted that, “There has been an unsanctioned attempt to use computer facilities for private purposes including so-called mining. As far as we are aware, a criminal case has been launched against them.”
A cryptocurrency blogger who is widely seen as an enthusiastic and altruistic source of online information for the global community was attacked in his home and robbed.
The 24-year old Pavel Nyashin, well known as a prolific blogger within the cryptocurrency arena, paid an unexpected price for proclaiming his bitcoin wealth online. The public announcement of his current attractive bitcoin fortunes led to criminals finding his residence and beating and robbing him.
Nyashin lost ₽24 million ($411,660) when thugs attacked him in his Leningrad home. Although he had been blogging about his bitcoin wealth in an unassuming manner, the information was not lost on the thieves.
The City of Berkeley in California is tired of being overly dependent on the federal government. Residents are doing everything they can to make sure that even if the Trump administration goes ahead with its threats to stop funding sanctuary cities, then Berkeley will still be able to sustain itself with a cryptocurrency backed by local government municipal bonds.
Berkeley, a sanctuary city in the state of California, is making plans to launch its initial coin offering (ICO) in a bid to reduce to a large extent, its dependence on federal government funding. The ICO project would sell a cryptocurrency backed by government municipal bonds said Berkeley city council member, Ben Bartlett.
“Berkeley is the center of the resistance, and for the resistance to work. It must have a coin.”
Bartlett, alongside crucial Berkeley residents like the Mayor of Berkeley Jesse Arreguin, fintech startup Neighborly, and the UC Berkeley Blockchain Lab, have created a committee that would formulate a strategy for the ICO campaign.
In an interview with CNBC, the researcher stated that the research highlights a trend between gold and bitcoin prices. Louney, a commodity analyst at RBC, said that initially, it was very difficult for him and his colleagues to plot a trend because bitcoin has been around for only a brief period as compared with gold or any other traded commodity, “When we examine how markets look at bitcoin and gold, we saw a lot of preconceived notions driving the theories around the relationship between the two. What we did is pull together what data we had and compared that to gold.”
However, things began to change at the end of 2017 when he carefully observed his data points, and the correlation turned somewhat negative. This turn was also the time when bitcoin prices were at a record high and trading near $20,000.
The National Tax Agency in Japan has finally caught up to cryptocurrency traders within its borders, raising fears that these profits could be taxed as high as 50 percent. Any profit made from cryptocurrencies is now classified as “miscellaneous income,” which includes any gains from sales, trading, purchasing goods with cryptocurrencies, mining, and network forks.
Under the individual taxation section, the document also stated there was no need to declare digital currency gains “for those who have an income of ¥200,000 ($1,838) or less by selling virtual currency, provided there is no other income.” For everyone else, they’ll need to declare their profits in a tax filing due February 16-March 15.
The multinational global e-commerce corporation is “seriously considering” cryptocurrencies as a payment method, but Senior Vice President of eBay Americas Scott Cutler believes it’s not ready for such a big move.
According to Cutler, the e-commerce portal could take on cryptocurrencies as payments. In an interview with Yahoo Finance, the vice president accedes the present hype and popularity of cryptocurrencies. The executive signaled that eBay is looking into digital currencies but isn’t primed to accept them yet. Cutler stated, “This is a trend that everybody is talking about, but sadly, at eBay, we don’t currently accept bitcoin as a form of payment. [We’re] seriously considering it as these cryptocurrencies become more mainstream, [but] we’re not quite there yet.”
eBay publicized its plan to discontinue PayPal as a payment option from its website, reflecting poorly on PayPal’s stock (PYPL). On January 31, 2018, Cutler’s firm announced that it has instead signed an accord with Adyen, an Amsterdam-based payment service company, to become eBay’s primary processor. More importantly, Adyen also partnered with BitPay, the popular cryptocurrency payment platform, which will allow all Ayden clients to use their service. About the agreement, BitPay’s blog stated, “Adyen’s merchants can now easily accept bitcoin as a payment method from their e-commerce stores.”