• Speculation on consequences of the US Senate adopting crypto taxes has seen ETH gain 38.62% in the past month and 782.51% since August 2018. 
  • Bitcoin has also thrived under this speculation, adding 10.82% since the beginning of August 2021 and close to 30% in the past 30 days. 
  • ETHUSD technical chart shows a double bottom, indicating a short-term uptrend.

Ethereum lost 6.88% as of 3:31 am GMT on August 9, 2021, from the previous day’s close. It traded to a high of $3,164.14 before dropping to a low of $2,915.19. In the past week, Ethereum was the biggest gainer among all cryptocurrencies, growing 12.22%. Investors watched as the upgrade took place, with most hopeful that the crypto will finally flip Bitcoin. 

After sailing past $45,000, Bitcoin is headed towards $50,000 with strong fundamentals, indicating that the digital coin is on the bullish trend again. Market capitalization for the five main coins, BTC, ETH, Tether (USDT), Binance (BNB), and Cardano (ADA), exceeded $1.3 trillion on August 9, 2021.  

Cryptocurrency regulation

The US Senate debated on the “Bipartisan Infrastructure Investment & Jobs Act” (HR 3684) legislation, with a particular mention of cryptocurrency regulation. Of special note, Senator Portman argued that companies needed to report on their transactions of cryptocurrencies. 

Currently, crypto holders are not required to hold a form 1099, which stock and bond investors possess for tax filing. By equating stocks and crypto, the Senator argued that it would give certainty to investors, provide standardization and help the government obtain taxes. With the decentralized nature of cryptocurrencies, the use of brokers will come into play. 

This regulation added to the speculation among investors. The past month has seen ETH adding 38.62%, showing a 782.51% gain since August 2018. 

One-year analysis of ETHUSD

However, Ethereum is still 27.48% shy of reaching its 52-week high of $4,352.11. Regulatory legislation and the upgrade may add to the coin’s price in the coming days.  

One-year analysis of BTCUSD

Bitcoin has also thrived under this speculation adding 10.82% since the beginning of August 2021 and close to 30% in the past 30 days. After bouncing from the $30,000 support, the crypto giant is now on the verge of hitting $50,000. 

Reaction

The HR 3684 “infrastructural bill” will cost the US Federal government $1 trillion and support the development projects in road networks, clean energy, and other works. Of this amount, $28 billion will be extracted from taxing cryptocurrency transactions. Before passage of the bill, crypto brokers were required to report transactions exceeding $10,000 in the tax form 1099. 

Leaders and entrepreneurs in the US have reacted to the crypto tax, adding fuel to the industry. Tesla’s CEO Elon Musk, whose influence in BTC and Dogecoin is profound, stated that the legislation was hasty. In his defense Musk believes that the US lawmakers were not at liberty to pick winners and losers in the technology space with this taxation.

Senator Ted Cruz noted that the tax provision was dangerous as it would curtail technological innovation in the sector, especially the small crypto-companies. However, President Biden’s administration reiterated that the tax laws would only apply to large companies. 

Technical analysis

ETHUSD is seen to form a double bottom after price hit support at 1,750.58. The market tested the price on June 26, 2021, and July 24, 2021. The ensuing uptrend is likely to move past $3,200 after the upward breakout was confirmed at 2,410.00. 

ETHUSD technical analysis

At 2,982.00, the pair moved above the 9-day EMA at 2,798.10. There is also an increase in buying momentum, with the 14-day RSI staying in the overbought zone at 75.82.