On November 16, cryptocurrencies saw a sharp drop. Bitcoin, the largest digital token, slipped towards $60,000 and Ether also hit one of its lowest levels this month. At the time of writing, the Bitcoin price is only $60,594 per coin. Ether was also down as much as 8.34% over the past 24 hours.
Part of the reason may come from the new law of the US government. New tax reporting requirements for cryptocurrencies are part of a $550 billion infrastructure bill that US President Joe Biden just signed into law. Mr Hayden Hughes, chief executive of Alpha Impact, a platform that allows investors to copy the strategies of other crypto traders, said: “We’ve seen the US infrastructure bill gets signed, which has started a sell-off from traders who are concerned about regulations and taxes.”
Meanwhile, China is warning its state-owned enterprises to get rid of cryptocurrency mining and is considering imposing punitive measures in the form of higher electricity prices on companies that continue to defy a government ban as Bitcoin trades near record highs.
Meng Wei, a spokesman for the nation’s chief economic planner, said in a press conference on Tuesday that the National Development and Reform Commission plans to crack down on industrial-scale bitcoin mining as well as any involvement of state-owned enterprises in this activity. Beijing has cracked down on bitcoin miners this year, blaming them for everything from wasted energy to deadly coal mining accidents as the government struggles to meet its carbon-neutral goals.
Bitcoin has more than doubled this year, while Ether has more than doubled. Both hit records last week amid a passion for digital assets fueled by speculative demand and controversial arguments that they can hedge against inflation risks. Some technical indicators have suggested that the strong run of the cryptocurrency is due to a pause. Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno, said that we’re seeing a healthy pullback after a prolonged rally.