Tag: cryptocurrency bubble

A Recent Spike in Bitcoin Leaves Members of Congress Speechless

By Dane Larsen | @therealdanelars

“As long as the stupid criminals keep using Bitcoin, it’ll be great,” -Michael Conaway (R- TX)

Representative Conaway of Texas’ 11th Congressional District made snide remarks about members of the American cryptocurrency community. Along with his traditionalist GOP and financially unstable Democratic colleagues, he took cheap shots at crypto investors, without giving opportunities for rebuttals.

At a segment of the Committee of Financial Services, the subcommittee of the Monetary Policy and Trade received some backlash from the crypto community. The 115th US Congress was incredibly biased against decentralizing the government in the economic sector during these meetings of the Subcommittee.

“As a medium of exchange, cryptocurrency accomplishes nothing except facilitating narcotics trafficking, terrorism, and tax evasion,” -Brad Sherman (D- CA)

The greatest allure of Cryptocurrency, its anonymity and decentralized nature, is under attack by legislators who seek to regulate currencies like Bitcoin. The House and Senate have already made necessary action forcing members of Congress to “disclose their holdings”, and passed a bill to facilitate exchanges of Bitcoin and other popular cryptocurrencies, in an attempt to stop illegal activity. Some councilmen and women have even been in the works trying to write a proposal flat-out prohibiting the mining and use of Bitcoin.

Predictably, the reaction by the media and elites was to cast doubt over the ability of cryptocurrency users to circumvent the Federal Reserve and current monetary policy practice. To praise people like Conaway for calling out the “criminals” is to go with the mainstream; in other words, the easy way out. Congress would rather clump all investors into this stereotype of the small minority, rather than sympathizing with the crypto investors and looking with a broader approach, at the sheer amount of people who are involved in the community without coming at it from an illegal standpoint. A very large portion of the community is involved to ‘stick it to the man’, not deal drugs or hold prostitution rings. We know this objectification all too well because cryptocurrencies have had a negative stigma since the launch of Bitcoin in January of 2009.

The feeling of detest for Bitcoin is bipartisan in the US House and Senate, yet the wonders of BTC, BCH, LTC, and ETH are global. The market shows many young people are interested in investing in bitcoin and other cryptocurrencies.

An enormous amount of knowledge that the American people know about Bitcoin (considering Litecoin, Etherium, and other cryptocurrencies are about as exotic of words to them as anything), is about the Great Spike in late 2017, when BTC rose to just about $19,000. After that, the people know that has decreased. But after that is where the stories go through two different paths. Most households believed that crypto fizzled out into nothingness until it was a memory: a forgotten commodity.

The extent of crypto knowledge for the average American is about the Great Spike of late 2017, and it’s eventual fall from grace. When BTC rose to $19,096.64 in late last year, then falling down thousands of dollars in a matter of days. The general public thinks Bitcoin is dead. However, this couldn’t be more wrong. Bitcoin is alive and well, showing signs of promise and great potential for the coming months to end off 2018. Bitcoin is up $2,324.52 since last month, reaching $8,200. Whether it was just a leap in public interest, or the word spreading about crypto, the price of Bitcoin is rising at a steady rate.

Since the Subcommittee of Monetary Policy and Trade, and the rise of Bitcoin, no Representative who called out or talked bad about the crypto market and/or community has made any public briefing admitting their fault or apologizing. Although expected, we can all sit back, disappointed at the disconnect from the D.C. members of Congress and the American public.


To support 71 Republic, please donate to our Patreon, which you can find here.

Featured Image Source.

Advertisements

No, Cryptocurrency Is Not “Quietly Dying Out”

By Mason Mohon | @mohonofficial

On Sunday, Russia Today posted an article titled “Is the cryptocurrency market quietly dying out?”, which was full of nothing more than explanations of recent cryptocurrency events along with market declines.

The article merely discusses recent market trends but uses a loaded editorialized headline to make it seem like crypto is dying. The recent decline and widespread burns are quite the opposite, though. The market is organic, and consumers have to take responsibility and learn for themselves.
Those who were scammed or bought Bitcoin at $19,000 may be too depressed to ever buy cryptocurrency again, but if they are wise they will see it as a learning experience. People who have been burned will now use a skeptical eye when looking towards any potential investments.
The failure of the cryptos with “broken blockchains” is just creative destruction at work. They couldn’t serve the consumers, so a better and safer technology is coming to take their place.
A decline in the price of popular currencies is not the end of an era. It is a learning opportunity, so take advantage of it and use it as such.
Note: This is not investment advice.

The Free Market of Cryptocurrency is Under Attack

By Ryan Lau | USA

Last week, after a hard-fought legal battle in both the House and Senate, the Republican tax bill passed by a narrow majority. Since then, conservatives claiming to advocate for a smaller government have touted the move as a political success, and the biggest tax reform in decades. Though it does reduce some personal and corporate income taxes, the bill is in fact incredibly disturbing on a much different ground. In fact, the very people who claim to be calling for a reduction in government size have just taken a major step in killing the future of cryptocurrency. This tax bill, in its reclassification of the 1031 Exchange law, has in fact done more to extirpate any trace of legal economic freedom than any bill since the Affordable Care Act.

What is the 1031 Exchange, and why is it important? Essentially, this measure, an important part of our tax code, allows for investors to defer capital gains taxes, in the event that an investor is selling a property with the direct goal of purchasing a new one. This has been widely used by house flippers and cryptocurrency traders alike. However, the tax bill has removed cryptocurrency from the list of acceptable 1031 references. Though the IRS has classified cryptocurrency as a taxable capital gain since 2014, it previously was only taxable when exchanging large amounts of it for fiat currency. Hence, reinvesting and exchanging between cryptocurrencies was treated as a 1031 exemption, though this is no longer true. Now, the IRS has permission to tax any and all exchanges between cryptocurrencies, which is an attack on individual liberty and economic freedom.

What does this mean for the future of cryptocurrency? Though small investors will not be significantly impacted due to the simple fact that capital gains tax has a minimum threshold, the impact of larger investments is astronomical. A day trader, who may exchange cryptocurrency multiple times in one single day, he may now find himself subject to a 20% capital gains tax for each exchange. This new implementation will naturally take away some of the perks of trading, reducing the demand for such exchanges. Though investors may still leave their money in one single cryptocurrency for extended periods of time, this action naturally has a smaller maximum profit margin. Even so, the IRS is tight their fists around long-term investments, with a new Senate bill that threatens the future of all cryptocurrencies recently passing.

Though some coins, such as Monero, have greater levels of privacy than others, this ability to hide from the state is quickly shrinking. Action must be taken immediately to protect the rights of cryptocurrency traders, whether it be done through the law or the market. Though investing cryptocurrency in a 401K or Roth-IRA would currently avoid these taxes, these funds have virtually no liquidity, and there are very few, bleak alternatives, such as surrender of citizenship. One should never have to give up their United States citizenship or invest in an offshore account in order to avoid mass theft on personal property, yet with the government’s recent actions, is this fate inevitable? The IRS is concerned with losing out on income, yet forget that they are merely a collective of individuals with no legitimate claim to any individual’s income. This must be recognized, and this bill altered, if we are to protect the rights of the individual.

Senate Bill Threatens Future of Cryptocurrency

By Andrew Zirkle|WASHINGTON

Hidden within the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017”, also known as S.1241, are far-reaching regulatory provisions expected to heavily affect users, traders, and holders of all types of cryptocurrencies, including Bitcoin.

The bill was pushed into a Judiciary Committee hearing on the 28th of November, without much notice to the public. The bulk of the 2-hour hearing focused on other elements of the bill, with the only mention of cryptocurrency happening very briefly during a discussion on money laundering. The hearing also featured a testimony from Kathryn Haun, who is on the Coinbase board of directors. She did not mention any information regarding cryptocurrency or its exchanges.

The bill, which contains 20 sections, was written under the guise of preventing illegal money operations. However, its relatively small changes to the legal status of cryptocurrency are expected to have far-reaching ramifications. Section 13 of the bill indicates that “digital currency” is to be added to the list of items that the US Treasury Department will consider as “financial institutions.” Although this change in legal definition may seem small, the impacts it would have for cryptocurrency users would be significant.

The owners of cryptocurrency would be required to report their holdings in cryptocurrency to the IRS as assets, and also may be required to pay a long-term capital gains tax of up to 25%, or regular federal income tax of up to 39.6%, on the revenue earned from selling cryptocurrency for more than its previous value. Holders of cryptocurrency who do not report their holdings as assets to the IRS would be subject to tax evasion penalties or jail time. The bill fails to address many of the complexities of digital currencies, including the tax protocol for exchanging US Dollars for cryptocurrency multiple times before selling back to dollars, as well as any tax burdens that may be held by cryptocurrency exchanges.

The measure also subjects holders of cryptocurrency to more government scrutiny, meaning individuals who are believed to be misrepresenting their crypto holdings or transactions could have their financial information seized by the IRS or subpoenaed in court. Section 13 of the bill also requires the “detailing a strategy to interdict and detect…digital currencies…at border crossings and other ports of entry for the United States.”  This means that even someone with basic electronic equipment could be questioned or searched by border and customs officials, as well as the TSA.

Although the bill does contain a lot of important updates to the criminal code regarding money laundering, many in the cryptocurrency community are calling for a re-examination of the bill itself and section 13, as it is widely believed that it does not properly account for the nature of cryptocurrencies in its attempts to regulate.