Bitcoin briefly hits $60,000

On Friday, bitcoin momentarily surpassed $60,000 for the first time since April, as investors cheered the potential of the SEC approving the first US bitcoin futures ETF in the coming days.

According to CoinGecko data, the digital asset reached a 24-hour high of $60,018, closing in on its all-time high of $64,895. It brings bitcoin’s year-to-date gains to almost 104 per cent.

Market sentiment improves as the SEC prepares to allow the first US bitcoin futures ETF to begin trading next week. Volt’s ETF focuses on companies with solid exposure to bitcoin or derive most of their revenue from bitcoin-related activities such as mining, financing, or manufacturing mining equipment.

It’s a small step, but it’s a big step,” Hamilton added. “In essence, the SEC has given the thumbs up, from the standpoint of investor safety, that investing in these significantly crypto-exposed companies is ‘fine.'”

Separately, a direct update from the SEC appears to have played a role in Friday’s developments. On Thursday, the regulator’s investor education Twitter account shared a link to a June notice warning about the hazards of investing in bitcoin. Furthermore, Coinbase advocated the creation of a dedicated regulator as a potential solution to the lack of regulatory clarity and enforcement in crypto markets, believing that digital assets should be treated differently from equities.

Crypto traders appear to have dismissed comments from JPMorgan CEO Jamie Dimon that bitcoin is “worthless,” as well as the Bank of England’s deputy governor Jon Cunliffe’s warning that the coin might spark a 2008-style crisis.

Battle over tax

The US tax authorities are typically regarded as the most aggressive to ensure that crypto investors pay all applicable taxes. The IRS successfully issued court summonses, known as John Doe Summons used when personal identity is unknown to crypto exchanges Coinbase, Kraken, and Poloniex to gather investor information.

This information has been used to validate the information given to the IRS by hundreds of thousands of cryptocurrency investors and to find discrepancies. “It’s been quite successful in getting folks to come forward and file an amended tax return,” says Shaun Hunley, a tax consultant with Thomson Reuters Tax & Accounting in Atlanta. In May, the IRS announced the formation of a specialized team to investigate blockchain, the technology that powers cryptocurrencies, to combat tax evasion. Operation Hidden Treasure is the name of the mission.

Meanwhile, as part of President Biden’s $1 trillion infrastructure program, measures are in the works to make it mandatory for crypto brokers to report their customers’ earnings to the IRS. The plan, which has sparked outrage in the cryptocurrency business, will make it easier for the IRS to collect information than through the courts. Tax authorities are increasingly incorporating information on cryptocurrency investors in the data they collect across borders. The names and addresses of investors and the value of crypto assets possessed were among the information provided.

According to HMRC, it “frequently acquires data from various information sources using authorities granted by Parliament.” The data is utilized to improve the tax system’s integrity and identify those who have neglected to disclose their gains.