Cryptos Up Despite Prospect of Broad Taxation: Markets Wrap

Ethereum and bitcoin continued their near-term bull run on Monday afternoon after a bipartisan compromise around a crypto-related tax provision in the infrastructure bill was blocked in the Senate.

Instead, the bill will proceed as originally written, likely passing the Senate with language that includes broad taxation of the digital asset space. It requires cryptocurrency ‘brokers,’ an undefined term, to disclose trader information, including gains made on investments, transfers and transactions of more than $10,000, which the IRS already monitors. The provision is estimated to bring in $28 million in tax revenue, Blockworks reported on August 7.

Prices continued to rise but simmered down after traditional markets closed following the news.

In the past, regulatory scares have sparked massive sell-offs for crypto. However, bitcoin traded above its 200-day moving average line on Monday. BTC has a return on investment (ROI) of 37.1% over the past month, according to Messari. 

The largest cryptocurrency by market value now faces resistance at $50,000. More ether continues to burn after the launch of the London hard fork on Thursday. After trading above a two-month high last week, the cryptocurrency continues to shoot up. Ether has a ROI of 49.04% over the past month, according to Messari.

DeFi

• Uniswap is trading at $28.21 with a total value locked of $4,997,306,338 up 9.1% in 24 hours at 4:00 pm ET. 
• Chainlink is trading at $24.58, advancing 7.6% with trading volume at $996,367,778 in 24 hours at 4:00 pm ET.
• DeFi:ETH is 29.2% at 4:00 pm ET.

Crypto

• Bitcoin is trading around $46,293.37, up 5.83% in 24 hours at 4:00 pm ET.
• Ether is trading around $3,169.98, advancing 6.16% in 24 hours at 4:00 pm ET.
• ETH:BTC is at 0.0684, down -0.40% at 4:00 pm ET.
• VIX is up 3.53% to 16.72 at 4:00 pm ET.

Insight

Clearblock Insights co-founder Cody Ryan weighed in on Monday’s crypto markets activity.

“The industry’s collective energy has been laser focused over the last 72 hours on the implications of the infrastructure bill. However, the market continues to push higher with BTC now flirting again with key resistance levels around $45K in the face of continued regulatory uncertainty,” Ryan said to Blockworks. “Moving our scope outside of DC and the fluid political headlines, the on-chain metrics help paint a picture of just how bullish and energized the market is. BTC reclaimed its 200-day moving average today for the first time since the epic May sell-off earlier this year.”

ETH:BTC, BTC and ETH over the past month. Source: TradingView

Commodities

Oil prices dipped on Monday amid Delta variant concerns.

US crude oil fell to a two-month low as it toppled to $66 per barrel. As governments react to surging Covid cases, investors worry restrictions may weaken demand for the commodity. This is mostly due to lack of travel as countries mandate lockdown orders. 

• Brent crude is down to $70.21 per barrel, declining -3.04%.
• Gold fell -0.01% to $1,814.

In other macro news, job openings rose with those quitting jobs, indicating a continued US labor shortage, Blockworks reported on Monday. The number of job openings touched over 10 million, according to the US Bureau of Labor Statistics.

Insight

US Chief Executive Officer at Currency.com Steve Gregory weighed in on commodities and their relationship to cryptocurrencies in the markets.

“Meanwhile, in traditional markets, oil and gold saw sharp falls bringing into question whether gold remains a popular safe-haven asset or is crypto emerging as a hedge against inflation and the government’s looming threat to unwind stimulus,” Gregory said in a note to Blockworks. “It will be interesting to see how this story unfolds. In the meantime, we expect the continuation of the [crypto] bull market in the immediate term.”

WTI Crude and Brent over the past five days. Source: TradingView

Equities

• The Dow was down -0.31% to 35,099.
• S&P 500 declined -0.1% to 4,431.
• Nasdaq had a slight uptick of 0.18% to 14,862.

Fixed Income

• US 10-year treasury yields 1.319% as of 4:00 pm ET.

Currencies

• The US dollar strengethened 0.17%, according to the Bloomberg Dollar Spot Index.

In other news…

Alchemy Pay announced the launch of its crypto-linked card, Blockworks reported.

The Singapore-based company’s most recent product will support 40 cryptocurrencies, which can be linked to notable digital wallets like Paypal. Payment methods are set to be accepted by merchants across Mastercard and Visa networks.

We’re watching out for…

• US consumer price index (CPI) data will be released on Wednesday
• OPEC: Oil Market Report is due on Thursday

That’s it for today’s markets wrap. I’ll see you back here tomorrow.

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