IRS Proposes Strict New Bitcoin Rules
Plus: Bitcoin Dominance Above 96%, Microstrategy $745M Profit
First time reading? I’m Jordan, and this is the Bitcoin Minimalist. Every day, our team scours dozens of sources to bring you need-to-know Bitcoin news and insights—all in 5 minutes. Were you forwarded this email? Sign up here.
76% of North American Bitcoin Transactions are Institutional - Chainalysis Reports
The Scoop: According to a new report from Chainalysis called 2023 Geography of Cryptocurrency Report, financial institutions shape the North American Bitcoin market, influencing 76.9% of transactions.
Market Dynamics: Despite the overarching dominance of institutions, the last year has seen challenges, such as the FTX fallout in November 2022. Yet, by June, on-chain Bitcoin activity showed signs of revival, suggesting resilience in the market.
Stablecoin Impact on Bitcoin: Stablecoin usage in North America has seen a dip from 70.3% to 48.8% between February and June 2023. This shift could have repercussions on the broader Bitcoin market due to intertwined ecosystems.
Bitcoin Regulation on the Horizon: The U.S. faces the challenge of creating robust regulations specifically for Bitcoin. While there are obstacles, such regulations are crucial for ensuring a stable and growing Bitcoin market in the region.
💪 A truly incredible statistic was reported by Dylan LeClair via twitter. “At today’s price, dollar cost averaging bitcoin has you in the green no matter what date you started buying.” Check out the cool visual in the tweet if you have a chance.
🔗 Tether announced plans to release real-time data on its reserves in the future, although no specific deadline is set. This comes after a recent leadership change with Paolo Ardoino taking over as CEO.
📈 In an interview with Coindesk, CFTC Commissioner Summer K. Mersinger states the market is ready for a Bitcoin ETF.
🌅 BlockFi announced that the company has emerged from bankruptcy as of October 24, 2023. This does not mean they will continue business. This simply means they will now begin paying out customers and winding down the company.
IRS Proposes New Rules for Bitcoin Transactions; Seeks Public Comment
The Scoop: The IRS is proposing new regulations on Bitcoin activity that would likely stifle innovation and make tax compliance for both businesses and individuals prohibitively expensive.
What It Means: The new rules redefine "brokers" to include nearly anyone involved in Bitcoin transactions…even potentially block explorers. Another consequence is that if you buy anything with Bitcoin, you might be required to KYC yourself to the merchant.
What's At Stake: This change could flood the tax system with a major increase in tax forms, leading to potential mistakes and extra audits. On top of that, because the rules are so hard to comply with, we can expect to see many businesses drop support for Bitcoin and/or leave the country for friendlier governments.
What Can You Do: Send in a public comment complaining about the rule.
Currently there are around 8,000 comments. The more comments the community submits, the more likely it is that the implementation of any of these rules will be delayed or cancelled entirely! The best way to leave a comment is to use this comment writing tool utilizing ChatGPT.
Will California's BitLicense Be Any Better than New York's?
Yes - 33%
No - 67%
👍 Yes: “How could it be worse?” - Jeremy
👎 No: “It’s California…the only state that is as bad as New York when regulating anything. I am not optimistic.” - Hung
🚀 Many new records and high’s this week!
Bitcoin Dominance hit a two year high!
Bitcoin mining difficulty hit another all-time high on Saturday, adding 6% difficulty.
Bitcoin supply held by long-term hodlers reached another all-time high of 76%.
The Bitcoin Fear & Greed Index reached a 6-month high of 66 (Greedy).
Bitcoin is up 107% this year.
Since Monday, more than $310M worth of Bitcoin shorts were liquidated.
MicroStrategy’s Bitcoin position is currently sitting on a $745 million unrealized profit.
Today’s newsletter was written by Colin and edited by Jordan.