Why Bitcoin, Ethereum, and Dogecoin all erupted on Monday

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What happened

Cryptocurrency prices soared in Monday morning trading, with Ethereum (CRYPTO: ETH) up 3.7% since midnight Sunday, Bitcoin (CRYPTO: BTC) up 4.4% and Dogecoin (CRYPTO: DOGE) doing best of all – up 5.9% as of 10:45 a.m. EDT.

And you can have Washington, DC to thank for that.

Image source: Getty Images.

So what

In recent weeks, cryptocurrency investors have been mesmerized by events in the capital, where the U.S. Senate is considering passing a $ 1,000 billion infrastructure bill.

The bill contains a provision designed to raise $ 28 billion by taxing cryptocurrency transactions, to help pay for all new infrastructure. As if that weren’t enough, there is a serious argument over who, precisely, will be required to pay this tax after reporting their cryptocurrency transactions to the IRS.

Last week, Senate leaders such as Democrat Ron Wyden of Oregon and Republican Pat Toomey of Pennsylvania began trying to pass amendments to ensure that only actual “financial intermediaries” would be required to report transactions. cryptographic under the definition of “brokers” subject to this requirement. – and that crypto miners, software developers and transaction validators would not have to report it. At the last report, the infrastructure bill had passed a procedural vote without these amendments, and is heading for a final vote on Monday or Tuesday morning.

Now what

Now, this all sounds bad enough for cryptocurrency investors – so why are Bitcoin, Dogecoin, and Ethereum prices rising?

Because, as Politico reports today, the real importance of what (almost) happened in the Senate last week isn’t that the cryptocurrency lobby didn’t (quite) win. his battle over legislative language. It was that he was able to provoke “an intense brawl over the infrastructure bill between Bitcoin advocates, Congress and the White House”, proving that all of a sudden, the cryptocurrency is “a new power actor in Washington, “and who now has powerful allies in the US Parliament.

Moreover, all is not lost in the battle over what constitutes a cryptocurrency “broker”. The fight for that definition in the Senate has drawn strong allies outside Washington, ranging from public companies and venture capitalists to Square boss (NYSE: SQ) Jack Dorsey, who rallied his 5.6 on Sunday. million Twitter followers (NYSE: TWTR) the military to pressure lawmakers to correct the “‘Crypto Tax Reporting'” provision of the Infrastructure Bill:

To @RonWyden, @SenLummis, @SenToomey, @MarkWarner, @SenRobPortman, @SenatorSinema, @TedCruz, respective staff and everyone who worked on the “Crypto Tax Reporting” provision of the Infrastructure Bill: thank you for your work to get it right.

Can we come up with a feasible simplification?

jack (@jack) August 8, 2021

This lobby army may have lost a battle in the Senate on Sunday night, but as Politico points out, even if the infrastructure bill passes the Senate as is, it still has to survive a House vote and probably to a reconciliation between the two legislative bodies. – two other chances to tighten the definition of “broker”.

With cryptocurrency now recognized as “a bigger force than anyone ever anticipated,” Politico argues, you shouldn’t rule out the crypto lobby just yet.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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