The market capitalization of cryptocurrencies has returned to the one trillion dollar level, a mark not seen since May, although ongoing gains face hurdles due to potential new tax reporting requirements in the United States. The value of over 8,800 cryptocurrencies tracked by CoinGecko rose by 55% to reach $1.95 trillion after hitting a low in July, aided by the price increases of Bitcoin and Ethereum. Bitcoin's rise has stalled due to scrutiny of virtual currencies in an infrastructure bill passed by the Senate, according to cryptocurrency exchange Luno.
Vijay Ayyar, head of Luno in the Asia-Pacific region in Singapore, stated, "Bitcoin's rise has stopped because of the bill," with the currency currently trading between $45,000 and $47,000. The cryptocurrency industry has failed to amend tax reporting rules, which are expected to increase revenue by about $28 billion, despite a significant push from lobbying groups. Procedural issues could jeopardize efforts to alter the legislation when the House of Representatives takes over the bill. Nonetheless, optimistic investors remain unfazed, with expectations that Bitcoin could reach $100,000 following its recent recovery.
**Increased Burden**
The largest virtual currency fell by 3.2% on Thursday, reaching $45,200 in the morning hours in London. Ethereum has also declined. According to the Bloomberg Galaxy Crypto Index, some view the regulations as an added burden. Analyst Esme Pao from China Tonghai Securities in Hong Kong commented, "Some see the regulations as an extra burden." He added, "My perspective is to endure short-term pain for long-term gains, as regulations increase clarity, enforcement against violations, and call for more mainstream participation."
Before the recovery over the past three weeks, the cryptocurrency sector had been declining due to a crackdown in China and concerns about the environmental impact of the energy required to create coins and process transactions. Additionally, a $610 million theft in the thriving decentralized finance sector highlights ongoing security risks, with hackers returning nearly half of the stolen funds.