Biden Wins Crypto Hearts | Bitcoin Playing Pinball

BIDEN BULLISH ON CRYPTO?

Not quite. But the industry did breathe a sigh of relief when the president released its long-awaited executive order tasking federal agencies with researching cryptocurrencies and developing policy recommendations. Key areas of focus will include crypto’s impact on financial stability, illicit finance, financial inclusion and investor protection. Perhaps the most anticipated measure, the order directs the U.S. government to “place urgency” on the research and development of a potential U.S. central bank digital currency, often referred to as simply a “digital dollar,” but it stops short of laying out a specific timeline for any pilot projects. No new regulations or policies are outlined in the order, but because it suggests that the government will try to assimilate the technology into financial markets and payment systems rather than seeking to curtail it, many in the industry saw this as a positive first step. Like anything, the devil will be in the details.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on March 11, 2022.

BITCOIN BOUNCING AROUND

Cryptocurrency prices are trying to end the week on a high note, with bitcoin surging towards $40,000 after flirting with support levels in the mid-high $30,000s this week. Ethereum and the rest of the crypto top ten are also climbing, with tokens such as luna and avalanche leading the way. This ping-pong action was largely driven by the rapidly changing dynamics in Ukraine as well as record inflation data (prices jumped 7.9% in February), and a hawkish tone set by the European Central Bank regarding its plan to wind down bond purchases to get a handle on inflation.

This unstable ground is unlikely to change anytime soon. In an interview with Forbes, the former U.S. Undersecretary of Defense for Policy Michele Flournoy is quick to disavow the notion that things will go back to normal even when the bullets and mortars stop flying, a common misconception. In fact, she says that challenges will persist long after the fighting stops. “The conflict itself is going to take significant time to resolve, and even after that some of many of the restrictions and sanctions will remain in place because of Putin.”

TENNESSEE COUPLE WINS CRYPTO TAX BATTLE AGAINST THE IRS, BUT IT WASN’T THE VICTORY THEY WANTED

In May 2021, a Tennessee couple, Joshua Jarrett & Jessica Jarrett (Jarretts), filed a complaint with the IRS arguing that Tezos staking rewards they earned should not be taxed at the time of receipt. The couple requested a tax refund of $3,793 by filing an amended tax return. In December 2021, the Department of Justice ordered the IRS to refund the couple. However, the couple refused payment because they wanted to take the IRS to court and set a legal precedent for how staking rewards should be taxed moving forward. With more than $10 billion worth of assets staked on Ethereum alone, this will be big business and a key question for most crypto holders filing taxes. However, the IRS moved to dismiss the suit, suggesting that there is nothing left to adjudicate. Based on the outcome of this motion, the Jarretts may have to wait longer for the resolution it wanted.

BLOCKCHAIN 50 SPOTLIGHT

Andreessen Horowitz: Arguably the largest crypto investor in the world, the venture capital shop also known as “a16z” has raised around $3.1 billion in three dedicated blockchain funds over the past three years. That includes the massive $2.2 billion Crypto Fund III, which launched in June 2021. In total, the blue-chip firm has funded at least 60 startups working with blockchain and was an early investor in Coinbase, now valued at $34 billion. A16z also hopes to shape crypto regulation, having hired former officials from the SEC, Treasury and the Department of Justice to lobby policymakers.

ELSEWHERE

The Great NFT Selloff: Has The Digital Collectibles Craze Reached Its Peak? [Financial Times]

Ukraine Has Received Close To $100 Million In Crypto Donations [CoinDesk]

Mainstream Hedge Funds Pour Billions Of Dollars Into Crypto [Wall Street Journal] 

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

Nina Bambysheva
Reporter
Forbes Money & Markets

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