Crypto Week Ahead: Bitcoin, Top Coins Continue To Wade Through Troubled Waters

Over the past seven days, Bitcoin (BTC) price achieved a high of $26,722.62.

Bitcoin (BTC), the oldest and still the most relevant cryptocurrency in the world, is yet to get out of troubled waters, as its price dipped down to the $25,000 range last week. The US Treasury Department has renewed its efforts to crack down on traders and taxpayers, the full effects of which remain to be seen in the coming days. Prime Minister Narendra Modi called for an “integrated approach” in handling crypto assets. The overall market fear and greed index leaned towards fear among investors, with a score of 35 out of 100, as per CoinMarketCap. 

Before we proceed further, readers should note that the overall crypto market and coin prices are extremely volatile in nature. There are no foolproof methods to ascertain how cryptocurrencies are expected to behave in the future. This article is aimed at helping investors stay on top of the current market scenarios and the biggest events that have already taken place as well as some upcoming occurrences that are worth noting. Investors are advised to do their own research before taking any call. 

Crypto Prices Over The Past Week

Last Monday (August 21), the overall crypto market cap stood at $1.06 trillion. BTC price stood at around $26,080, ETH price stood at around $1,675.

A week later, the overall market cap dipped to $1.05 trillion.

DeFi's total volume stands at $1.62 billion, at 9.15 percent of the total market 24-hour volume. In the case of stablecoins, the overall volume stands at $16.43 billion, at 92.83 percent of the total 24-hour market volume. As per CoinMarketCap, the overall market fear and greed index stood at Fear, at 35 points (out of 100).

BTC dominance, at the time of writing, stood at 48.28 percent.

Over the past seven days, Bitcoin achieved a high of $26,722.62 (on August 24) and a low of $25,589.48 (August 23).

Ethereum, on the other hand, saw a high of $1,688.73 (August 24) and a low of $1,603.60 (August 23).

Crypto Events To Note

Prime Minister Narendra Modi addressed the B20 Summit on Sunday and emphasised the necessity of adopting a comprehensive strategy to address matters linked to cryptocurrencies. Significantly, he advocated for the development of an all-encompassing method to manage concerns associated with digital currencies. 

PM Modi said, "There is a challenge related to cryptocurrencies. There is a need for more and more integrated approach in this matter. A global framework should be created for this, in which all stakeholders are taken care of."

The US Treasury Department has introduced a definitive characterisation of a "broker" within the cryptocurrency domain. This newly established definition sheds light on the tax reporting responsibilities for crypto entities and investors, effectively addressing a longstanding query concerning whether decentralised finance platforms and miners would be required to collect personal information from their users.

On Friday, the Treasury Department released a comprehensive proposed rule spanning nearly 300 pages, in response to the 2021 Infrastructure Investment and Jobs Act. According to this proposal, specific entities such as centralised crypto exchanges, payment processors, select hosted wallet providers, certain decentralised exchanges, and individuals or organisations that redeem crypto tokens originating from their creation will be subject to the stipulated reporting obligations.

Additionally, the Treasury Department introduced a novel custom tax form designated as the 1099-DA, specifically intended for these identified brokers. This move addresses a longstanding dilemma regarding the most appropriate version of the US tax form for taxpayers, thus providing much-needed clarity in this area.

However, the guidelines proposed by the Treasury Department indicate that miners will be exempt from the scope of these tax regulations. Nevertheless, the proposed guidance specifies that "certain" decentralised finance platforms will not share this exemption and will be expected to adhere to the outlined tax obligations.

For now, it remains to be seen how these developments affect the overall market in the coming days.

What Crypto Traders Are Saying About Current Market Scenario

Mudrex co-founder and CEO Edul Patel told ABP Live, “Over the weekend, Bitcoin traded around the $26,000 range. Bitcoin's price and market sentiment improved, driven by optimistic comments from JPMorgan analysts, which indicated the possible conclusion of Bitcoin's downtrend, a view supported by the diminishing open interest in Bitcoin futures contracts on the Chicago Mercantile Exchange. In contrast, Ethereum currently trades at approximately $1,650. Market sentiment swiftly rebounded from a dip prompted by US Federal Reserve Chairman Jerome Powell's speech on Friday. During Kansas City's Jackson Hole Symposium, Powell emphasised the ongoing necessity of maintaining a restrictive monetary policy in the US until inflation displays sustained signs of deceleration. There was outrage on crypto Twitter following the US Treasury Department’s new proposal on handling digital asset taxes. Meanwhile, PM Modi called for an integrated approach and the need for a global framework for cryptocurrencies at the B20 Summit on Sunday.”

WazirX Vice President Rajagopal Menon offered his take, “The previous week in crypto didn’t see any major updates. However, fresh rounds of funding for blockchain projects have boosted the hopes of the industry. The market sustained the anticipation around interest rate hikes as prices of key tokens remained steady. Trading volumes rose by almost 7 percent, indicating a breakaway from the slump of last month’s numbers in this domain.”

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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.