The world’s largest and most popular cryptocurrency, Bitcoin, has rallied after this week saw dramatic peaks and troughs for the major coin as it looks to meet a new recent high of $50,000 in price.
The first half of the week saw cryptocurrency prices rise and fall in response to considerations of a controversial cryptocurrency provision contained in the Biden administration’s huge Infrastructure Bill, which would reshape US with monumental investment in roads, rail, clean energy and high speed internet.
Bipartisan efforts to clarify the wording of the Infrastructure Bill’s crypto provision, defining anyone participating in the transfer of digital or crypto assets like cryptocurrencies on behalf of another as a ‘broker’, had looked to succeed on Monday – sending the prices of Bitcoin, Ethereum, Ripple and coins across the board soaring in value.
But the failure of efforts to materialise has dealt a blow to the burgeoning cryptocurrency market in the US as the Biden administration’s Infrastructure Bill now heads to the House of Representatives, where attempts to change the wording of the crypto provision should continue.
What is Bitcoin worth today?
As of 9am, Bitcoin’s price today (August 12) had peaked at $46,179.10 or £33,453.29 according to Fintech Zoom.
This comes after the coin increased by over 5% in value to a price of more than $46,500 on Monday as hopes for a compromise in the Senate over the Infrastructure Bill buoyed the coin to a new recent high.
Even as the coin began to shed value in Thursday night’s 2.4% sell-off, with Bitcoin prices dipping to $44-45K, the major cryptocurrency remains at its highest value in almost three months after reaching a peak of $64,829.14 in April.
Since then, the currency has been plagued with higher levels of volatility as governments and regulators worldwide clamped down on the industry.
Crypto prices toppled in June as the Chinese government pledged to clamp down on traders and crypto mining in the region, with the country previously estimated to host 65% of the world’s Bitcoin production.
The cryptocurrency crash in late June also led to a similar fluctuation in the price and availability of Graphic Processing Units (GPUs) as reports of the dumping of these much-needed components for mining rigs in China amid the crackdown sent prices skyrocketing worldwide.
Following the Chinese state’s move, countries like South Korea also pledged to tackle the rise in money laundering taking place via cryptocurrency, while the Metropolitan Police announced that it had successfully closed in on a huge UK cryptocurrency money-laundering operation.
On July 13, the Met declared that special investigators had made the UK’s largest cryptocurrency seizure yet, and one of the world’s largest seizures, seizing a whopping £180m worth of cryptocurrency.
In turn, cryptocurrency exchange platforms such as Binance have been feeling the heat across the world as regulators and governments have started to pay close attention to the operations of such platforms in the wake of the global crackdown on crypto.
The result of this saw Bitcoin’s highest prices sliced in half in June, with the coin struggling to break out of the low to mid $30k price range until it received a welcome boost from Tesla founder Elon Musk in his appearance at major Bitcoin conference in July.
The bullish rise and increased confidence in Bitcoin will likely lead it up to the $50k threshold soon enough, but market insiders expect to see further resistance at this level.
Craig Erlam, senior market analyst at OANDA said: “Bitcoin has found its groove once more over the last week, rallying strongly since last Wednesday after it saw plenty of support around $37,500 – the 38.2% retracement of the July lows to highs.
“Now very much back into bullish territory, the question is how far it can go this time around.
“In the near-term, getting back above $50,000 will be the next test, although it could see some resistance around $47,000 – 50% retracement of April highs to June lows.”
A popular cryptocurrency synonymous with the rising crypto trend of NFTs, Ethereum has an all time high of $4,382.73 which it reached in May’s cryptocurrency boom, but it has struggled to return to this peak since.
The hype surrounding popular memecoin Dogecoin had appeared to diminish recently as new altcoins took centre stage, but it has likewise shown considerable growth – trading at $0.277029 (£0.200687) at 9.14am on Friday.
What is crypto mining?
Cryptocurrency mining describes the process whereby Bitcoin, or similar coins like Ethereum, XRP or Dogecoin, are given to users as a reward for solving computational puzzles to verify and validate ‘blocks’ of transactions.
These are then added to a blockchain, helping to increase its value through clean, valid transactions, with miners rewarded for doing so with cryptocurrency.
As a decentralised network and form of currency, the lack of banks and infrastructure to authenticate transactions and exchanges means that mining is essential to the functioning and value of any cryptocurrency.
So clampdowns by state authorities on the activity – especially in countries where lots of mining takes place – will cause drops in the price and value of Bitcoin.
A provision currently contained in the US Infrastructure Bill has raised fears for crypto miners and the country’s booming cryptocurrency sector.
With an expanded definition of ‘broker’ to include many miners and small developers working in the industry, the provision would make crypto miners and transaction validators vulnerable to the Internal Revenue Service’s strict reporting requirements.
Digital rights campaigners and leading voices in the crypto sector have been sounding the alarm over the bill’s provision, with many claiming that it would lead to enhanced surveillance over citizens operating in digital, decentralised spaces.
Lia Holland, campaigns & communications director at US digital rights non-profit, Fight for the Future, called the bill in its current form “unworkable” and said that it “fundamentally misunderstands how cryptocurrency and decentralisation works.”
The trillion dollar Infrastructure Bill, having passed with a majority of 39 senators and without amendments lodged by bipartisan senators to tackle the crypto provision’s wording, will now be debated in the US House of Representatives.