US Infrastructure Bill 2021 and Bitcoin

[JohnBitCo]

What will be the impact of US Infrastructure Bill 2021 on bitcoin ? Many people are saying that bitcoin will dump on this event but i fell otherwise. When everyone is anticipating a dump, we may see opposite. Also bitcoin is moving in falling wedge pattern and a pump is more likely to happen.

[Upgrade00]

It would help to drop a link and a summary of the bill and why it should have any effect on bitcoin at all.

Here's an article and another I could find on it, and if I understand it correctly, it suggests there would be stricter regulation of cryptocurrency through taxations and the use of ambiguous words in the bill makes it unclear who exactly would be affected.
If it would have an effect, it would likely only be short term and with time the position of the Senate and the IRS would become clearer, it also has the potential to be bullish as it shows growing acceptance of digital assets by the government.

[Poker Player]

When the bill was being discussed, and was resolved unfavorably, the price went up, if I recall correctly, at least most of the time, and I remember commenting on it. But maybe it was because there was still time until it was actually implemented and it could still be changed.

[JohnBitCo]

When the bill was being discussed, and was resolved unfavorably, the price went up, if I recall correctly, at least most of the time, and I remember commenting on it. But maybe it was because there was still time until it was actually implemented and it could still be changed.

If they talk about regulating crytpo and put more restrictions on the exchanges, then for sure this will lead to panic and bitcoin might dumo. The problem with the dump is that it take few hours for bitcoin to dump few thousand dollars but recovery takes days, weeks and in some cases months.

[o_e_l_e_o]

What will be the impact of US Infrastructure Bill 2021 on bitcoin ?

The bill is awful for bitcoin. I don't often recommend reddit posts, but there is one here everyone in the US should read: https://www.reddit.com/r/Bitcoin/comments/pr7fow/new_shocking_us_crypto_regulation_far_more/. Also have a read of this thread: https://bitcointalk.org/index.php?topic=5360520

In short, it heaps a whole bunch of new regulations on bitcoin and exchanges, tries to penalize anyone who takes their privacy seriously, tries to outright ban stablecoins, tries to make everyone who uses bitcoin responsible for collecting the tax details of the other party they are transacting with, and a whole host of other completely ridiculous things. In short, it makes using bitcoin legally an absolute nightmare, and thereby paves the way for the launch of a centralized digital USD. The whole point of the bill is that they don't want people to be able to use a currency that they don't control. So they heap a pile of ridiculous regulations on it in the hope that most people will choose the path of least resistance and opt for the digital dollar, which they can freeze, seize, and print more of at will.

If you only care about what the price of bitcoin will do in relation to this bill, then you are missing the point. You should be contacting your representatives now and telling them to either vote against this bill or to introduce amendments to fix its insane anti-bitcoin provisions.

[LFC_Bitcoin]

When the bill was being discussed, and was resolved unfavorably, the price went up, if I recall correctly, at least most of the time, and I remember commenting on it. But maybe it was because there was still time until it was actually implemented and it could still be changed.

I was expecting the price to dump when it was, some might say unfavourable towards bitcoin. I would say that maybe it shows the market is maturing & starting to not care about governments temper tantrums any more but we’re currently in a correction due to China so who knows. The market does strange things at times.

[Lucius]

Considering everything I’ve read about what this bill can cause in the US, and then indirectly in the rest of the world, I think we should all be worried about what’s going on right now. The fact is that the world revolves around the US, not the other way around - and that any law that comes into force there will come to other countries of the world (in an easier or harder way) sooner or later.

I also wondered why the crypto market does not react to what is happening in the US, and @o_e_l_e_o pointed out to me one important fact - if the bill is accepted in its current form, it will not take effect until early 2023. Consequently, at this time next year, we may have a big discussion about how the US banned Bitcoin in 101 threads throughout the forum.

[DaveF]

Considering everything I’ve read about what this bill can cause in the US, and then indirectly in the rest of the world, I think we should all be worried about what’s going on right now. The fact is that the world revolves around the US, not the other way around - and that any law that comes into force there will come to other countries of the world (in an easier or harder way) sooner or later.

I also wondered why the crypto market does not react to what is happening in the US, and @o_e_l_e_o pointed out to me one important fact - if the bill is accepted in its current form, it will not take effect until early 2023. Consequently, at this time next year, we may have a big discussion about how the US banned Bitcoin in 101 threads throughout the forum.

It's also one of those annoying things about the way the US works.
They write the bill, they discuss the bill, people hate the bill and try to convince their representatives to vote against it. But, there is very little chance that they change a lot of it before it's passed.

Then the legal challenges start. Coinbase / Gemini / you & I / etc. cannot start legal challenges till it's passed. Because, until it's passed there is nothing to challenge.
So, we sit and wait.

-Dave

[o_e_l_e_o]

The fact is that the world revolves around the US, not the other way around - and that any law that comes into force there will come to other countries of the world (in an easier or harder way) sooner or later.

Even without this bill in the US, other countries will start passing similar laws. It's the same underlying thing which is happening in China right now - they want people to use their upcoming CBDCs instead of bitcoin.

I also wondered why the crypto market does not react to what is happening in the US, and @o_e_l_e_o pointed out to me one important fact - if the bill is accepted in its current form, it will not take effect until early 2023.

Partly because a lot of people don't know what is in the bill, partly because the bill hasn't actually passed yet, partly because it won't take effect for a few years if it does pass, and partly because there is still time to challenge or amend it during that time.

Then the legal challenges start. Coinbase / Gemini / you & I / etc. cannot start legal challenges till it's passed.

I'm more than a little disappointed we haven't seen big exchanges lobbying Senators or House Reps to amend this bill. More than happy to profit from the community, but don't stand up to defend that community when it counts. Hell, knowing Coinbase they are probably already working on the most efficient way to screw over their users by complying with all these new regulations.

[DapanasFruit]

It would be safe to say that the whole cryptocurrency industry remains not in favor on this Infrastructure Bill and there are many reasons for that. unfortunately, the bill that was approved is not really favorable to all players within the industry. However, it does not mean that it would be the end of Bitcoin for that matter. This is a taxation law and is not really a bill focusing on cryptocurrency. Once it can be finally approved by the White House, we will see how it can be implemented. Anyway, the very idea of taxing something entails that you are generally recognizing that something is existing so this is the advantage of the bill - that recognition aspect of Bitcoin and the crypto business.

[pooya87]

Obviously the government passing restricting laws, such as what seems to be this bill, will slow down the adoption of bitcoin and can cause short term "drama" in the market, but have we forgotten that bitcoin was created to be decentralized and not care what the centralized authorities say?

Besides technically speaking a law that affects only 3% of the world (ie. US population) should not change anything about bitcoin's future. Granted some weakling countries such as parts of Europe could possibly follow if pressured, but you think people in El Salvador, Japan, Venezuela, Switzerland, Germany, Ukraine, Iran, most of Asia and ... give a shit what law US passed? In fact this could be a golden opportunity for other countries. Big companies each with billions of dollars of revenue could easily migrate to those countries and bring with them a lot of money and jobs.
For example look at what China did some time ago to their miners. Now Iran is absorbing a shitton of hashrate as miners migrated and they already had the farms ready and were growing.

[franky1]

tries to make everyone who uses bitcoin responsible for collecting the tax details of the other party they are transacting with

no it does not.
it requests businesses that offer a service to be a middleman for other parties to report.
but to be a business that offer a service to be a middleman for others you need to register as an MSB anyway

in short it affects brokers aka exchanges, escrows, remitters, altnet routers

calm down the fud.
accepting bitcoin for a coffee, or any product is not a broker otherwise fiat grocery stores would be brokers.
this is not the case. just accepting transactions is not what a broker does.

maybe try not to read reddit as much. and instead read the wording of the bill itself. without all the social drama of fud.

with that said. yes it allows businesses that are already MSB with a reporting portal to carry on with minimal change. where as newbies wanting to become exchanges now have an extra hurdle to jump to become valid exchanges in the eyes of the law.
the biggest impact is going to be them altnets that offer 'routing' services for users. as thats where the extra tax income the government predict will come from.
meaning regulated 'routes' would have to charge higher payment fees, making the altnets that offer 'faster payments' more expensive than promoted over the last 4 years

[Lucius]

Besides technically speaking a law that affects only 3% of the world (ie. US population) should not change anything about bitcoin's future. Granted some weakling countries such as parts of Europe could possibly follow if pressured, but you think people in El Salvador, Japan, Venezuela, Switzerland, Germany, Ukraine, Iran, most of Asia and ... give a shit what law US passed?

The EU is much weaker than it may seem to someone, we just need to remember how the leader of the same EU (Germany) reacted when it was discovered that the US secret services were eavesdropping on the German Chancellor - almost nothing happened, and it was a political scandal for which the US would crucify a country and impose all possible sanctions on it if it happened to them. The strong influence of the US on the EU has lasted since the end of World War II and the fact that there are still about 90 000 American soldiers there - who or what are they keeping 80 years after the end of the war?

Japan is more or less also under the influence of the US, something similar to Germany, there are over 50 000 American troops there - and if you look at the relationship between the two countries, Japan mostly does everything it is asked of. Ukraine is perhaps the easiest target of all, as it depends directly on US assistance to prevent further loss of territory to which Russia does not hide its claims - so it will pass any law that suits the US.

You have forgotten India as the second-most populous country in the world that fully supports the US, and one should only remember that they literally copied every American decision when it came to US sanctions against China.

The only countries that openly oppose the US are North Korea and Iran, which are still avoiding the fate of Iraq and Afghanistan, but it is only a matter of time before they feel the power of Western democracy on their skin.

[stompix]

Besides technically speaking a law that affects only 3% of the world (ie. US population) should not change anything about bitcoin's future.

Except that those 3% hold 30% of the total wealth in the world.
And another 18% of the global population holding the same 18% of global wealth has just cut crypto from its economy a week ago.

but you think people in El Salvador, Japan, Venezuela, Switzerland, Germany, Ukraine, Iran, most of Asia and ... give a shit what law US passed? In fact this could be a golden opportunity for other countries. Big companies each with billions of dollars of revenue could easily migrate to those countries and bring with them a lot of money and jobs.

Yeah right, Apple and Tesla and Mercedes are going to migrate to Venezuela and Iran because of bitcoin....
Doesn't matter that these countries have the habit of nationalizing everything, companies will be thrilled to move there.

Right now there is only one country that matters, and that is the US, like it not this is reality.

[o_e_l_e_o]

Anyway, the very idea of taxing something entails that you are generally recognizing that something is existing so this is the advantage of the bill - that recognition aspect of Bitcoin and the crypto business.

This is meaningless. The government obviously recognize that bitcoin exists, since they already tax it as a property and already ask literally everyone about it as part of their 1040 tax form. Taxing it more or heaping more regulations on to it is not a good thing because the government will somehow recognize it more.

no it does not.
...
maybe try not to read reddit as much. and instead read the wording of the bill itself.

Yes, it does. Have you read the wording of the bill itself?

You can read the text of the bill here: https://www.congress.gov/bill/117th-congress/house-bill/3684/text. Please see Section 80603, Part (b) Reporting of Digital Assets, Part (3):

Treatment as cash for purposes of section 6050i.

Now let's look at 6050i here: https://www.law.cornell.edu/uscode/text/26/6050I. Anyone who makes a trade (or a series of related trades) worth more than $10,000, must file a return containing the name, address, and TIN (Taxpayer Identification Number) of the person they are trading with. The TIN is most commonly the other party's SSN.

So if you trade ~0.23 BTC with anyone, even if split over multiple trades, you need to collect their tax details and report it to the IRS.

[DaveF]

I'm more than a little disappointed we haven't seen big exchanges lobbying Senators or House Reps to amend this bill. More than happy to profit from the community, but don't stand up to defend that community when it counts. Hell, knowing Coinbase they are probably already working on the most efficient way to screw over their users by complying with all these new regulations.

*Not* defending them, but it might just be a better allocation of resources.
Lobbying is big money, and usually quiet. Bringing a big lawsuit generates good press (free good PR) and can get others to join (Coinbase starts the lawsuit and other exchanges join in) so there is lower cost to each company overall.

Also, if they play the game right, they can get an injunction so the law is not enforced till the court case is done. So there is that. Not saying that is what happened, but I have seen it happen with other things.

Now let's look at 6050i here: https://www.law.cornell.edu/uscode/text/26/6050I. Anyone who makes a trade (or a series of related trades) worth more than $10,000, must file a return containing the name, address, and TIN (Taxpayer Identification Number) of the person they are trading with. The TIN is most commonly the other party's SSN.

So if you trade ~0.23 BTC with anyone, even if split over multiple trades, you need to collect their tax details and report it to the IRS.

Technically you are supposed to do this for a lot of things. If I sell you a 1oz bar of Rhodium for $11000 in cash there is certain paperwork that must be filed. That nobody does. Because I am handing you a 1oz bar of metal and you are handing me a stack of cash. There is no trace.

-Dave

[pawanjain]

The current position of cryptocurrency is in a good shape in my opinion and even the charts seems like we have a little bullish movement in the coming weeks.
If the bill is approved and cryptocurrencies are regulated then I think this would boos the price further upwards since it would mean wider acceptance of cryptocurrencies.
Many number of merchants will start accepting cryptocurrencies and this might grow the number of people using cryptocurrencies on daily basis.
So this might create a positive impact on bitcoin and other popular coins.

[lixer]

What will be the impact of US Infrastructure Bill 2021 on bitcoin ? Many people are saying that bitcoin will dump on this event but i fell otherwise. When everyone is anticipating a dump, we may see opposite. Also bitcoin is moving in falling wedge pattern and a pump is more likely to happen.

Have you seen the bill yet? I think it is going to depend on what it is all about, and that’s what will determine whether it is going to affect bitcoin price or not. If it is not something that is going to affect bitcoin there, then it’s  it going to have any effect.

Moreover, I think it will be a harsh thing for them to do if they would suddenly turn against bitcoin there, because there are already lots of big cryptocurrency exchanges/companies there now, and doing something that would hurt them won’t be a good idea. Although I do know that if anything happens these companies will quickly move to other locations where it’s legal for them to operate.

[o_e_l_e_o]

Lobbying is big money, and usually quiet. Bringing a big lawsuit generates good press (free good PR) and can get others to join (Coinbase starts the lawsuit and other exchanges join in) so there is lower cost to each company overall.

The two are not mutually exclusive though. No reason an exchange couldn't do both, and indeed, only doing something if they think it will bring them good PR is even worse, but that's pretty much Coinbase's ethos through and through.

Because I am handing you a 1oz bar of metal and you are handing me a stack of cash. There is no trace.

Sure, but neither metal nor cash have a publicly viewable blockchain or multi-million dollar contracts from the US government to various companies to link individuals to specific pieces of metal. If you use centralized exchanges, then you won't really have an option but to start doing this since the government will already know all your addresses. I'm sure some people will try to avoid it as they do for other >$10,000 trades as you point out, but there will be a lot more government investigation of bitcoin trades than there will be of other cash trades.

[Hydrogen]

Basic fundamental ways US infrastructure bills could affect crypto

US infrastructure bills represent trillions of dollars in additional spending and inflation. Which could increase the value of inflation protected assets like bitcoin. Higher inflation could correlate with a greater number of people recognizing the dangers and seeking ways to protect their wealth. Which could drive cryptocurrency mass adoption to greater heights.

Inevitably taxes would need to be hiked to cover the enormous cost of these bills. Governments could be incentivized to find new revenue streams to balance the budget. Legalizing marijuana and cryptocurrency could be natural markets to nurture and protect in order to grow tax revenues. It all depends on state priorities.

I also wondered why the crypto market does not react to what is happening in the US

In 2020 there were news stories published about a virus in china negatively affecting supply chains, for weeks or months, before the market finally crashed.

Markets have failed to trend the way they naturally should for many years now.