Leading cryptocurrencies are climbing again after some volatile trading early in the week. Bitcoin (CRYPTO:BTC), Ethereum‘s (CRYPTO:ETH) Ether token, and Dogecoin (CRYPTO:DOGE) were up roughly 3.1%, 6%, and 3.8%, respectively, as of 4:15 p.m. EDT on Wednesday.
Top cryptocurrencies fell on Monday as House Democrats announced new tax proposals that could mean higher taxes for high-frequency crypto traders. Comments from SEC Chair Gary Gensler on Tuesday also suggested that components of the broader crypto market could soon face heightened regulatory scrutiny, but Bitcoin, Ethereum, and Dogecoin are still enjoying bullish momentum.
Speaking in a Senate hearing on Tuesday, Gensler stated that stablecoins and crypto staking and lending services may fall under the regulatory body’s jurisdiction. House Democrats are also aiming to implement new tax rules that would see cryptocurrencies treated more like securities and subjected to wash-sale rules, likely resulting in greater tax liabilities for short-term crypto traders. While new taxation and regulatory developments continue to represent significant risk factors, crypto investors may be relieved that most of the main changes currently being discussed are relatively limited in scope.
There’s a good chance that cryptocurrencies will eventually be subject to new regulations and tax classifications in the U.S. and other territories. The details and extent of these potential changes, and the impact new regulations and oversight might have on top crypto tokens, remains less clear.
Recent news from the SEC and U.S. legislators does not appear to have radically altered the broader crypto landscape, but investors should approach Bitcoin, Ethereum, and Dogecoin with the understanding that there’s a mix of uncertainty and opportunity on the horizon. Cryptocurrencies may not be a great fit for investors without a high tolerance for volatility and risk, but some digital assets may have things to offer for those seeking explosive gains or portfolio diversification and potential protection from inflation and geopolitical factors.
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