On Tuesday, November 16, Bitcoin dropped below $60,000 after reaching a record high of over $69,000 four days ago. After the 12% dip, the price of BTC rebounded to $60,500.
The reason behind the price drop isn’t 100% clear, although it did happen hours after China announced it will strengthen its crypto mining clampdown. Another possible reason is that President Biden has signed an infrastructure bill that could make crypto trading more difficult for Americans.
China Continues Bitcoin Mining Crackdown
It’s been nearly two months since China announced its plan to end crypto mining and trading activities in the country. The next major development happened on Tuesday, when Meng Wei, the spokesperson of China’s National Development and Reform Commission confirmed that the government is launching a “full-scale” battle against the crypto mining industry.
One of the methods China will use to deal with crypto mining is to increase the price of electricity to those institutions that are found to be using it to mine cryptocurrency. In China, the government is giving access to subsidized electricity to public welfare institutions, some of which, apparently, have been using it for crypto mining purposes.
According to Meng, the reason behind China’s crypto mining clampdown is that the industry is “extremely harmful” and that it could cause serious problems to the government’s plan to reduce carbon emissions. As a reminder, this isn’t the first time someone has spoken against cryptos in this context.
A while back, Tesla founder Elon Musk decided to stop using BTC as one of the payment methods in his company, citing environmental issues as the reason. His decision to renounce bitcoin caused one of the biggest price crashes in the history of BTC.
BTC Drops After Biden’s Infrastructure Bill Comes into Force
On Monday, November 15, US President Joe Biden signed into law a $1.2 billion infrastructure bill. The reason why the news is important for cryptocurrency enthusiasts is that includes tax reporting provisions that apply to digital currencies.
As per the new bill, brokers are required to report cryptocurrency transactions to the IRS as a 1099 form, revealing the personal details of the customers along the way.
For some crypto proponents, this could mean the end of Bitcoin as we know it. They argue that one of the main selling points of cryptos is their anonymity, which would disappear once the bill comes into force.