The U.S. Internal Revenue Service head called for lawmakers to provide authority for tighter reporting rules on crypto transfers.
On Tuesday, IRS chief Charles Rettig said that Congress needs to provide clear statutory authority for the tax agency to collect information on cryptocurrency transfers valued at over $10,000 that largely go unreported.
Rettig said before the Senate Finance Committee that cryptocurrency market capitalization is over $2 trillion, with more than 8,600 exchanges worldwide. “By design, most crypto virtual currencies are designed to stay off the radar screen, so we will be challenged right now.”
Earlier a spokesperson for British fund manager Ruffer Investment Management confirmed that it exited its bitcoin bet in April with a $1.1 billion profit amid worries over risk after quick gains in the cryptocurrency’s price.
In November, Ruffer made its bitcoin bet in what was then one of the largest signals of rising institutional interest in the digital currency. By mid-December, it was worth around 550 million pounds ($745 million).
“Long term, we remain interested in digital assets and the role they can play in real wealth preservation,” the spokesperson said. “In the short term, following the sharp increase in the bitcoin price, we felt bitcoin was exhibiting more risk.”
Ruffer’s bitcoin profit was first reported by The Sunday Times.
Bitcoin’s recent bounce has yet to dispel doubts about its vulnerability.
The cryptocurrency has jumped 10% over two days and was trading at $36,993 as of 9 a.m. In London on Thursday. While the momentum may cheer bulls, a JPMorgan Chase & Co. The team said backwardation in the futures market — where the spot price is above futures prices — is a reason for caution.
“We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note. They added that Bitcoin’s relatively depressed shares of total crypto market value are another concerning trend.
Traders are waiting for the next catalyst to break Bitcoin from a $30,000 to $40,000 range that has been in place since a collapse from a record of almost $65,000 in April. Public criticism of the digital currency’s energy needs by tycoon Elon Musk and a Chinese regulatory crackdown are among the obstacles. The bulls got a bit of a lift Wednesday after El Salvador made Bitcoin legal tender.
The June 9 analysis from JPMorgan looked at the 21-day rolling average of the 2nd Bitcoin futures spread over spot prices. The backwardation this showed is an “unusual development and a reflection of how weak Bitcoin demand is at the moment from institutional investors” who use contracts listed on the Chicago Mercantile Exchange.
The Bitcoin futures curve was in backwardation for most of 2018, a year when the cryptocurrency fell 74% after a spectacular boom, JPMorgan said.
Meanwhile, Bitcoin’s share of the overall crypto market value is 42% currently, down from roughly 70% at the start of the year, according to data from tracker CoinGecko. For some analysts, that is in part a sign of retail-driven investor froth lifting other coins.
Bitcoin’s share may need to top 50% to make it easier to argue the current bear market is over, the JPMorgan strategists said.
Bitcoin Short (Sell)
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