By Yasin Ebrahim
Investing.com – Bitcoin surged to top $46,000 Monday, as crypto investors cheered news that U.S. lawmakers have reached a compromise on cryptocurrency tax provisions that seeks to exempt non-broker businesses from burdensome regulatory reporting requirements.
Bitcoin rose 5% to $45,964, and had hit a high of $46,460.7 earlier in the day.
U.S. Senators Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) at a press conference in the Senate on Monday unveiled a new compromise on cryptocurrency tax provisions included the infrastructure bill that seeks to clarify the definition of “broker.”
In the original text of the legislation, the definition of “broker” was loosely defined. "Developing digital assets or their core responding protocols for use by other persons, provided that such other persons are not customers of the person developing such assets or protocols."
The loose definition of "broker" had raised fears that non-broker type entities including software developers, node operators and validators would come under burdensome regulatory reporting requirements.
The senators’ amendment, however, seeks to exempt non-broker type entities from the legislation.
“We’re not proposing anything sweeping or anything radical – [the compromise] makes clear that a broker means only those persons that conduct transactions where consumers buy, sell and trade digital assets,” Toomey said in a press conference Monday.
The amendment was backed by Treasury Secretary Janet Yellen, but the senators face a race against the clock to get the amendment in the infrastructure bill, which is on a path to a vote Tuesday morning.
"There have been some delays. But the Senate is on track to finish both," Senate Majority Leader Chuck Schumer on Monday said the bipartisan infrastructure bill was on a "glide path" to passage early Tuesday morning.
The move higher in bitcoin comes as the fundamentals including metrics that measure whether traders are making a profit or loss on BTC continue to recover.
The short term holder (STH) SOPR metric, an on-chain metric, rose above 1.0 for the first time in months. “This signals profits are realized, and the market was able to absorb that supply,” according to on-chain market intelligence provider Glassnode. “Most important to watch is whether SOPR holds above 1.0.”
In other bullish sign for BTC, the longer term holders of BTC continue to ramp-up buying.
“[W]e have seen an extraordinary recovery of Long-Term Holder owned coins, with total supply held approaching 12.48M BTC,” Glassnode added. “This is extremely similar to the volume of coins held by LTHs in October 2020 before the primary bullish impulse started.”