The crypto market is experiencing increased volatility following the Biden administration's new crypto tax reporting rule. Key cryptocurrencies such as XRP and Bitcoin (BTC) are facing pressure as regulatory uncertainty prevails.
On December 27, the administration finalized a crypto broker tax reporting rule that targets decentralized finance (DeFi), non-fungible tokens (NFTs), and stablecoins. This rule mandates trading platforms to track and report user activities for all digital asset sales by 2027. Legal experts indicate that this move has sparked legal and Congressional challenges, raising concerns about its implications for the crypto industry.
The Securities and Exchange Commission's (SEC) ongoing case against Ripple is nearing a critical deadline, with the agency's appeal potentially altering XRP's regulatory status. Should the SEC overturn previous rulings, XRP may face delistings from major exchanges, affecting demand. Conversely, a withdrawal of the appeal under a pro-crypto administration could drive XRP closer to its previous high of $3.55.
On the same day, XRP closed at $2.1446, marking a 0.42% decline amid broader market fluctuations. The token remains under pressure from regulatory uncertainty, with trends dependent on the SEC's forthcoming decisions.
Bitcoin (BTC) fell below the $95,000 mark, influenced by ETF outflows and the new tax policy. Volatility in the spot ETF market and concerns regarding Federal Reserve rate decisions have further affected BTC's price. However, corporate adoption presents a positive aspect, as new ETFs like the Bitcoin Standard Corporations ETF highlight BTC's growing role in treasury reserves.
BTC's short-term trends are closely linked to ETF activities and U.S. government crypto strategies. Spot ETF outflows could push BTC toward $90,742, while inflows and strategic reserve adoption might elevate it back toward $100,000. In the long run, increasing use of BTC as a corporate reserve asset could stabilize demand despite short-term volatility.
As 2024 approaches, both XRP and BTC face critical developments. Regulatory changes, including the SEC's Ripple case and ETF market dynamics, will influence their future trajectories. For investors, staying informed about these updates is vital to navigating the volatile crypto landscape.