XRP News Today: Biden’s Tax Rule Fuels Crypto Volatility—Impacts XRP and BTC

War on Crypto: Biden Crypto Tax Rule Hits XRP

On Friday, December 27, the Biden administration finalized its crypto broker tax reporting rule. Bill Hughes, a lawyer at Consensys and formerly with the Department of Justice, shared details about the incoming tax rule, stating,

“Treasury/IRS has finalized their DeFi broker tax reporting rule. Trading front ends would have to track and report on user activity – both US persons and non-US persons – starting 2027. And it applies to the sale of every single digital asset – including NFTs and even stablecoins (all cost no benefit from a revenue perspective).”

Hughes added,

“First, a lawsuit will be filed claiming that the rule is beyond the authority of Treasury and violates the Administrative Procedure Act. Later, the rule will likely come under Congressional review where it can be disapproved of, like this year’s vote on SAB 121. The outgoing administration is not leaving quietly. The fight continues.”

The Biden administration’s move against the digital asset space comes with less than a month remaining until Trump’s inauguration. It also reflects the administration’s stance on crypto despite the election result.

SEC vs. Ripple: Appeal Uncertainty Remains an XRP Headwind

The ongoing SEC v Ripple case remains a focal point. The agency requested a 90-day extension in October to file its appeal-related opening brief, taking the deadline to January 15. The SEC intended to appeal against the summary judgment and final judgment. An appeal against the summary judgment would be significant as it would challenge the Programmatic Sales of XRP ruling.

In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP did not satisfy the third prong of the Howey Test.

If the SEC successfully overturns the ruling on appeal, XRP would fall under the SEC’s purview, likely resulting in exchanges to delist the token, significantly impacting demand.

However, markets expect the incoming SEC Chair Paul Atkins to withdraw the appeal, supporting Trump’s pro-crypto agenda. Such a move could support XRP, which remains above $2 despite recent price dips linked to regulatory uncertainty.

XRP Price Trends: Can It Revisit $3?

On Friday, December 27, XRP slipped by 0.42%, following Thursday’s 6.21% tumble, closing at $2.1446. XRP outperformed the broader market, which declined by 0.96% to a market cap of $3.210 trillion. The US administration’s anti-crypto maneuvers and the likelihood of the SEC filing its appeal left XRP in the red.

Near-term trends depend on the SEC’s appeal strategy. If the SEC files its opening brief, XRP could slide below $1.50. Conversely, a withdrawal could fuel XRP demand, driving the token toward its January 2018 all-time high of $3.55.

Unlock Exclusive XRP Price Insights: Discover what the SEC’s next move could mean for XRP’s future. Don’t miss our expert analysis here – read now!

Bitcoin Price Trends: Regulatory Pressures and Risk Sentiment Weigh on BTC

On Friday, bitcoin (BTC) dropped below the crucial $95k level amid uncertainty about the Fed rate path. US Inflation concerns weighed on riskier assets, including the Nasdaq Composite Index, BTC, and the broader crypto market. The Nasdaq Composite Index slid by 1.49% on Friday.

BTC faced additional pressure from the DeFi broker tax reporting rule, which could disrupt the supply-demand balance.

US BTC-Spot ETF Trends Add Volatility

Risk aversion also affected the US BTC-spot ETF market. According to Farside Investors:

• Fidelity Wise Origin Bitcoin Fund (FBTC) registered net inflows of $208.2 million.
• ARK 21Shares Bitcoin ETF (ARKB) had net inflows of $112.6 million.

Excluding BlackRock’s (BLK) iShares Bitcoin Trust’s (IBIT) net inflows totaled $367.3 million. The US BTC-spot ETF market could report net outflows for the fifth time in six sessions, keeping BTC below the $100k psychological level and its all-time high of $108,231.

Corporate Adoption Boosts Long-Term Prospects

Amid market volatility, Bitwise filed for a Bitcoin Standard Corporations ETF. On Friday, ETF Store President Nate Geraci shared news of a new ETF filing, saying,

“Bitwise files for Bitcoin Standard Corporations ETF. Would own stocks of companies that have adopted the ‘bitcoin standard,’ which they define as holding at least 1,000 BTC in corporate treasury. The BTC treasury operations virus is spreading.”

The filing coincided with Fox Business journalist Eleanor Terrett sharing a list of the top 60 companies holding BTC.

According to the list, the Bitwise ETF could invest in 22 companies with 1,000 BTC or more. These include MicroStrategy (MSTR), Marathon Digital (MARA), Tesla (TSLA), and Coinbase (COIN). Other firms are on exchanges in Thailand, Singapore, Norway, Japan, Hong Kong, Germany, and Canada.

The Bitwise ETF and increasing corporate adoption of BTC could tilt the supply-demand balance in BTC’s favor.

Bitcoin Price Outlook

On Friday, December 27, BTC dropped by 1.52%, following Thursday’s 3.74% decline, closing at $94,242.

Near-term BTC price trends will hinge on US BTC-spot ETF activity, US government crypto maneuvers, and strategic bitcoin reserve (SBR)-related updates.

Spot ETF outflows and a US government BTC sale could weigh on BTC demand, potentially dragging BTC toward the $90,742 support level. Conversely, BTC inflows and progress toward BTC becoming a strategic reserve asset may drive BTC toward $100k.

Market Outlook for XRP and BTC

As 2024 draws closer to an end, XRP and BTC face critical junctures. The SEC’s decision on Ripple and the trajectory of BTC-spot ETF flows could redraw the broader crypto landscape. Regulatory developments and macroeconomic factors remain key drivers in determining the crypto market’s direction. Stay informed with our expert insights and analysis here.