From the Senate's infrastructure bill to Ethereum's major upgrade, here are the 5 key things that happened in crypto this past week.
Bitcoin and ether are surging as the Senate continues to debate crypto tax provisions in the $1 trillion infrastructure bill.
The price of bitcoin, the most valuable cryptocurrency by market capitalization, surpassed $46,000 on Monday morning, while the price of ether increased by nearly $3,000. Bitcoin is currently trading at around $45,950 EST at 2:00 p.m., while ether is selling for around $3,150 EST.
Here are five things that happened in crypto this week, in addition to the proposed infrastructure bill.
1. The NFT market continues to boom
The market for nonfungible tokens, or NFTs, has surged over the last week.
The trade volume on OpenSea, one of the main platforms for NFTs, has topped $428 million in just the last seven days, according to DappRadar.
During that time period, the CryptoPunk and Axie Infinity collections generated over $134 million and over $220 million in trading volume, respectively.
2. The new SEC chair says the cryptocurrency business requires additional investor protection
The new United States of America Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), made news last week after expressing his views on cryptocurrency regulation.
“While I am uninterested in technology, I am attracted by it... “When it comes to investor protection, I'm not neutral,” Gensler told Bloomberg on Tuesday. “If someone wants to speculate, it is their decision; nevertheless, as a society, we have a responsibility to protect those investors against fraud.”
During his speech at the Aspen Security Forum on Tuesday, Gensler alluded to plans to regulate crypto exchanges and decentralised finance, or DeFi, platforms.
On Wednesday, Gensler told CNBC, "I support innovation, but we also need rules of the road."
3. Ethereum's big London upgrade was enabled
On Thursday. Ethereum, the blockchain that runs ether, received a huge upgrade.
The Ethereum Improvement Proposal (EIP) 1559 included in the London upgrade aims to enhance the way transaction charges, sometimes known as "gas fees," are calculated.
Users must currently bid on how much they are prepared to pay for their ether transaction to be picked up by a miner, which can be very expensive. This process will be managed by an automated bidding mechanism with a defined charge amount that varies depending on how busy the network is under EIP-1559.
Another significant change introduced by EIP-1559 is that a portion of each transaction fee will be burned, or removed from circulation, reducing the supply of ether and potentially increasing its price.
EIP-1559 will neither reduce gas fee prices or network transaction costs, which can be very high. The upgrade is significant, though, because it has the potential to improve Ethereum's user experience while also reducing the amount of ether and perhaps increasing its price.
4. Binance.US CEO resigns
After three months as CEO of Binance.US, the US affiliate of crypto exchange Binance, Brian Brooks resigned on Friday.
“Welcome to the #crypto community. I'm writing to inform you that I've resigned as CEO of @BinanceUS. Despite our disagreements in strategic direction, I wish my former colleagues the best of luck,” Brooks, a former top financial regulator in the United States, tweeted.
Binance has recently been the subject of regulatory scrutiny and compliance setbacks in the United States and around the world, but it is unclear whether this influenced Brooks' decision to resign.
5. Crypto advocates lobby Senate’s infrastructure bill
On August 1, the Senate released its proposed infrastructure bill, which included a clause that would place stricter restrictions on how "digital assets" are taxed.
In addition to reporting transactions of more than $10,000 to the Internal Revenue Service (IRS), which is already required, the provision would force brokers to record gains in a sort of 1099 form.
Crypto proponents asked lawmakers to clarify the definition of a "broker," but the clause drew criticism.
The measure now defines a broker as “any individual who (for a fee) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person,” which supporters argue is too broad. One major worry is that the present definition would apply to miners, developers, stakers, and others who do not have clients and hence would not have access to the data required to comply.
As a result, crypto proponents worked hard for the bill this week, and Sens. Pat Toomey (R-Pa.), Cynthia Lummis (R-Wyo.), and Kyrsten Sinema (D-Ariz.) introduced it on Monday. and Ohio Republican Rob Portman suggested a compromise measure. By Tuesday, the Senate must reach a unanimous decision on this compromise proposal.
