No-hype conversations about crypto and blockchain.

A lot has transpired politically in the United States over the past week and is continuing to take place over the course of this week. So here is a recap of last week and what to expect in the following days as it relates to the cryptocurrency asset class.

The 2021 Infrastructure Bill

Bipartisan support in the Senate allowed the Infrastructure Bill to make blazing headway towards law but has been hung up by some rather lazy syntax. Historically, large spending bills like this that garner positive attention from the general public also tend to have numerous hidden agendas buried under heaps of legal jargon legible only to lawyers.

Such was the case with the current Infrastructure Bill and it's stance on the cryptocurrency industry. The original language in the bill sloppily defined the key term "broker" as an over-reaching description of important actors within the cryptocurrency industry. Specifically requiring that all "brokers" must supply the Internal Revenue Service with all customer information via KYC (Know-Your-customer) or other surveillance techniques. This included hardware suppliers, software developers, Proof-of-Stake and Proof-of-Work validators (including other consensus mechanism validators), and many other middlemen to comply with tax obligations. This would have been crippling for the industry as many software developers, node operators, validators etc. would be pushed out of the country and large crypto organizations would be forced to hire out of the country as well.

This blanket "broker" definition hidden in the original draft was in efforts to help pay for the $1.2 trillion dollar bill via taxation, in which was forecasted to bring $28 billion dollars of revenue over the course of 10 years. This was in addition to worries that many cryptocurrency investors/participants actively avoid taxation.

A Play-by-Play

On August 2nd, Senator Toomey (R) of Pennsylvania wrote up an amendment to fix the definition to exclude any non-financial intermediaries who simply lack the necessary tools to even acquire customer information (mostly by protocol design). The amendment was backed by Senator Cynthia Lummis (R) of Wyoming and Senator Krysten Sinema (D) of Arizona making the amendment bipartisan.

The next few days was a frantic dash to educate other Senators, call for public support, and lobby interests. The amendment was gaining sweeping approval coming into the voting period August 6th when Senator Rob Portman (R) of Ohio (who already supported the bipartisan Wyden-Loomey-Sinema amendment) proposed his version of an amendment that was a total retracement from the original amendment. A move some say was orchestrated by the US Treasury.

This new 11th-hour amendment only excluded Proof-Of-Work validators and a handful of wallet developers, leaving every other consensus mechanism, most importantly Proof-of-Stake, to dry. The amendment received support from Senator Mark Warner (D) of Virginia making it bipartisan as well.

Again, a call was made for public support in the Wyden-Loomey-Sinema amendment on the grounds of not choosing winners and losers via regulation in one of the most exponentially fast-paced industries in the world. As the Senator floor was split between the two options, again the crypto lobby gained favor in the with the more favorable amendment and was heading towards a bipartisan vote. Again, at the 11th hour, Senator Chuck Schumer (D) of New York has chose whether to not vote.

His decision to not vote pushes the amendment to the fringes after Senators struck a bipartisan deal with the U.S. Treasury to include the original favorable amendment. The only caveat is that it needs unanimous consent, which means zero opposing votes.

What Happens Next?

By 4 a.m. EST on Tuesday the Senate must move to a floor vote on the Infrastructure Bill. The looming question is will our amendment to the original text regarding cryptocurrencies be allowed in?

The Democrats are threatening the Republicans (who some are opposed to the Infrastructure Bill's revenue resolution) by refusing to allow anymore amendments, catching the cryptocurrency industry in the cross fire.

We will need a full unanimous consent between the Senators to avoid another vote to include the amendment and move to the floor for the broader vote on the Infrastructure Bill to pass to the House.

If there is not a unanimous decision to move the amendment into the bill, it will pass with the original text in the Senate, and we will have another shot in the House to change it.

How is this affecting Bitcoin?

BTC/USD Daily

The price action for Bitcoin has been resoundingly bullish recently. After a breakout of the 29-40k range, Bitcoin is already making an attempt at the 47.2k level, with a rally this afternoon in response to the U.S Treasury deal with Senators to include the Wyden-Loomey-Sinema amendment if they can get unanimous consent. The rally shot us through the round-number resistance of 46k we were playing with for the last 18 hours to a local high of 46.7k.

MacD looks to be starting an expansionary uptrend after breaking through the baseline to the upside. RSI is not quite over-heated but heading towards the top of the midrange highs at 70. OBV is setting higher lows on low time frames while volume is decreasing, showing slower momentum with tighter supply. This leaves Bitcoin in a neutral position in my opinion with heavy influence to upcoming news tomorrow. Expect downside if the amendment gets pushed or upside if it passes.

Conclusion

This has been the best week of news for crypto in the history of crypto. No matter what happens with the amendment, the crypto currency industry just proved how strong it is this weekend. Not only are we a force to be reckoned with on Wall Street, but on Capitol Hill as well.

The lobbying force showed massive support and strength and proved to political seats that the largest generation of young individuals have a vested interest in who is making decisions about crypto and therefore incentivizes the political democracy to act like a true democracy. I say that because it is apparent that unelected officials have weighted influence over our elected officials that could affect millions of United States Americans' chance at financial freedom with the hand of the US Treasury so vested in the Senate's crypto position.

This has been a strong week of support within the crypto industry to showcase our strength to the world and its political giants.

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