Bitcoin Slides After Chinese Warning, US Law

Bitcoin fell around $60,000 on Tuesday, after it had been hit by a blend of bearish factors, including the US infrastructure bill that imposes tougher rules on cryptocurrencies trading taxes and a new warning from China to firms regarding mining.

Bitcoin fell by more than 10% at one point, dropped below $60,000 low at certain points during trading session for the first time since late October. It was eventually trading at around $60,604, marking a near-8% drop over the last 24 hours.

Biden’s spending bill is primarily to upgrade America’s public works system. But it also comes with some new rules for crypto brokers, who must now report transactions worth over $10,000 to the tax authorities.

Critics say the term “broker” is extremely vague and the new regulations could mean other market participants such as miners, traders and node operators who have also to comply with the tax surges on digital assets which are meant to raise $28 billion, according to the New York Times.

The new legislation is expected to have an indirect impact on cryptos, as service providers may begin to charge higher fees to compensate for the taxes levied on them.

China renewed its tough stance on the crypto market with a new warning to state owned firms to stop mining tokens, as the Chinese government seeks to clean up the sector and limit its carbon footprint.

Beijing is considering measures such as raising power prices for any institution found to have violated the rules.