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Here’s how institutional investors ignited Bitcoin’s rally to $40,000

Here’s how institutional investors ignited Bitcoin’s rally to $40,000

From the COVID-19 pandemic to mass-scale money printing and social unrest, 2020 was a wild year. Alongside a barrage of newsworthy events, Bitcoin (BTC) also turned in a standout year in the price category, ultimately rising from $3,600 to past $41,950, besting its 2017 all-time high of $19,892

A number of events, both crypto-specific and mainstream, appeared as catalysts for Bitcoin’s price action. Several crypto industry players weighed in on the events they believe affected BTC’s price action the most in 2020.

Morgan Creek Digital co-founder Anthony Pompliano labeled Bitcoin’s halving as the event with the greatest effect on the asset’s price action, according to his comments to Cointelegraph. “The incoming daily supply decreased and demand has increased significantly, which has led to an increase in the USD price,” Pompliano said.

Bitcoin’s halving occurred on May 11, 2020. The third such event since the asset’s launch in 2009, BTC’s halving resulted in miners receiving 6.25 BTC for block rewards instead of 12.5 BTC. Previous Bitcoin halvings brought price declines followed by sideways price action, although tremendous upswings eventually occurred after each halving.

The event in 2020 was no exception, as Bitcoin soared past record highs several months after the May event. The Bitcoin Stock-to-Flow model from analyst Plan B serves as a popular forecasting tool in the crypto space. The model predicts increasing future BTC prices based on halvings decreasing the asset’s incoming supply.

BTC/USD 1-week chart. Source: TradingView

Pierce Crosby, general manager for crypto asset charting platform TradingView, told Cointelegraph about three developments that he believes impacted the value of Bitcoin the most in 2020. The first aspect he noted: “Consumer continued adoption, apparent in Coinbase’s planned IPO.”

Major United States-based crypto exchange Coinbase recently filed with the Securities and Exchange Commission for approval to conduct an initial public offering. The move would take the company public, resulting in tradable company shares on the mainstream U.S. stock market. The news actually coincided with moderately downward BTC price action on the day of the development, although Crosby’s comment appears to indicate the IPO as simply a result of underlying and ongoing demand.

The “institutional adoption, seen in MicroStrategy’s treasury re-allocation to Bitcoin” was another rousing event on BTC’s price in 2020 according to Crosby. A slew of large mainstream companies unveiled large Bitcoin positions in 2020. It all began as billionaire hedge funder Paul Tudor Jones revealed his Bitcoin position in May 2020.

In the latter half of the year, business intelligence firm MicroStrategy picked up hundreds of millions of dollars in Bitcoin. Other firms, such as Jack Dorsey’s Square and MassMutual, also publicized BTC purchases as part of a buying trend for big players.

Bitcoin price appreciation as institutional investors stepped in. Source: TradingView

Crosby also said, “the boom of DeFi and the corresponding leveraged products that were built by this space” affected BTC’s price in 2020. Last year, a bevy of DeFi solutions entered the crypto industry, giving participants new ways of leveraging their capital.

Resembling 2017’s ICO bubble at times, decentralized finance moved significant money around in 2020. Related assets saw dramatic price swings, while shady projects also surfaced during the boom. Meanwhile, in line with the hype, Bitcoin rode an upward price trend toward record levels after recovering from its COVID-19-related price drop in March.

Speaking of the pandemic, Cheds, a crypto trader and analyst on Twitter, said COVID-19 steered Bitcoin’s price significantly last year.

Cheds said:

“COVID by far had the biggest impact on $BTC #Bitcoin price in 2020, taking it down from 8K down to around 3K briefly.”

Bitcoin price on Black Thursday. Source: TradingView

In March 2020, amid rapidly rising COVID-19 concerns and prevention measures, mainstream markets and crypto assets fell sharply in price. Bitcoin, however, rebounded more quickly than traditional financial assets. “Without a doubt, it sped up the process of finding a bottom, and since then, we have ripped back up to all-time highs, helped along by news of institutional investment,” Cheds said of the pandemic.

“Events like the public purchases of MicroStrategy and the addition of $BTC to PayPal’s arsenal have added a veneer of legitimacy that was missing, and help pave the way for even more of these types of investments in 2021,” Cheds added. PayPal unveiled the addition of multiple crypto assets to its platform back in October.

2021’s rally is driven by fundamentals, not FOMO

When asked what events had the least effect on Bitcoin’s price, Pompliano said, “most people’s opinion on Twitter,” with a smile. Meanwhile, Crosby pointed toward a detachment of Bitcoin from the political arena. “Very little impact came from politics this year, which is a substantial difference versus previous years,” he said. “We expect the impact of governments to be more visible with Bitcoin in 2021.”

Rounding out the year, the U.S. government proposed a ruling to monitor self-custodied crypto-asset wallets, for which the short comment period recently ended. The SEC also filed a movement against Ripple and its XRP asset in late-December. Both events could signal the beginning of increased government involvement.

Pompliano has often called Bitcoin a non-correlated asset when it comes to other financial instruments. An October 2020 report from Fidelity lends validity to such a view, concluding that Bitcoin holds virtually zero correlation to the price action seen across other markets.

Over the course of 2020, the world gave Bitcoin’s price plenty of headlines to react to. Some news events seemed impactful, while others did not, although definitively proving any direct correlation may be impossible.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

British financial advisor calls on the gov’t to ban crypto transactions

Neil Liversidge, a veteran financial advisor, has called on the government of the United Kingdom to ban transactions in cryptocurrencies like Bitcoin (BTC).

Liversidge, the owner of the independent financial advisory firm West Riding Personal Financial Solutions, started a petition urging local financial authorities to stop crypto transactions in the U.K. The petition reads:

“Legislate to prohibit the payment by or acceptance of cryptocurrencies by UK resident businesses or individuals, and require UK regulators (the FCA and PRA) to prohibit transactions by UK financial institutions in cryptocurrencies such as Bitcoin.”

Liversidge cited a common anti-crypto narrative, arguing that cryptos like Bitcoin have no intrinsic value and “can be a destabilising influence on society, and often used for criminal activity.” The advisor also thinks that cryptocurrency mining is “harmful to the environment.”

According to the U.K. Government and Parliament website, the petition’s deadline is July 7, 2021. At time of publication, the petition has collected 108 signatures.

In a Jan. 13 interview with finance-focused publication Professional Adviser, Liversidge noted that a blanket ban on crypto transactions in the U.K. will help the enforcement to reduce the power of criminals using cryptos like Bitcoin for illicit activity. “Law enforcement will never catch them all, it won’t even catch most of them, but destroying their financial base reduces their power,” the IFA argued.

Liversidge also said that a crypto ban would immediately trigger a crash on the market: “If the UK government takes a lead by banning transactions on cryptos as my petition requests, that will set off a chain reaction, crashing cryptos overnight,” he said.

The IFA’s verdict is that all crypto investors should immediately sell their holdings: “So if you’re holding cryptos now, my advice to you is to find a bigger fool than you and dump them quick.” Liversidge also told Cointelegraph that he has “never owned any and never would buy any,” crypto, even if he knew that it would bring him hundreds of percent of returns.

Bitcoin’s ongoing rally driving its price up to $42,000 has definitely pushed global Bitcoin naysayers to finally talk Bitcoin after mostly keeping silent in 2020. On Jan. 14, Russian State Duma member Anatoly Aksakov suggested that global authorities should ban crypto payments because Bitcoin is a bubble that is poised to burst “sooner or later.” On Jan. 13, European Central Bank President Christine Lagarde declared that Bitcoin is a “highly speculative asset” and a “funny business” helping money launderers.

Bitcoin slides under $35K despite Biden unveiling $1.9 trillion stimulus

Bitcoin (BTC) fell below $35,000 on Jan. 15 as renewed strength in the U.S. dollar piled pressure on the largest cryptocurrency. BTC bounced off support at $34,300 and is trading at $35,300 at the time of writing. 

BTC/USD 4-hour candle chart (Bitstamp). Source: Tradingvidw

Bitcoin heads back toward $30,000

Data from Cointelegraph Markets and TradingView shows BTC/USD hitting its lowest in over 24 hours at publication time on Friday, with $34,000 so far acting as support.

The previous day saw the pair reclaim $40,000 for a brief instant before falling back to range in a corridor that had formed at the start of the week. The latest drop reinforced the assumption that Bitcoin would continue in this corridor, which has $30,000 as support and $40,000 as a rough ceiling.

“#Bitcoin consolidating is very healthy for the market after the massive impulse move to $41,500,” Cointelegraph Markets analyst Michaël van de Poppe explained in a series of tweets.

“#Bitcoin is approaching a bounce area here as we rejected the crucial resistance around $40,000. Benefits the fact of further consolidation before continuation of the upwards momentum. Completely healthy.”

Halving analysis suggests “7x upside potential”

The fresh downturn for Bitcoin coincided with an uptick in the U.S. dollar currency index (DXY) coming on the back of President-elect Joe Biden’s $1.9 trillion coronavirus stimulus plan. Despite the gravity of this U.S. dollar supply expansion, markets appeared to react favorably to the plans, leading the DXY upwards at the expense of Bitcoin, to which it typically exhibits inverse correlation.

“Context: The dollar is breaking out on multiple time frames. Quite a strong recovery at a multi-month support area. Some argue this is bad for Bitcoin, gold and risk-on assets, hence the narrative,” Cointelegraph in-house analyst Joseph Young summarized.

BTC/USD (Bitstamp) vs. DXY (orange). Source: TradingView

Young noted that on derivatives markets, investors “buying the dip” was causing an extra headache, potentially dampening the prospects of a relief rally.

Zoom out, however, and Bitcoin was if anything underperforming compared with previous bull cycles. According to on-chain analytics resource Ecoinometrics, this left the door open for further conspicuous gains.

Bitcoin price post-halving comparison as of Jan. 15. Source: Ecoinometrics/Twitter

“This bull market doesn’t stop at $40k,” part of a tweet with a comparative chart read.

“From the growth of the previous cycles we still have a 7x upside potential.”

Crypto is going public: Timing is key as Bakkt secures NYSE listing

Digital assets marketplace Bakkt is set to go public on the New York Stock Exchange in 2021, which could pave the way for more cryptocurrency service providers to follow suit. The Intercontinental Exchange announced on Jan. 11 that its cryptocurrency marketplace Bakkt would soon be listed on the NYSE public stock market. This will be done through a merger with a special purpose acquisition company VPC Impact Acquisition Holdings.

The shell company will be used to merge with Bakkt in order for it to be listed on the stock market without having to undertake an initial public offering. Initial reports suggest that Bakkt will be valued at over $2 billion after the merger, and the exchange intends to raise a further $532 million to bankroll the ongoing development of its application, a wallet and rewards app targeting retail users, which is expected to be launched in March.

The company has indicated that the merger is expected to be wrapped up in the second quarter of 2021. This will then see the newly formed Bakkt Holdings Inc. listed on the NYSE.

A lot has been made of the investor presentation that was submitted to the U.S. Securities and Exchange Commission. The document outlines the potential for the cryptocurrency market to be valued at $3 billion by 2025, underpinning the potential value of the space in the coming years. The total cryptocurrency market capitalization topped $1 trillion for the first time in January 2021.

Bakkt CEO Gavin Michael told Cointelegraph that the merger makes sense, given the amount of capital that has already flowed into the cryptocurrency space and the potential growth it predicts over the next three years:

“Bakkt and VPC believe there is enormous potential in building a marketplace for the nearly $2T of digital assets that exist today and the many others that will be created because a marketplace such as this exists for both brands and consumers.”

Michael added that the merger will give Bakkt access to the necessary capital to expand and provide more opportunities for consumers to unlock trillions of dollars held across various digital assets. The company also expects to benefit from the brand recognition that will come from becoming a publicly-traded company.

A sign of things to come?

Mati Greenspan, crypto analyst and founder of advisory firm Quantum Economics, told Cointelegraph that the timing of the merger and Bakkt’s decision to go public is not surprising, given that the cryptocurrency markets are currently booming.

Noting that the move will no doubt be lucrative for Bakkt, Greenspan also agreed that the push to go public is an indication that the traditional finance sector is beginning to recognize cryptocurrency and blockchain-focused businesses as mature and valuable: “It’s a reflection of where these companies are in their life cycle and how it coincides with the readiness of the traditional market to accept them.”

While some major institutional investors like MicroStrategy have made waves across the industry with their billion-dollar purchases of Bitcoin (BTC) in recent months, Greenspan highlighted the efficacy of diversifying investment in the space. While holding cryptocurrencies is a direct way to gain exposure to the ecosystem, Greenspan said investing in the right companies could potentially be more beneficial:

“There is a natural appetite for all investors to be as diverse as possible. Just as one whose portfolio consists of gold would also invest in mining stocks or an oil tycoon would invest within their own industry. Many times investing in a company directly can be more lucrative than buying a token whose value may be unknown.”

Joel Edgerton, chief operating officer of U.S.-based cryptocurrency exchange bitFlyer, told Cointelegraph that the timing of the initial public offering was opportune, given the current market highs and a strong interest in cryptocurrencies. He also offered an alternative stance on the reasons behind the ongoing surge, suggesting that small investors and independent firms are driving the cryptocurrency boom: “Coinbase and Bakkt are taking advantage of the IPO window to allow their investors an exit event and use the subsequent publicity of their early moves to strengthen their brands.”

Edgerton also believes in the propensity of smart investors to fund companies involved in the cryptocurrency space without actually buying BTC or other altcoins. The lack of options to gain widespread exposure to cryptocurrency also plays a role:

“There is a definite appetite for investors to gain exposure to the cryptocurrency space by investing in crypto companies, while not directly holding cryptocurrency assets. […] Purchasing shares and indirectly profiting from the growth in the industry is definitely attractive. Since there is still no easy-to-purchase ETF or mutual fund for crypto, then crypto companies become a proxy cryptocurrency investment.”

Ben Caselin, head of research and strategy for digital asset exchange AAX, told Cointelegraph that Bakkt’s move does not necessarily reflect recognition from the wider financial industry. In contrast to the sentiments of Greenspan and Edgerton, Caselin also highlighted the fact that shareholders of Bakkt, when it is finally publicly traded, will be banking on the assumption that the exchange is successful in the future. While this is intrinsically tied into the cryptocurrency markets, Caselin draws a clear line between investing directly into cryptocurrencies and exchanges:

“It’s important to understand that investing in a cryptocurrency exchange is not a replacement for holding actual digital assets or trading futures. It is, in principle, a way to gain exposure to the wider industry, but more specifically, holding Coinbase or shares in Bakkt rests on the assumption that this particular exchange will fare well in the years to come.”

IPO’s and mega deals

The likes of Bakkt and Coinbase have seemingly gained a headstart in the race to access public funding and publicity as they look to build on their current offerings. Despite Bitcoin hitting new all-time highs on separate occasions in recent weeks, Edgerton believes that the space is still in its youth, and investment from the wider public will become a key driver of growth over the next decade: “IPOs are obviously a major source of funding, and a successful IPO should also encourage VCs to invest in the next major crypto unicorn.”

Related: Coinbase IPO to further legitimize crypto, but limitations remain

Greenspan also sees more billion-dollar deals on the horizon for the cryptocurrency space, while suggesting that some of these might just be done using the nascent technology powering the future of finance: “As the industry grows, there will be many more crypto-related mega-deals. Perhaps one day soon, all IPOs, acquisitions and mergers will happen using distributed ledger technology.”

Cointelegraph Consulting: Institutions keep the Bitcoin bull market on track

As the institutional investment narrative continues to play out, on-chain metrics show the continued accumulation of BTC in large addresses is still ongoing, with an increase of 9% during the previous 30 days alone. This was slightly offset by the decrease in addresses holding 10-100BTC, indicating that smaller “whales” were finding the chance to take profit too good to pass up.

The year started with a surging increase in volatility and trading volume, with BTC setting a new all-time high at $41,941 before plunging back below $32,000. In doing so, annualized volatility hit a high of 97%, a figure not seen since April of 2020.

The latest bi-weekly newsletter from Cointelegraph Consulting takes a look at how futures funding rates are impacting the market. With investors greedy to cash in on Bitcoin’s skyrocketing prices, funding rates hit new highs, exposing the market to high risk from over-leveraged positions.

Read the full newsletter edition here for more news and signals, complete with detailed charts and images.

Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. With market intelligence from one of the industry’s leading analytics providers, Santiment, the newsletter dives into the latest data on social media sentiment, on-chain metrics, and derivatives. 

We also review the industry’s most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.

Gamers are still Nvidia’s masters, but Ether miners could change that

Gaming hardware giant Nvidia has addressed the ongoing shortage of its new RTX 3000 product line after high demand from gamers, and to a lesser extent, cryptocurrency miners, pushed up prices and cut availability.

Nvidia chief financial officer Colette Kress said the company didn’t have good visibility into how much demand came solely from cryptocurrency miners, but she doesn’t believe it’s a big part of the business at this time.

That’s despite reports of some Ether (ETH) miners constructing rigs comprised of 78 of Nvidia’s Geforce RTX 3080 graphics cards, estimated to net their owner profits of $122,000 per year.

Kress did suggest that any future spikes in demand from miners could present a good opportunity to restart the company’s CMP product line. CMP refers to a range of Nvidia graphics cards created specifically for cryptocurrency mining, which ship without the display outputs unnecessary for the task in question.

Speaking at the 19th Annual J.P. Morgan Tech/Auto Forum Conference on Jan. 12 via Seeking Alpha, Kress told an audience of investors that should the firm observe any demand from would-be miners, they would consider manufacturing more mining-specific graphics cards.

“So, in summary, if crypto demand begins or if we see a meaningful amount, we can also use that opportunity to restart the CMP product line to address ongoing mining demand,” said Kress.

The chief financial officer believes the majority of demand still comes from a primarily gaming-focused user base, adding that gaming demand alone outpaced the company’s supply capacity.

Kress said cryptocurrency mining was one of the many unique applications resulting from the programmable nature of Nvidia’s cards, and one that had helped drive market growth in the past:

“Yes. So, cryptocurrency is interesting. So GPUs, as you know, have been programmable for many, many years, and it allows a constantly discovering capability for new applications to use the overall GPUs, and that has driven our overall growth in the market. Cryptocurrency mining is one of those such applications.”

According to Kress, Nvidia’s supply capacity would remain diminished until at least the start of Q2, and revenues are expected to remain flat until that time.

Sick of yield farming? Your liquidity could save Earth from the Daleks

The decentralized finance craze has provided endless opportunities for token holders to farm yield through staking their assets in a wide variety of liquidity pools.

But for those who yearn for something a little more tangible than yet another “worthless” token in return for locking up theirs, Reality Gaming Group has another option.

The Doctor Who: World’s Apart and Reality Clash developer is offering a liquidity boost and rewards program featuring NFTs from its portfolio of games.

The scheme has launched alongside an RCC/ETH liquidity pool on Uniswap and offers rewards to those who stake a minimum of $200 worth of RCC tokens into the pool.

The rewards comprise of three elements: a percentage of the Uniwap fees, a 100,000 RCC per month drop distributed between pool participants, and exclusive NFTs worth hundreds of dollars.

The amount of NFTs that stakers can receive depends on the amount of time that liquidity is deposited in the pool.

Rewards will be randomly chosen from across all four of the games in the RGG stable, and over a six-month period may comprise five Doctor Who: Worlds Apart trading cards, along with ten or more from the other three games. These would be worth over $200 if bought in-game.

This means users could become the proud owner of an exclusive TARDIS trading card, helping to defend the Earth from the incoming Dalek invasion — or get a Reality Clash gun — in return for staking tokens in a liquidity pool.

RGG hopes that the addition of NFT rewards will encourage more participants to join the pool, and provide deep liquidity to those wishing to trade RCC. Co-founder Tony Pearce told Cointelegraph:

“The yield is good and comparable on its own but the NFT’s are an additional bonus to the RCC yield farming element. We are guaranteeing NFTs across all our portfolio of games including Doctor Who and these NFT’s could be worth a lot of money to traders. Because we now have four different games all with different NFT’s we feel that this is a unique reward scheme offering something exciting, new and different for liquidity providers.”

Canada’s first public Bitcoin fund hits $1 billion

Canadian regulated digital asset manager 3iQ has recorded another massive milestone of its public Bitcoin (BTC) fund.

On Jan. 14, 3iQ’s Bitcoin Fund (QBTC) hit the $1 billion mark, the company announced on Twitter. The new milestone demonstrates QBTC’s parabolic growth after 3iQ launched the fund in April 2020. QBTC is now up 900% from its previous milestone of $100,000 recorded in October 2020.

As previously reported, 3iQ’s QBTC is Canada’s first public Bitcoin fund listed on a major stock exchange, the Toronto Stock Exchange. Cameron and Tyler Winklevoss’ Gemini provides custody services for 3iQ’s QBTC.

At publishing time, QBTC.U is trading at $48.63, up 330% from $11 when it was listed in April.

3iQ is apparently one of the largest cryptocurrency firms in Canada. In January 2018, 3iQ reportedly became the first crypto fund regulated by the Ontario Securities Commission and the Canadian Securities Administrators. In February 2020, 3iQ also partnered with blockchain startup Mavennet to launch a stablecoin pegged to the Canadian dollar that will be regulated by the Financial Transactions and Reports Analysis Centre of Canada.

3iQ’s former senior executive Shaun Cumby is now also the CEO of Arxnovum, a company that on Jan. 11 filed an application with OSC for a Bitcoin exchange-traded fund. Winklevoss’ Gemini will also provide its custody for the Arxnovum’s Bitcoin ETF.

Minerals giant Norilsk Nickel joins Responsible Sourcing Blockchain Network

“Mining” may be most frequently used in the crypto industry to refer to the process by which digital currencies are collectively generated — but there are contexts in which firms are adopting blockchain infrastructure to manage the most physical of mining supply chains.

The Russian company Norilsk Nickel — the world’s largest producer of palladium and high-grade nickel and a large producer of platinum and copper — has joined an initiative called the Responsible Sourcing Blockchain Network, according to an announcement published on Jan. 14.

The Responsible Sourcing Blockchain Network, or RSBN, is the outcome of an initiative by the global sourcing audit and advisory RCS Global Group. Aimed at improving the transparency, traceability and verification of sustainable practices in the minerals and metals industries, the RSBN network is built on the IBM Blockchain platform and is powered by Hyperledger Fabric

To join RSBN, companies must be assessed — at the outset, and then each year — according to the framework provided for by the Organization for Economic Cooperation and Development, or OECD. These requirements are outlined in “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.” 

RCS Global Group also audits participant companies according to sourcing standards laid out by an industry body known as the Responsible Minerals Initiative, or RMI. As an RSBN member, several of Nornickel’s supply chains will be audited across its operations from mines in the Russian Federation to refineries, both domestic and in Finland. The data from this audit will be tracked on the RSBN platform, providing a record of sustainable nickel and cobalt production and providing information regarding its maintenance and provenance. 

Nornickel’s participation in RSBN comes as part of the company’s wider digital technology strategy that intends to make its supply chain more “customer-centric.” This appears to refer both to providing more transparency and assurances about sustainable practices, and to create possibilities for Nornickel partners to trace commodity flows “in near real-time.” 

For this second goal, Nornickel is also adopting a platform called Atomyze that tokenizes physical assets. Similarly to RSBN, Atomyze uses Hyperledger, with IBM’s participation.

Prior to Nornickel, British-Swiss commodity trading and mining company Glencore joined RSBN in late 2019, shortly after the World Economic Forum launched its own “Mining and Metals Blockchain Initiative” to promote responsible sourcing and sustainability practices in the global industry.

Crypto anti-terrorism bill introduced in the US House of Representatives

U.S. Representative Ted Budd (R-NC) has sponsored a new piece of legislation aimed at creating an agency tasked with combating the use of cryptocurrencies in terrorist financing.

The bill — H.R. 296 — is co-sponsored by Reps. Warren Davidson (R-OH), Stephen Lynch (D-MA), Byron Donalds (R-FL), and Darren Soto (D-FL) and was introduced on Wednesday.

Apart from creating the task force, the bill also seeks to:

“Provide rewards for information leading to convictions related to terrorist use of digital currencies, to establish a Fintech Leadership in Innovation and Financial Intelligence Program to encourage the development of tools and programs to combat terrorist and illicit use of digital currencies, and for other purposes.”

Following the introduction, the bill was referred to the Committee on Financial Services and the Committee on the Budget for preliminary deliberations. Rep. Budd is a known supporter of crypto and blockchain in Congress.

In 2019, Rep. Budd championed the call for greater clarity in the country’s crypto tax laws. He also introduced a couple of bills to the house aimed at improving the regulatory standard of the industry in the U.S.

While Anti-Money Laundering and Combating the Financing of Terrorism continue to be a major anti-crypto talking point for several government agencies, cryptocurrency forensic data points to limited adoption of virtual currencies by terrorist organizations. Back in May 2020, blockchain intelligence outfit Chainalysis debunked claims that ISIS owned about $300 million in Bitcoin.

However, the U.S. Justice Department has reportedly seized crypto funds allegedly belonging to ISIS and Al-Qaeda terrorist networks. In June 2020, reports also emerged that ISIS-affiliated media platforms were collecting donations in Monero, a popular privacy coin.

Meanwhile, Chainalysis has published a report stating that some participants in the recent riot at the U.S. Capitol received large Bitcoin donations from a French computer programmer a month before the incident. According to the crypto forensics firm, the donor, now deceased, had a history of supporting causes that espoused far-right political and social ideologies.

U.S. law enforcement officials are reportedly investigating the possible links between the donations and the planning of the riot.