According to the Internal Revenue Service (IRS), Bitcoin is actually considered a tax asset. 3

This has had a mixed effect on Bitcoin's volatility. On the positive side, any statement confirming the currency will have a positive impact on the currency’s market valuation;

On the contrary, it is called property by the IRS, which has at least two negative effects. The first negative impact is the increase in complexity for users who want to use it as a form of payment. According to the new tax law, users must record the market value in every transaction, no matter how small the amount, the need for record keeping will reduce the speed of adoption, which is understandable, because for many users, it seems too troublesome NS;

Second, the decision to call currency a form of property for tax purposes may send a signal to some market participants that the IRS is preparing to implement stronger supervision later. Very strong supervision of currencies may cause the adoption rate of currencies to slow to the point where mass adoption cannot be achieved, which is critical to the overall utility of Bitcoin in society. The recent moves by the US Internal Revenue Service are not clear about its signal motives, so the signal to the Bitcoin market is mixed.

According to the Internal Revenue Service (IRS), Bitcoin is actually considered a tax asset. 3

This has had a mixed effect on Bitcoin's volatility. On the positive side, any statement confirming the currency will have a positive impact on the currency’s market valuation;

On the contrary, it is called property by the IRS, which has at least two negative effects. The first negative impact is the increase in complexity for users who want to use it as a form of payment. According to the new tax law, users must record the market value in every transaction, no matter how small the amount, the need for record keeping will reduce the speed of adoption, which is understandable, because for many users, it seems too troublesome NS;

Second, the decision to call currency a form of property for tax purposes may send a signal to some market participants that the IRS is preparing to implement stronger supervision later. Very strong supervision of currencies may cause the adoption rate of currencies to slow to the point where mass adoption cannot be achieved, which is critical to the overall utility of Bitcoin in society. The recent moves by the US Internal Revenue Service are not clear about its signal motives, so the signal to the Bitcoin market is mixed.