Starting in 2024, new rules from a law signed by President Biden require reporting for digital asset transactions over $10,000 to the IRS. This law, part of the infrastructure bill passed in 2021, makes crypto brokers share details like the sender's name, address, and social security number within 15 days of a transaction. The goal is to close the tax gap in the U.S., but some find it confusing. For example, if you mine or exchange crypto and get over $10,000, its unclear whose information you report. Critics argue these rules lack clarity, and there are suggestions, like setting a minimum limit for reporting, to make things simpler.
Coin Center's Jerry Brito highlighted the challenge users might face in following these rules. He questioned how miners or validators, who receive rewards exceeding $10,000, would report personal information. Additionally, in on-chain decentralized crypto exchanges, it's unclear who you should report. Brito also raised concerns about anonymous donations made in Bitcoin or Ether, wondering who the sender could be. While there have been proposals, like a de minimis exemption, to address these concerns, the complexity of these rules might make reporting a challenge for many in 2024.
The Chicago Board Options Exchange (CBOE) anticipates that the approval of spot Bitcoin exchange-traded funds (ETFs) will draw a new wave of interest from institutional investors. CBOE Digital President John Palmer, in a recent interview, highlighted the potential for pension funds and investment advisory firms, currently unable to directly access Bitcoin, to invest in spot Bitcoin ETFs. As the U.S. Securities and Exchange Commission (SEC) nears a decision on the ARK Invest 21 Shares Bitcoin ETF application by January 10, Palmer foresees increased institutional and retail interest in Bitcoin derivatives if the ETF is approved, suggesting a broader adoption of hedging tools by institutional players.
CBOE Digital, the crypto-focused division of the exchange, is gearing up for potential ETF approval by planning to launch margined Bitcoin and Ether derivatives trading on January 11. This move aims to facilitate investors' trading contracts without requiring the full collateral. Simultaneously, mutual funds, such as Advisors Preferred Trust, are adjusting their strategies to gain exposure to spot Bitcoin ETFs, reflecting a growing trend among traditional financial entities to incorporate Bitcoin into their investment portfolios.
MicroStrategy's executive chairman, Michael Saylor, has initiated the process of selling $216 million worth of his shares in the company over a four-month period. The move is in line with Saylor's earlier statement that part of the proceeds would be used to purchase more Bitcoin. In a filing with the United States Securities and Exchange Commission on January 2, Saylor revealed that he began the sell-off by disposing of 5,000 shares, part of his 315,000 stock options awarded in April 2014, which are set to expire on April 30, 2024. During MicroStrategy's third-quarter earnings call on November 2, Saylor announced his plan to sell 5,000 MSTR shares daily for the next four months to fulfil personal obligations and increase his personal Bitcoin holdings.
Despite these sales, Saylor emphasized that his equity stake in the company remains "significant." The executive aims to use the proceeds to address personal obligations and acquire more Bitcoin. MicroStrategy, known for its substantial Bitcoin holdings, made a significant purchase of 14,620 Bitcoin for $615 million on December 27, bringing its total Bitcoin holdings to an impressive 189,150 Bitcoins, valued at approximately $8.5 billion at current market prices. Over the past year, MicroStrategy has outperformed Bitcoin, registering a 411% gain compared to Bitcoin's 170% rally during the same period.
