Bitcoin rallies past $117,000 as the US government shuts down
Meanwhile, Strategy is surging following the IRS issuing interim guidance that would remove the 15% Corporate Alternative Minimum Tax for unrealized gains on bitcoin holdings.
The US government may be shut down, but bitcoin is up. The asset is up 3.4% in the past 24 hours and has shot past $117,000, levels not seen since mid-September. The price action has also pushed bitcoin dominance to 59% from 57%, according to Glassnode.
Lee Bratcher, president and cofounder of the Texas Blockchain Council, told Sherwood News, “It’s a safe haven asset for investors to turn to during times of macro uncertainty, just as we saw with the 2008 recession and in similar times.”
He added that how the price will move from here is uncertain. “In the short term, we may see BTC go down with investors in panic, but in the medium term, there’s going to be improved liquidity and greater support of risk assets,” Bratcher said.
Prior to the shutdown, the Treasury Department and the IRS issued interim guidance on Tuesday to remove the 15% Corporate Alternative Minimum Tax (CAMT) for unrealized gains on bitcoin holdings, sending shares of the two largest corporate bitcoin holders, Strategy and MARA Holdings, up in early trading.
To put this in context, Strategy holds $26 billion in unrealized gains, per The Wall Street Journal, and the regulatory move now “removes a significant source of potential overhang for Strategy,” TD Cowen analyst Lance Vitanza said in a note.
MARA’s vice president of investor relations, Robert Samuels, celebrated the news, saying it “is a significant win for MARA and our stockholders.”
Tim Kotzman, founder of Bitcoin Treasuries Media, said that for Strategy, the guidance eliminates the risk of being taxed on paper gains, which could have materially pressured its cash flows. “Strategically, this strengthens their position to continue expanding their bitcoin treasury strategy without incremental tax burdens,” he said.
Meanwhile, Metaplanet jumped up the corporate bitcoin treasury ladder with its latest acquisition of 5,268 bitcoin, which makes the Japanese company the fourth-largest corporate bitcoin holder, with 30,823 bitcoin.
