Pro-Crypto House Lawmakers Are Fighting Digital Currency Clause in Infrastructure Bill

As the heavily debated infrastructure bill makes its way through Congress, proponents of cryptocurrencies are speaking up in the U.S. House of Representatives in an effort to combat controversial crypto legislation.

The unmodified bill imposes requirements on crypto exchanges and other entities to report transactions to the Internal Revenue Service (IRS) for tax-reporting purposes, which are structured similarly to the guidelines placed on traditional financial brokers.



Crypto-friendly congressmen and industry proponents argue that the new regulations set on these crypto entities would severely stunt technological innovation within the US. They also say it would present unreasonable requirements for validators, cryptocurrency miners and digital wallet developers that don’t know who their buyers and sellers are.

House Democrats from California, including Representatives Ro Khanna, Eric Swalwell and Anna Eshoo are locking arms with Representatives Bill Foster (D-IL) and Darren Soto (D-FL) to support revisions to the crypto amendments.

In an interview with Politico, representative Soto says he is confident that House members are becoming more supportive of the bill’s revision.

“Members are starting to pay attention. There is growing bipartisan support to make sure this language is right.”

The Biden administration is reportedly gearing up to follow through with the original bill, as officials believe it gives them more flexibility to monitor the crypto industry.

Eshoo urged House Speaker Nancy Pelosi to address the “unworkable regulations” set forth in the original bill. An unnamed House leadership aide said that Pelosi plans on reviewing the bill’s language surrounding crypto.

Soto says that pro-crypto congressmen will try to use “every avenue” to rework the tax rules, whether through the Democrats’ $3.5-trillion budget package or through standalone legislation.

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Swiss Fintech Firm Leonteq Expands Cryptocurrency Services to Germany and Austria

The Switzerland-based financial institution – Leonteq AG – announced it partnered with ICF BANK AG to introduce digital asset offerings to institutional investors as well as private clients in Germany and Austria. The initiative would grant investors exposure to 18 cryptocurrencies, including the leading ones, Bitcoin (BTC) and Ethereum (ETH).

Leonteq Stretches out of Switzerland

Leonteq AG – a Swiss firm specializing in structured financial products – announced it would allow investors in Germany and Austria to operate with 18 cryptocurrencies. These include Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Cardano, and more.

The fintech company further revealed that its partner is the Frankfurt-based institution – ICF BANK AG. Björn Geidel – Head of Crypto Offering at Leonteq – noted that the Swiss organization now covers nearly 76% of the total market capitalization of the asset class in the German and Austrian areas.

“We are proud to offer our clients such a broad underlying universe and unique investment opportunities in various themes within the crypto space such as decentralized finance, storage or blockchain technologies in a securitized format” – he added.

Björn Geidel
Björn Geidel, Source: Börse Social

In his turn, Sascha Rinno – a member of the ICF BANK’S Management Board – noted that the investors in the DACH region (Austria, Germany, and Switzerland) have been showing a growing appetite for digital assets operations. He asserted that the collaboration with Leonteq would be beneficial to those willing to join the crypto market:

“Through this cooperation with Leonteq, we are meeting the interest of both institutional investors as well as private investors in crypto assets. Leonteq is an established issuer that stands for excellence and quality in the field of structured certificates and crypto assets, and we are pleased to be working with them.”

Leonteq is a major fintech company headquartered in Zurich. It provides structured financial products as well as insurance products. The firm serves more than 50 markets and has reported over $140 billion in assets under management.


Swiss Banks Focus on Crypto

The cryptocurrency environment in Switzerland appears to be suitable for the local banks as some of them recently announced intentions to launch such services.

For example, back in May, the multinational investment bank – UBS Group – considered enabling its wealthy customers to digital asset investments later in 2021. However, the financial institution warned about the infamous volatility of the cryptocurrency sector and would allow clients to allocate a “very small portion” of their total wealth.

As CryptoPotato reported a month ago, Sygnum Bank – another Swiss-based financial institution – revealed it would become the first bank to provide Ethereum 2.0 staking. The company explained that staking services are entirely integrated into its platform, highlighting increased security.


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Bullish Ethereum traders can place risk-averse bets with this options strategy

Being bullish on Ether (ETH) has paid off recently because the token gained 60% in the last 30 days. The spectacular growth of decentralized finance (DeFi) applications likely fueled inflow from institutional investors, and the recent London hard fork implemented a fee burn mechanism that drastically reduced the daily net issuance.

Although Ether is not yet a fully deflationary asset, the upgrade paved the way for Eth2, and the network is expected to abandon traditional mining and enter the proof-of-stake consensus soon. Ether will then be slightly deflationary as long as fees remain above a certain threshold and the level of network staking.

In light of the recent rally, there are still daily calls for Ether to rally above $5,000, but surely even the most bullish investors know that a 90% rally from the current $3,300 level seems unlikely before year-end.

It would seem more prudent to have a safety net if the cryptocurrency market reacts negatively to the potential regulation coming from the United States Representative Don Beyer of Virginia.

Despite being in its early stages, the “The Digital Asset Market Structure and Investor Protection Act of 2021” proposal seeks to formalize regulatory requirements for all digital assets and digital asset securities under the Bank Secrecy Act, classifying both as “monetary instruments.”

Reduce your losses by limiting the upside

Considering the persistent regulatory risks that exist for crypto assets, finding a strategy that maximizes gains up to $5,000 by year-end while also simultaneously limiting losses below $2,500 seems like a prudent and well-aligned decision that would prepare investors for both scenarios.

There’s no better way to do this than using the “Iron Condor” options strategy that has been slightly skewed for a bullish outcome.

Ether options Iron condor skewed strategy returns. Source: Deribit Position Builder

The call option gives the buyer the right to acquire an asset at a fixed price in the future. For this privilege, the buyer pays an upfront fee known as a premium. Selling a call option, on the other hand, creates a negative exposure to the asset price.

The put option provides its buyer the privilege to sell an asset at a fixed price in the future, a downside protection strategy. Meanwhile, selling this instrument offers exposure to the price upside.

The iron condor basically sells both the call and put options at the same expiry price and date. The above example has been set using the ETH December 31 options at Deribit.

The max profit is 2.5x larger than the potential loss

The buyer would initiate the trade by simultaneously shorting (selling) 0.50 contracts of the $3,520 call and put options. Then, the buyer needs to repeat the procedure for the $4,000 options. To protect from extreme price movements, a protective put at $2,560 has been used. Consequently, 1.47 contracts will be necessary depending on the price paid for the remaining contracts.

Lastly, just in case Ether’s price rips above $7,000, the buyer will need to acquire 0.53 call option contracts to limit the strategy’s potential loss.

Although the number of contracts on the above example aims for a maximum ETH 0.295 gain and a potential ETH 0.11 loss, most derivatives exchanges accept orders as low as 0.10 contracts.

This strategy yields a net gain if Ether trades between $2,774, which is 10.5% below the current $3,100 price, and $5,830 on December 31.

By using the skewed version of the iron condor, an investor can profit as long as the Ether price increase is lower than 88% by year-end.

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