Executive Summary
Bitcoin is surging toward the $5,000 mark on September 7, 2017, shrugging off a recent $1,000 pullback with remarkable resilience. Trading at approximately $4,638 on major exchanges, the world’s largest cryptocurrency by market capitalization shows no signs of slowing down. Meanwhile, in Washington, a bipartisan group of lawmakers has introduced the CryptoCurrency Tax Fairness Act, a landmark bill that could fundamentally reshape how digital currency transactions are taxed in the United States.
The Numbers Unpacked
Bitcoin’s price trajectory in 2017 has been nothing short of extraordinary. Starting the year at roughly $1,000, BTC has rocketed nearly 400% in nine months. The rally past $4,000 in August caught many analysts off guard, and the push toward $5,000 is happening faster than most market watchers anticipated.
On Kraken, one of the largest cryptocurrency exchanges, daily trading volumes across all markets topped $142 million on September 7. Bitcoin accounted for $43.2 million of that volume, while Ethereum led with $46.6 million. Bitcoin Cash, the cryptocurrency created from the August 1 hard fork, traded at $664.98 with $19.7 million in volume—a 1.56% gain on the day.
The total cryptocurrency market capitalization stands at approximately $160 billion, with Bitcoin commanding a dominant share of roughly $68 billion according to CoinMarketCap data from September 10, 2017.
Historical Context
The current rally is occurring against a backdrop of significant global developments. China’s recent ban on initial coin offerings (ICOs) sent shockwaves through the market in early September, triggering a sharp but brief selloff. Bitcoin dropped by as much as $1,000 in a single session—but the recovery has been swift and decisive, suggesting that the market has absorbed the news without lasting damage.
This resilience is a departure from previous years, when regulatory announcements from China routinely triggered prolonged bear markets. The fact that Bitcoin has bounced back so quickly underscores the maturation of the cryptocurrency market and the diversification of its participant base beyond any single jurisdiction.
Ethereum, meanwhile, has faced its own challenges. The ETH price has slid to approximately $337 on Kraken, down 0.70% on the day, as the ICO ban in China directly impacts the primary use case for the Ethereum blockchain as a token issuance platform.
Expert Consensus
The proposed CryptoCurrency Tax Fairness Act, introduced by Representative Jared Polis (D-CO) and Representative David Schweikert (R-AZ), would create a de minimis exemption for cryptocurrency transactions under $600. This addresses one of the most significant practical barriers to using Bitcoin and other digital currencies as everyday payment instruments.
Under current IRS guidance, every cryptocurrency transaction—from buying a cup of coffee to purchasing a laptop—is potentially a taxable event requiring the calculation of capital gains or losses. This creates an absurd compliance burden that effectively discourages the use of digital currencies for their intended purpose: spending.
Jerry Brito, Executive Director of Coin Center, the advocacy group that helped draft the legislation, emphasized its bipartisan appeal. The bill aligns with the broader Republican priority of tax reform while addressing a genuine consumer protection concern that resonates across party lines.
The legislation also emerges amid a protracted legal battle between the IRS and Coinbase, the largest US-based cryptocurrency exchange. The IRS claims that only 802 people declared Bitcoin-related gains or losses on their 2015 tax returns—a statistic that underscores the confusion and non-compliance surrounding cryptocurrency taxation. Coinbase customers have pushed back against what they characterize as overly broad IRS data demands, with senior Republicans in Congress echoing those concerns.
Forward Outlook
Bitcoin’s march toward $5,000 appears driven by a confluence of factors: growing institutional interest, increasing mainstream media coverage, the successful activation of Segregated Witness (SegWit), and a general sense that cryptocurrency is transitioning from a niche experiment to a legitimate asset class.
The CryptoCurrency Tax Fairness Act, if passed, would remove a significant friction point for consumer adoption. However, the bill currently lacks a Senate companion, and its path through a crowded Congressional agenda remains uncertain. The most viable route may be attachment to the broader tax reform package that Congressional leaders have identified as a top priority.
For traders and investors, the key question is whether Bitcoin can sustain its momentum above the psychologically important $5,000 level. The market structure suggests strong buying support, but the rapid pace of the rally increases the probability of a correction. As always in cryptocurrency markets, volatility remains the only constant.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments carry significant risk, including the potential loss of principal. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.
400% in 9 months and people were still calling it a bubble at $1k lol
to be fair it WAS a bubble, just one that kept going for months after. calling tops is how people miss 80% of the move
400% and still early lol. the people who got in at $1k were considered degens. now they are legends
that $142M daily volume on Kraken alone was insane for 2017
kraken was struggling to stay online half the time too
kraken really was the only reliable exchange back then. coinbase had insane spreads and bittrex was delisting coins weekly
the crypto tax fairness act was huge for adoption. before that every single transaction was a taxable event, even buying coffee with BTC
that bill died in committee and didn’t pass until years later. the $600 reporting threshold that eventually made it into law was way worse than what they originally proposed