US Treasury’s Guidance on Crypto Staking Shines the Light for Hodlers

A recent reveal by the US Treasury is shining some light on their take on crypto staking, one of the most lucrative crypto sectors. On Friday, the Treasury said that the upcoming regulations would not touch investors who stake in cryptos. The authority revealed that the regulations would mostly target brokers rather than investors.

US Treasury Assures That Upcoming Crypto Rules Exclude Staking.

Crypto investors who use staking to earn passively from their holdings are now relieved after learning of the new regulations. On Friday, the Treasury leaked that the upcoming crypto regulations in the US will not encompass rules on staking. It further revealed that the rules would mostly dawn on third parties and brokers rather than individual investors. That is great news considering that the crypto market is still struggling to bounce back after a long dip. Staking has been an essential way of earning interests in cryptos for many investors since it has guaranteed positive returns. As a result, many usually stake their coins to earn passively as they hodl them. Therefore, the recent US Treasury reveal creates one of the best opportunities for US investors. According to data trackers, Messari and Staking Rewards investors staked over 70% of the tokens issued across multiple chains. Therefore, the incoming rules may strongly favor very many investors who stake their holdings.

Why the Us Regulations Will Be a Relief to Investors Who Stake Their Holdings

Staking has been increasing in popularity over the past few months. In Q4 of 2021, about 7.7% of all cryptocurrencies had been staked compared to 1.8% from 2020 in the same period. That increase is impressive considering that BTC, XRP, and various stablecoins on the Ether network do not allow for staking (70% of the market). The new reveal by the Treasury is very important to the American crypto market, given that ETH is moving to PoS soon. The timing of the news and the development of the second-largest cryptocurrency is perfect. The PoS mechanism will allow ETH to be staked more easily. According to Tim Ogilvie, CEO of Staked, the staked ETH might move up from 8% to 80% very soon. He predicted that the process to realize such an increase would probably take upto two years. Tim added that ETH staking is one of the best developments ever in the crypto space. According to Steve Ehrlich, Voyager Digital Ltd’s CEO, the demand for crypto taking increases with investors asking for multiple coins to allow Staking. Over the past six weeks, staking coins have gone up by about 20% based on volume. That increase in the volume of staking coins held by investors shows that a decision by the US not to tax Staking will be most welcome. It will allow many investors to enjoy earning passively from their holdings and cater to the taxes on other crypto sectors like trading. Therefore, it will be a relief for many crypto investors.