Bitcoin rallies, hits highest level since mid-May

The market's reacting in part to news from the Senate's bipartisan infrastructure negotiations, which touch on crypto regulation and bitcoin, Kate Rooney says. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

The price of bitcoin broke past $46,000 on Monday morning after a high stakes weekend for the crypto industry as the Senate continued debating the details of its part in the still yet-to-be-passed infrastructure bill.

Bitcoin traded as high as $46,465. That marks its highest level since May 16, when it hit $49,770.33, according to Coin Metrics. It traded at $46,239.88 at 4:05 p.m. The price of ether also broke through $3,000 over the weekend for the first time since May and continued to hover above it at $3,100 Monday.

On Sunday night, the Senate further delayed the vote on the infrastructure bill to Tuesday to allow for more time to debate two competing amendments to a cryptocurrency tax provision, which was initially included in the bill as a pay-for to help the government raise some $28 billion for the infrastructure spending. It’s likely that’s increasing optimism among traders that cooler heads prevail, said D.A. Davidson’s Chris Brendler.

The senators behind the competing amendments offered a compromise amendment late Monday morning crafted with the Treasury Department, Sen. Pat Toomey, R-Pa., said in a press conference Monday.

The bitcoin community made more than 35,000 calls to lawmakers and beefed up its lobbying efforts in the past week. Amid the weekend debate some lawmakers including Sens. Ron Wyden, D-Ore., and Ted Cruz, R-Texas, have emerged as defenders of the cryptocurrency industry — rallying their social media followers to call their senators and urge them to take a do-no-harm approach to the infrastructure bill’s crypto tax provision — joining crypto advocates Sen. Cynthia Lummis, R-Wyo. and Toomey.

The markets are probably, at least in part, reacting to the fact that crypto’s getting serious consideration and has a growing number of allies on Capitol Hill, Sam Bankman-Fried, CEO of cryptocurrency exchange FTX said on CNBC’s “Squawk on the Street” Monday.

“There has been a surprisingly large pro-crypto stance taken in the course of this,” he said. “It’s one of these things where, even if it loses in this particular amendment, a lot of senators have ended up taking crypto stances that never said anything before publicly. It’s showing there’s a much bigger presence in Washington of cryptocurrency interest than people expected going into that.”

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