Today in crypto, a slated Bitcoin software update has divided the blockchain’s community, a US House Committee approved a crypto market structure bill, and the Bank of Japan’s June meeting could trigger a Bitcoin rally if it restarts quantitative easing.
Bitcoin update to raise data limit on OP_RETURN function
An upcoming Bitcoin software update will increase the data limit on a divisive function that will allow significantly more images, text and documents to be stored on the Bitcoin blockchain, Bitcoin Core developer Gloria Zhao said on Monday.
The Bitcoin Core 30 update, slated for Oct. 30, will remove the 80-byte limit on the OP_RETURN function and allow each output to carry up to 4 megabytes of data. The function enabled the Ordinals craze last year, allowing Bitcoin users to post non-fungible token-like collections on Bitcoin.
The slated change infuriated the conservative sect of the Bitcoin community, who argue that non-financial data clogs the blockchain with spam, while others, including the proposal‘s lead author Peter Todd, believe increasing the data limit will expand Bitcoin’s use cases beyond finance.
In a statement on GitHub, Zhao said the Bitcoin Core devs favored a more hands-off approach, allowing users to utilize the chain however they choose and that preventing “certain transactions from being mined reflects a misunderstanding of the relationship between open source software users and developers.”
House Agriculture Committee advances crypto market structure bill
Lawmakers on the US House Agriculture Committee voted in favor of the Digital Asset Market Clarity, or CLARITY, Act, advancing the bill further in Congress.
In a 47-6 vote on Tuesday, an overwhelming majority of lawmakers on the committee approved the CLARITY Act to establish a regulatory framework for digital assets. Committee Chair GT Thompson said the bill would be sent to the House for consideration, adding that any members offering opposing views would have the opportunity to submit them by Friday.
The vote came alongside debate on the House Financial Services Committee discussing an amendment that could add protections for blockchain developers to the CLARITY Act. At the time of publication, the committee had not voted on the bill.
According to its sponsors and co-sponsors, the CLARITY Act is intended to establish clear rules under which digital asset companies can operate in the United States, by also clarifying whether certain investment vehicles fall under the purview of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). Consideration of the bill, first introduced in May, comes as the Senate is expected to vote on the GENIUS Act — legislation to regulate payment stablecoins.
Bank of Japan pivot to QE may fuel Bitcoin rally — Arthur Hayes
The Bank of Japan’s (BOJ) upcoming monetary policy meeting in June may provide the next significant catalyst for global risk assets like stocks and cryptocurrencies.
The BoJ is set to take its next interest rate decision at its upcoming monetary policy meeting on June 16–17.
The central bank may provide the next significant catalyst for Bitcoin and other risk assets if it pivots to quantitative easing (QE), according to Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom.
“If the BOJ delays QT, and restarts selected QE at its June meeting risk assets are going to fly,” Hayes wrote in a June 10 X post.
QE refers to central banks buying bonds and pumping money into the economy to lower interest rates and encourage spending during difficult financial conditions.
On July 31, 2024, the Bank of Japan introduced a plan to cut government bond purchases by 400 billion yen per quarter, starting in August 2024. The quantitative tightening plan is set for an interim assessment period at the upcoming meeting on June 16, signaling a potential opportunity to pivot.
