The US Internal Revenue Service has said it needs more powers from Congress to regulate the cryptocurrency industry. Photo: Getty Images

Cryptocurrencies were broadly higher on Wednesday morning, slowly trying to offset losses from the recent sell-off as their volatile start to the month continues.

Bitcoin (BTC-USD) rose nearly 5% and was trading at $ 34,398 (£ 24,272), approaching $ 40,000 but still far from its all-time high of $ 63,000. Ethereum (ETH-USD) was up 0.1% to trade at $ 2,521, and the Dogecoin for jokes was up 0.5% to trade at $ 0.33.

“There seems to be a significant amount of uncertainty in the game. Beyond the mere price, the demand for transactions and billing has decreased significantly. Almost all on-chain activity metrics point to a sharp drop from the all-time highs earlier in the year, ”said Simon Peters, an analyst at multi-asset investment platform eToro.

Bitcoin made up some of its losses on Wednesday morning. Chart: Yahoo Finance Germany

Part of the uncertainty could be due to US investigators getting back about $ 2.3 million in bitcoins paid as ransom to a hacking group called DarkSide. The group was involved in a ransomware attack on the Colonial Pipeline, the largest pipeline system for refined oil products in the United States.

“We have a high demand for cash in our country, but we have not found out in the country or in the world how to track cryptocurrencies,” CNBC Senator Roy Blunt quoted as saying.

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“You can’t trace the ransomware – ransom payment of choice now. And we have to do a better job here, ”he added.

Meanwhile, the U.S. Internal Revenue Service has stated that it needs more powers from Congress to regulate the cryptocurrency industry and collect information on transfers worth over $ 10,000, the majority of which is not reported.

“We are challenged frequently, and it is vital that Congress have a clear dictation of our authority to collect this information,” said Commissioner Charles Rettig during a hearing of the Senate Finance Committee, adding that “the most virtual cryptocurrencies are designed by nature “. stay away from the radar screen. “

The Biden government’s revenue proposals for fiscal year 2022 include a requirement that cryptocurrency transfers of $ 10,000 or more be reported to the IRS in the same way that banks report cash transfers. The planned change is scheduled to begin in 2023.

The story goes on

Earlier this week, cryptocurrencies collapsed after former US President Donald Trump said Bitcoin was a “scam”.

And the weekend had been tumultuous after Chinese social media site Weibo suspended “key opinion leaders,” rekindling fears of further action in the country.

Watch: What is Bitcoin?