On Nov. 15, President Joe Biden signed a $1.2 trillion bipartisan infrastructure package, which includes some new crypto laws that investors should be aware of.

Brokers, or bitcoin exchanges, will be required to issue a 1099-B under the new rule. In other words, crypto exchanges will now be compelled to report crypto transactions to the IRS immediately. "For many crypto investors, the bill will signal the end of concealing many gains," says Grant Maddox, an independent CFP based in South Carolina.

Many crypto investors will face tax reporting issues as a result, according to Maddox. Because the exchanges reporting on trading activity will have a limited perspective into what these investors paid for crypto in the first place, the information reported to the IRS on the 1099 form for investors who use their own crypto wallet may be prone to inaccuracies.

Is there anything investors should do in response to the new law?

There are two major points to remember for crypto investors who want to stay on the right side of the new regulation governing their investments:

• Keep as precise a record of your cost basis — the price you paid for your cryptocurrency when you bought it — so you can compare it to what the exchanges will report to the IRS.
• Finding a tax expert that is familiar with crypto might be even more beneficial in appropriately reporting your crypto assets. Be as open as possible about what cryptocurrencies you own and how much you spent on them.

Although the IRS previously recognized bitcoin to be taxable property, the new legislation's specific reporting requirements raise the stakes for investors to ensure they are correctly and thoroughly reporting their activities.

"I believe a lot of people are in for a tax shock," Maddox adds. "This information will be tracked by the IRS, and there will be no evading the tax ramifications and gains immediately."

How much will the New Legislation impact for Bitcoin and Ethereum prices?

Bitcoin and Ethereum prices plummeted in the hours after Biden signed the new infrastructure package into law after both had just achieved numerous new all-time highs. Overnight, Bitcoin fell below $59,000, and Ethereum fell below $4,200. By Wednesday, both had mildly risen back up.

Cryptocurrency is famously volatile, with daily and even hourly price changes of hundreds of percent. While experts advise investors to stick to the more established Bitcoin and Ethereum, even these two largest cryptocurrencies experience significant ups and downs.

Because cryptocurrency is such a new asset class, analysts say it may be influenced by everything from a celebrity tweeting about a particular cryptocurrency to new government rules that affect it as an investment class.