In one fell swoop the IRS just took the wind out of Bitcoin’ sails. From the taxman’s perspective this is a clever move. It matters not what use the owner of a BTC has in mind, the IRS still gets its rather large cut (43.4% of the gain if sold within a year, up to 23.8% if held for more than that). It’s also analogous to a central bank setting a very high prime interest rate in order to lock up some of the cash supply and curb inflation (if there is less money in circulation prices tend to stabilise since customers prefer to earn interest on savings rather than move up the price elasticity curve).
This situation would affect US citizens and residents – those from whom the IRS is entitled to collect taxes. The rest of the world can still freely trade BTC, but probably a great deal of market solvency will disappear. BTC will probably go up in value in the relative short term since it is now more scarce as US holders view it as an asset and not a currency, and will want to sit on it to a) realise capital gains, and b) not pay short-term capital gains tax. Longer term the cryptocurrency will probably plateau as there is less incentive for US buyers to accumulate more BTC.
How does this change how startups will approach BTC? For any company who saw the opportunity to build an open exchange platform (i.e. to be used in daily trade and barter), they’re probably smarting about now (again, regarding the US market). The way I see around this is to switch to a ledger-based system with constant reconciliation (which the blockchain partially accomplishes), where transactions deal only with BTC credits and debits, and not conversion to a currency which is legal tender.