In January, reports surfaced suggesting that after Donald Trump’s inauguration, his son, Eric Trump, confirmed that U.S.-based cryptocurrencies might be exempt from capital gains tax, while non-U.S. cryptocurrencies could face a 30% tax.
The idea of eliminating capital gains taxes on U.S.-based cryptocurrencies seems appealing for American investors, but it could have significant repercussions. The real impact on the global crypto market remains uncertain.
Key Concerns
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Market Turbulence: If the proposed rule is enacted, market volatility might occur as U.S. investors may shift their focus from non-U.S. cryptos to domestic alternatives, thereby increasing the pressure on international projects.
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Premature Policy Changes: Removing taxes before setting solid regulations could lead to a new wave of cryptocurrency launches, reminiscent of the 2017 ICO boom, where many projects collapsed or turned out fraudulent.
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Impact on Global Crypto: While the U.S. hosts significant crypto projects, it has also become a hotbed for scams. Increased favoritism towards local projects might limit investments in emerging markets and drive startups to seek funding elsewhere.
In conclusion, while the zero capital gains tax proposal is marketed as a benefit, it poses risks that could skew the cryptocurrency landscape and make it less competitive worldwide, ultimately harming investors in the long run.
