The administration of U.S. President Donald Trump is reportedly considering making all future gains earned on Bitcoin (BTC) and other cryptocurrencies tax-free.
Trump is apparently weighing a proposal that would make U.S.-based cryptocurrencies exempt from capital gains tax, while all non-U.S. based crypto would face a 30% tax. The elimination of capital gains taxes on U.S.-based cryptocurrencies would be a dream come true for many investors.
And granting crypto tax-free status could possibly be announced as soon as March 7, coming out of the highly anticipated “Crypto Summit” that’s taking place at the White House. Last week, Trump announced plans to create a strategic crypto reserve, news that sent crypto prices temporarily higher.
Risky Move
Investor hopes are running high that new measures to strengthen digital coins and tokens and boost prices will come out of the Crypto Summit. However, some analysts are raising concerns about potentially exempting crypto from capital gains taxes.
Skeptics warn that making such a change before regulations are firmly in place could lead to more market volatility for cryptocurrencies. Investors could dump non-U.S. crypto and aggressively rotate into American investment vehicles. There could also be a surge in the creation of new cryptocurrencies within the U.S.
For these reasons, some analysts are urging that the Trump administration take a measured approach to any changes related to taxes on crypto. Bitcoin has risen to $88,500 ahead of the Crypto Summit.
Is BTC a Buy?
Most Wall Street firms don’t offer ratings or price targets on Bitcoin, so we’ll look at the cryptocurrency’s three-month performance instead. As one can see in the chart below, the price of BTC has declined 10% in the last 12 weeks.
