Trump’s rumored plan to eliminate capital gains tax on U.S.-based cryptocurrencies might sound like a win for investors, but experts warn it could destabilize global crypto markets.
Trump’s Plan Could Happen Immediately
If Trump’s administration follows through on the reported tax exemption, U.S. investors could dump non-U.S. cryptos to rotate into tax-free domestic options. This shift could increase sell pressure on global projects, particularly those heavily reliant on U.S. investors. As cited by CoinDesk, analysts warn that this sudden change could trigger price volatility across the board.
A Flood of New Coins Could Cause Scams
Zero capital gains tax might fuel a crypto gold rush in the U.S., much like the 2017 ICO boom, which saw nearly 80% of projects collapse or turn into scams. If the tax break arrives before clear regulations, bad actors could take advantage of inexperienced investors, damaging crypto’s reputation. The FBI has already warned about fake tokens preying on unsuspecting buyers.
Could This Hurt the Global Crypto Industry?
With U.S. venture capital firms favoring local tokens to maximize tax-free gains, global projects may struggle to secure funding. Countries like the UAE have tax-free crypto policies, but they apply them universally—unlike Trump’s proposed U.S.-only plan. According to CoinDesk, this could fragment liquidity, reduce competition, and isolate American investors from the broader crypto economy. It’s also important to note that while tax relief may sound attractive, it risks fueling scams, weakening global markets, and stifling innovation.
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