{"id":15525,"date":"2025-02-28T14:47:35","date_gmt":"2025-02-28T14:47:35","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=15525"},"modified":"2025-02-28T14:47:35","modified_gmt":"2025-02-28T14:47:35","slug":"why-trumps-potential-plan-to-make-crypto-gains-tax-free-could-be-a-bad-idea","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=15525","title":{"rendered":"Why Trump\u2019s Potential Plan to Make Crypto Gains Tax-Free Could Be a Bad Idea"},"content":{"rendered":"
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In January, following Donald Trump’s inauguration, reports<\/a> emerged claiming that his son, Eric Trump, had confirmed that U.S.-based cryptocurrencies would eventually be exempt from capital gains tax, while non-U.S. based cryptocurrencies would face a 30% tax.<\/p>\n

The elimination of capital gains taxes on U.S.-based cryptocurrencies might sound like a dream come true for American investors, but it won’t come without a price. Whether it turns into a net negative for the global crypto industry \u2014 well, we’ll just have to wait and see.<\/p>\n

But there are some glaring red flags.<\/p>\n

1. Markets may wobble after confirmation.<\/h4>\n

If this new rule actually gets approved and takes effect, be prepared for market turbulence as U.S. investors could dump non-U.S. cryptos, take the tax hit<\/a> and rotate some of their capital into domestic options. This could increase sell pressure on global projects, particularly those with significant U.S. investor exposure.<\/p>\n

But that would be the least of the concerns \u2014 this could have far-reaching, long-term consequences for the entire crypto industry.<\/p>\n

2. Making this change before sound regulations are in place could be harmful.<\/h4>\n

This elimination of taxes on crypto investments could trigger a surge in the creation of new cryptocurrencies from the U.S., similar to the 2017 Initial Coin Offering (ICO) boom \u2014 in which nearly 80% of projects<\/a> had collapsed or turned out to be scams within two years. If the U.S. government removes capital gains tax<\/a> before implementing clear and solid regulations, we could see a repeat of that chaos, but on a much larger scale.<\/p>\n

A zero capital gains tax would almost certainly lure in U.S. retail investors who\u2019ve never dabbled in crypto, drawn by the obvious tax advantage. But if bad actors flood the space and take advantage of them<\/a>, it could drive these newcomers away from crypto entirely.<\/p>\n

3. Potential harm to the global crypto industry.<\/h4>\n

The U.S. may be home to major crypto projects like Cardano (ADA), Solana (SOL), XRP (XRP) and Hedera (HBAR), but it\u2019s also been a breeding ground for scam tokens. In 2024, the FBI even issued a warning<\/a> about criminals creating fake crypto tokens that mimicked legitimate ones, preying on unsuspecting investors.<\/p>\n

In addition, global crypto startups may have a more challenging time securing funding if U.S. venture firms start favoring local projects to maximize tax-free returns on token allocations. This could drain investment from emerging markets, where crypto is often used for real-world financial inclusion. Such a change would also likely bring back many U.S. firms back home after they left because of the SEC\u2019s enforcement-heavy approach<\/a> under the Biden administration.<\/p>\n

Even if other countries jumped on the bandwagon with their own zero capital gains tax for local cryptos, it might backfire. The market would likely be flooded with new tokens, trading would become more fragmented, and liquidity would dry up for most of them. While countries like the UAE and Cayman Islands already have zero capital gains tax<\/a> on crypto, they apply it universally, not just to locally-created crypto tokens.<\/p>\n

Conclusion<\/h2>\n

The U.S. taking this approach risks skewing the market, incentivizing artificial token creation and isolating American investors from the global crypto economy. What seems like a tax break now might end up killing competition, pumping money into scams and hurting crypto\u2019s credibility in the long run.\n<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

In January, following Donald Trump’s inauguration, reports emerged claiming that his son, Eric Trump, had confirmed that U.S.-based cryptocurrencies would eventually be exempt from capital gains tax, while non-U.S. based cryptocurrencies would face a 30% tax. The elimination of capital gains taxes on U.S.-based cryptocurrencies might sound like a dream come true for American investors, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-15525","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/15525","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15525"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/15525\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}