By Matthew Jessup

The cryptocurrency landscape may be on the verge of a transformative shift, as reports emerge of potential plans to eliminate capital gains taxes on US-based digital assets under a future Trump administration. This unconfirmed policy initiative, first reported by World Economic Forum Member Shayan Salehi via X (formally known as Twitter) and attributed to a member of Trump‘s transition team, could signal a fundamental realignment of the global crypto ecosystem if implemented.

This tax proposal aligns with broader cryptocurrency initiatives, including Trump’s endorsement of the BITCOIN Act introduced by Senator Cynthia Lummis. The landmark legislation proposes establishing a strategic Bitcoin reserve to strengthen the national economy, including a planned acquisition of approximately 5% of the total Bitcoin supply. This ambitious program would mirror the scope of current U.S. gold reserves while affirming individual rights to self-custody Bitcoin.

A Potential Watershed Moment for US Crypto

The proposed elimination of capital gains tax on US-based cryptocurrencies would represent more than a mere tax break – it could establish a new paradigm for digital asset development and investment. At Bitcoin 2024 in Nashville, Trump articulated his vision:

“If crypto is going to define the future, I want it mined, minted, and made in the USA.”

While specific policy details await official confirmation, this declaration suggests a potential shift in America’s approach to cryptocurrency regulation.

Regulatory Clarity Driving Innovation

The reported policy framework extends beyond tax considerations. Trump’s previously announced concept of a Bitcoin and Crypto Presidential Advisory Council, potentially tasked with designing transparent regulatory guidance within 100 days, suggests a structured approach to industry governance. “The rules will be written by people who love your industry, not hate your industry,” Trump stated, highlighting a pro-innovation stance that could accelerate market development.

Market Implications and Infrastructure Development

This proposed policy framework could create significant opportunities across the entire cryptocurrency ecosystem. Under such a plan, US-based protocols would gain substantial competitive advantages in attracting both retail and institutional capital. For example, infrastructure networks like Helium, which enables decentralized IoT and 5G connectivity, might see accelerated adoption through simplified participation if freed from complex tax implications.

Trump’s emphasis on supporting US-based crypto innovation suggests broad implications: “We will be creating so much electricity that you’ll be saying, ‘Please, please, President, we don’t want any more electricity.'” This commitment to development across all sectors would underpin the broader vision of American leadership in digital assets.

Global Competition and Market Migration

The US market has witnessed several prominent crypto enterprises relocating to more accommodating jurisdictions in recent years. However, the proposed policy framework could position the United States to recapture its role as the premier destination for cryptocurrency innovation. According to the reported plans, a pathway for foreign entities to reestablish themselves as US companies could trigger significant market reorganization.

Investment Implications

If implemented, the removal of capital gains tax on qualifying projects could create compelling opportunities within the US crypto ecosystem:

• • Enhanced capital efficiency in project development and deployment
  • Accelerated infrastructure buildout and adoption
  • Simplified participation mechanisms for retail and institutional investors
  • Increased competitive advantage for US-based projects

Strategic Outlook

The potential comprehensive approach to cryptocurrency regulation, combining proposed tax incentives with clearer regulatory frameworks, could position the United States at the forefront of digital asset innovation. If implemented, these policies could accelerate market maturation and establish America as a definitive hub for cryptocurrency development and investment.
While these proposals remain unconfirmed by official campaign channels, they represent an intriguing possibility for the future of US crypto policy. The convergence of clear regulation, tax efficiency, and robust infrastructure development could create unprecedented opportunities within the US crypto ecosystem. Market participants should monitor these developments closely while remaining mindful that these policies are still in the proposal stage and subject to change. The emerging American crypto renaissance may be on the horizon, but its exact shape and timing remain to be determined by future policy developments.

Disclosures: Sarson Funds, Inc. is a third-party marketing company and does not directly manage assets or provide investment advice. This information is for educational purposes only and is not intended as investment advice. It is recommended to consult a professional financial advisor before making any investment decisions. Past performance does not indicate future results. The opinions expressed here are solely those of the authors. Therefore, please consult with an investment advisor before making any investment decisions or have them contact Sarson Funds directly at [email protected].