“The Elimination of Capital Gaves Taxes on Crypto Might Not Beon Boon to American Investory that It Wound Appear to Be.”, – WRITE: www.coindesk.com
The Elimination of Capital Gains Taxes On US-Based Cryptocurrencies Might Sound Like A Dream Come Come True For American Investors, But It Won Without A Price. WHETHER IT TURNS INTO A Net Negative For The Global Crypto Industry – Well, We’ll Just Have to wait and See.
But there are some glaring red flags.
1. Markets May Woble After Confirmation.If this new rule Actual Gets Approved and Takes Effect, Be Prepared for Market Turbulence As Us of Us Investors Could Dump Non-Us Cryptos, Take The TAX Hit and Rotate. This Could Increase Sell Pressure on Global Projects, Particularly Those with Significant US Investor Exposure.
But that would be the least of the conceerns-this could have Far-Reaching, Long-Term Consequences for the Entire Crypto Industry.
2. Making this Change Before Sound Regulations are in Place Could be Harmful.This elimination of taxes on crypto investments Could Trigger a surge in the creation of new cryptocurrencies from the us, similear to the 2017 initial outering. Collapsed or Turned Out to Be Scams Within Two Years. If the US Government Removes Capital Gains Tax Before Implementing Clear and Solid Regulations, We Could See a Repeat of That Chaos, But On A Much Larger Scale.
A Zero Capital Gains Tax Wuld Almost Certainly Lure in Us Retail Investors Who’ve Never Dabbled in Crypto, Drawn by The Obvious Tax Advantage. But if Bad Actors Flood the Space and Take Advantage of Them, It Could Drive TheSe Newcomers Away from Crypto Entirely.
3. Potential Harm to the Global Crypto Industry.The USA Be Home to Majoor Crypto Projects Like Cardano (ADA), Solana (SOL), XRP (XRP) and Hedera (HBAR), But It’s Also Been A Breeding Ground for Scam Tooks. In 2024, The FBI Even Issued A Warning About Criminals Creating Fake Crypto Tokens That Mimicked Legitimate Ones, Preying on Unsuspecting Investors.
In Addition, Global Crypto Startups May Have A More Challenging Time Securing Funding If Us Venture Firms Start Favoring Local Projects to Maximize Tax-Freets Returns. This Could Drain Investment from Emerging Markets, Whore Crypto Is Often For Real-World Financial Inclusion. Such A Change Wuld Also Likely Bring Bring Bring Many US FIRMS BACK HOME AFTERLY LEFTERE OF THE SEC’s Enforcement-Heavy Approach Under the Biden Administration.
EVEN IF Other Countries Jumped On the Bandwagon with Their Own Zero Capital Gains Tax for Local Cryptos, It Might Backfire. The Market Wuld Likely Be Flooded With New Tokens, Trading Willd Become More Fragmented, and Liquidity would Dry Up for most of them. While Countriers Like the UAE and CAYMAN ISLANDS ALREADY HAVE ZERO CAPITAL GAINS TAX ON CRYPTO, They Apply It Universally, Not Just to Locally-Created Crypto Tokens.
ConclusionThe US Taking this Approach Risks Skewing the Market, Incentivizing Artificial Token Creation and Isalating American Investors from the Global Crypto Economy. What sems a tax break now might end up killing competition, Pumping Money Into Scams and Hurting Crypto’s Crediiness in The Long Run.
Note: The Views Expressed in this Column Are Those of the Author and Do Not Necessarily Reflect Those of Coindesk, Inc. i Owners and Affilites.
