Is It Possible Donald Trump Make Crypto Tax Free?

Cryptocurrency has been a hot topic for years now, with investors and regulators alike trying to make sense of its fluctuating value and potential.

With various countries implementing their own policies, one prominent question keeps surfacing: Will Donald Trump make cryptocurrency tax-free? Let's dive into the details to see if this is even a possibility.

Trump and Cryptocurrency: The Background

Former President Donald Trump has expressed significant support for cryptocurrency, a stance that has made headlines since his time in office. As a pro-business president, Trump’s policies aimed to encourage innovation in technology, including the cryptocurrency space.

His vision for the future of digital assets centered on making the United States a global leader in Bitcoin, positioning crypto as an integral part of America’s financial system.

However, the question remains: Will he push to remove taxes from crypto? Specifically, the idea revolves around the capital gains tax, which is typically levied on profits made from the sale of assets like stocks and crypto.

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The Proposal from Eric Trump: Crypto Tax Exemption

In January 2025, Eric Trump, Donald Trump's son, stirred the pot by proposing an exemption from capital gains tax for U.S.-based cryptocurrency projects. This tax exemption would apply to cryptocurrencies like:

• Cardano (ADA)
• Solana (SOL)
• Algorand (ALGO)

The proposal was designed to encourage U.S.-based companies to keep their operations onshore, helping the American blockchain sector grow. While it’s still a work in progress, this idea set the stage for discussions on whether cryptocurrencies could be treated more favorably when it comes to taxes in the future.

Will Trump Make Crypto Tax-Free?

At this point, the idea of Donald Trump removing capital gains tax from cryptocurrency is mostly speculative. There are many unknowns:

• Which cryptocurrencies will benefit? Will this apply to all digital assets, or just U.S.-based ones?
• Will it apply at the state or federal level? Different states may have different approaches to crypto tax.
• Would this exemption apply to both short-term and long-term gains? Current U.S. tax law distinguishes between the two.

At the time of writing, there is no concrete proposal or bill to remove crypto taxes, and it’s still unclear when (or if) such a change could happen. The Polymarket prediction market currently puts the odds of this policy being implemented by June 2025 at less than 1%.

Interestingly, Missouri has already made moves to eliminate state income taxes on capital gains from crypto and stocks. This bold step by a Republican-led legislature could serve as a blueprint for future state-level reforms in other parts of the country.

While this doesn't guarantee a national tax-free crypto policy, it shows that states are moving forward on crypto tax exemptions, and it may inspire others to follow suit.

What’s Missing from the Trump Crypto Tax Proposal?

There are still several gaps in the Trump-backed proposal that need to be filled before it could become a reality:

1. Scope of the Tax Break: It's unclear whether the 0% capital gains tax would apply to both short-term and long-term holdings, or if it would only apply to long-term investments, as seen in countries like Portugal and Germany.
2. Which Cryptos Are Eligible? The term "U.S.-based cryptocurrency" is vague. Cryptos like Bitcoin and Ethereum are decentralized and not tied to any specific country, so it’s uncertain whether they would qualify for the tax break.
3. Political and Legislative Roadblocks: There is no official proposal currently in Congress. Even if such a proposal were to be introduced, the odds of it passing both chambers and becoming law are uncertain.

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The Bottom Line: Will Crypto Tax-Free Policies Pass?

Currently, the idea of making crypto tax-free is more of a talking point than a concrete policy. As it stands, the tax laws regarding crypto remain the same: you are required to report your crypto gains and losses, and you’ll be taxed accordingly.

Capital gains tax rates can be as high as 37% for short-term gains and 28% for long-term gains.

Conclusion

In conclusion, while it’s unclear whether Donald Trump will make crypto tax-free, his administration has shown strong support for the cryptocurrency industry. The proposal from Eric Trump regarding a tax exemption for U.S.-based crypto projects is still in the works, and it remains to be seen how this will play out in the future.

While there are potential benefits to eliminating capital gains tax on crypto, there are also significant risks, including market volatility and regulatory challenges.

FAQs

1. What is the current tax rate on cryptocurrency?

The tax rate for cryptocurrency depends on whether the gains are short-term or long-term. Short-term gains are taxed up to 37%, while long-term gains can be taxed up to 28%.

2. Will Trump’s proposal make all cryptocurrencies tax-free?

It’s unclear which cryptocurrencies would qualify under the proposed tax exemption. The proposal lacks specifics on whether it would apply to all digital assets or only to U.S.-based cryptocurrencies.

3. Do I still need to report crypto taxes?

Yes, even though the proposal is still in its early stages, you are required to report all capital gains and losses from crypto activity as per the current tax laws.