Biden’s capital gains tax: What’s at stake for Bitcoin holders like you?

  • Biden’s 44.6% capital gains proposal raises questions in the crypto community about its impact.
  • Perspectives vary on Biden’s tax hike: some fear, while others remain unconcerned.

As someone who closely follows the crypto community and the tax policies that may impact it, I have mixed feelings about President Biden’s proposed capital gains rate hike. On one hand, some prominent figures in the community are expressing concerns about the potential economic implications and the impact on investors, particularly those in high-tax states or with significant holdings. Bill Ackman, for instance, has stated that he will not vote for Biden due to this proposal. Jason Williams, an entrepreneur and Bitcoin maximalist, even threatened to leave the country if these taxes were implemented.


I’m observing the anticipation building up as the US election draws near, with particular focus on President Biden’s Fiscal Year 2025 budget plan. In this proposal, President Biden suggests increasing the capital gains tax rate to an impressive 44.6%.

If passed, this would set a new record for the highest federal capital gains rate ever.

Looming concerns in the crypto community 

The news has sparked considerable debate and intrigue globally, as indicated by the crypto community’s response. Notably, Bill Ackman, the CEO of Pershing Square, has shared his views on X (previously known as Twitter).

“For anyone who is still confused on the topic, I am not voting for Biden.” 

I’d put it this way: Just to clarify, Jason A. Williams, also known as “Parabolic Guy,” is an entrepreneur and a staunch supporter of Bitcoin. He reaffirmed his stance on this topic.

A 25% tax on unrealized capital gains is hard to put into words how significantly it could impact the economy. It’s not an overstatement to say that such a tax might be solely responsible for economic downturn.

He even claimed,

“I will leave the United States at the passing if this.” 

Some potential investors may be hesitant to join or continue participating in the crypto market due to the relatively high taxes in their respective states.

Contrasting views 

Instead, Matthew Walrath, the founder of Crypto Tax Made Easy, pointed out during his chat with Cointelegraph that this issue is generally not a major worry for most people.

In his opinion, the enactment of these proposals would not bring about major changes for the average individuals in the cryptocurrency community.

“For 99.9% of people, it’s a big, fat nothing burger because it’s essentially just a proposal.”

Just like many other X users, I’ve recently come across a post from @SqueezeTaxes, who delved deeply into the potential effects of proposed policies on crypto investors.

Biden’s capital gains tax: What’s at stake for Bitcoin holders like you?

The effects of Biden’s tax plans mainly affect high-income earners, with the proposed measures focusing on individuals making $400,000 or above and those earning $1 million or more. Consequently, the average income earner is unlikely to be significantly impacted by these changes.

What lies ahead? 

To summarize, if capital gains aren’t adjusted for inflation before being taxed, it can result in paying taxes on gains that represent more of a decrease in purchasing power over time rather than true increases in value, ultimately leading to higher tax obligations.

From my perspective, the possibility of being taxed twice, particularly on investments in stocks or exchange-traded funds (ETFs), can add complexity to tax planning and potentially decrease the overall returns.

From my perspective, these tax adjustments could lead crypto investors like myself to reevaluate our approaches and search for methods to reduce our tax liabilities, as suggested by Eve Maina, the Managing Partner at ARG Ltd in Kenya.

Biden’s capital gains tax: What’s at stake for Bitcoin holders like you?

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2024-04-25 14:15