Short Answer

Both the model and the market overwhelmingly agree that Trump will not eliminate capital gains taxes on crypto before 2027, with only minor residual uncertainty.

1. Executive Verdict

  • Trump campaign proposed eliminating capital gains tax on Bitcoin and U.S. tokens.
  • The 2025 Chairman's Mark did not eliminate cryptocurrency capital gains.
  • Crypto advocacy groups prioritize specific tax changes, not full capital gains elimination.
  • Republican efforts prioritized extending TCJA, not specific crypto tax cuts.
  • As of May 2026, cryptocurrency capital gains remain fully taxable.

Who Wins and Why

Outcome Market Model Why
Before 2027 10.0% 10.0% Eliminating capital gains taxes on crypto would require significant Congressional action and bipartisan support.

Current Context

Capital gains on crypto remain fully taxable as of May 2026. As of May 4, 2026, there has been no elimination of capital gains tax on cryptocurrency; all gains remain taxable per IRS regulations [^][^]. This indicates that a comprehensive repeal of these taxes has not been enacted.
Prior proposals for crypto tax elimination have not been enacted. In 2024, Trump proposed a 0% capital gains tax on Bitcoin and U.S.-made tokens, but this specific proposal was not enacted into law [^]. Similarly, Eric Trump suggested a 0% tax for U.S.-based crypto projects in January 2025, though this was presented as a speculative idea rather than official policy [^][^]. While a 'One Big Beautiful Bill' was signed on July 4, 2025, it failed to incorporate the Lummis de minimis exemption for crypto transactions [^]. However, some legislative relief did occur in April 2025 when Trump signed legislation to repeal the IRS DeFi broker reporting rule, a measure that became effective in 2026, though it did not eliminate capital gains taxes themselves [^][^][^].
Recent legislative efforts offer limited relief, and market odds are low. A draft of the PARITY Act in March 2026 proposed certain de minimis exemptions for stablecoins and addressed wash sales, but it did not include a full elimination of capital gains taxes on crypto assets [^][^]. The prediction market Polymarket reflected low expectations for such an elimination, showing approximately 5% odds for the elimination of capital gains tax by December 31, 2025, and less than 1% before June 2025, with the latter market resolving as "No" [^][^].

2. Market Behavior & Price Dynamics

Historical Price (Probability)

Outcome probability
Date
This prediction market has demonstrated a consistent sideways trend, with the probability of a "YES" outcome trading within a narrow range of 5.1% to 11.0%. The market has established an informal support level around the 5% mark and resistance near 11%, a ceiling it has not managed to break. Overall, the price action reflects a stable but low expectation for the elimination of crypto capital gains taxes. The market started at 7.0% and is currently trading at 10.0%, near the top of its historical range.
The most significant recent movement was a price increase from 6.0% to 10.0% on May 4, 2026. The provided context does not offer a clear catalyst for this spike. In fact, the news confirming that no tax elimination had been enacted as of that date would typically be bearish for a "YES" resolution. The total traded volume of 1,436 contracts is modest, and the sample data indicates recent price changes have occurred on zero volume. This suggests extremely low liquidity, meaning price shifts may be the result of very small trades rather than a change in broad market conviction.
The chart suggests that overall market sentiment is deeply skeptical. Traders have consistently priced the probability of this event occurring at less than 11%, indicating a strong consensus against a "YES" outcome. The combination of a tight, low-probability trading range and minimal volume implies a lack of significant new information or catalysts that would lead participants to believe the long-shot odds will change.

3. Market Data

View on Kalshi →

Contract Snapshot

This market resolves to "Yes" if a bill explicitly and permanently eliminating capital gains taxes for at least one clearly defined class or category of digital assets becomes law before January 1, 2027; temporary, partial, or conditional eliminations do not qualify. If this condition is not met by the deadline, the market resolves to "No." The market will close early if the event occurs, otherwise it closes by January 1, 2027, at 10:00 AM EST, with projected payouts 30 minutes after closing.

Available Contracts

Market options and current pricing

Outcome bucket Yes (price) No (price) Last trade probability
Before 2027 $0.10 $0.94 10%

Market Discussion

Despite signals of a pro-crypto stance and actions like signing an executive order and nullifying an expanded IRS broker rule, Donald Trump has not taken steps to eliminate capital gains taxes on cryptocurrency [^]. The IRS continues to treat crypto as property subject to capital gains taxes (up to 37% short-term, 20% long-term) as of 2026, with unconfirmed proposals (e.g., Eric Trump's) and a removed de minimis exemption ($300) not progressing to legislation [^][^][^][^]. Prediction markets reflect this skepticism, showing low odds (4-6% by Dec 31, 2026) for such an elimination [^][^].

4. What Are Revenue Impacts of Crypto Capital Gains Tax Policies?

JCT Score (Full Crypto Capital Gains Elimination)Not available, speculated significant long-term negative revenue impact [^][^]
JCT Score (Lummis Bill with De Minimis)Estimated revenue-positive, $600 million (2025-2034) [^][^]
Current US Crypto Tax TreatmentTreated as property, capital gains taxes apply [^][^][^][^]
An official Joint Committee on Taxation (JCT) revenue score for fully eliminating capital gains taxes on cryptocurrency is currently unavailable [^] [^] . While such a policy might initially boost tax revenue as investors realize existing gains, it is widely speculated to lead to a significant long-term negative impact on revenue, potentially making capital gains across various asset classes effectively zero through crypto-mirrored assets [^][^][^]. Under existing U.S. tax law, cryptocurrencies are classified as property, meaning profits from their sale, exchange, or use are subject to capital gains taxes, with different rates for short-term and long-term gains [^][^][^][^].
Moderate crypto tax exemptions show positive revenue projections. In contrast to a full elimination, more moderate legislative proposals have shown a positive revenue outlook. For instance, Senator Cynthia Lummis's bill, which included a $300 per-transaction de minimis exemption for personal digital asset transactions (up to a $5,000 annual cap), was estimated by the JCT to be revenue-positive, generating approximately $600 million over the 2025-2034 period [^][^]. Another proposal, the PARITY Act, suggests a $200 de minimis exemption specifically for stablecoin transactions and provisions for non-taxable sales under certain conditions. This act aims at easing compliance burdens for small, everyday transactions involving stablecoins rather than broadly altering capital gains tax on all digital assets [^][^][^][^][^][^][^].

5. Are Crypto Advocacy Groups Lobbying for Full Capital Gains Tax Elimination?

Primary Lobbying FocusSpecific, narrower tax-rule changes (wash sale, stablecoin exemption rules) [^][^][^]
Key Legislative DiscussionsStablecoin de minimis/exemption for small payments, applying wash-sale rules (PARITY Act) [^]
Emphasis on Full EliminationNo disclosed lobbying emphasis found supporting 'full elimination' of capital gains taxes [^][^][^]
Crypto advocacy groups prioritize specific tax rule changes, not full capital gains elimination. Based on 2025 federal lobbying disclosures, these groups are not concentrating their resources on the full elimination of capital gains taxes on crypto assets. Instead, their disclosed lobbying efforts and policy priorities primarily focus on specific, narrower tax-rule adjustments, such as wash sale and stablecoin exemption rules. For example, the Blockchain Association’s 2025 LDA filing indicates lobbying under the "TAX" general issue area [^]. Similarly, Coin Center frames its policy agenda around specific tax compliance or tax-rule fixes rather than the complete elimination of capital gains tax [^][^].
Advocacy groups focus on specific stablecoin and wash sale rule adjustments. Evidence from these groups does not support a spending focus on "full elimination" of capital gains taxes. Coin Center's tax-related work explicitly critiques wash-sale rule expansion, suggesting opposition to more ambitious wash-sale extensions due to potential harm to crypto tax compliance [^]. The broader policy debate also includes targeted stablecoin exemptions and changes to wash-sale or constructive-sale rules, as exemplified by discussions surrounding the PARITY Act. A December 2025 CoinDesk report on the PARITY Act further describes concurrent, less ambitious reforms, such as stablecoin de minimis exemptions for small payments and the application of wash-sale rules [^]. There is no indication that major groups are currently lobbying for a complete capital gains elimination.

6. Are Capital Gains Taxes on Cryptocurrency Being Eliminated?

2025 Tax Bill StatusNo capital gains tax elimination for crypto included [^][^]
Current IRS RulesCryptocurrency gains subject to capital gains tax (as of early 2026) [^][^][^]
Odds of Trump Enacting Crypto Tax Exemption (Before 2026)Under 10% (January 2025 prediction markets) [^][^]
The 2025 Chairman's Mark did not eliminate crypto capital gains. The official Chairman's Mark of the 2025 tax reconciliation bill from the House Ways and Means Committee did not include any provisions for eliminating capital gains taxes on cryptocurrencies [^][^]. Furthermore, a White House report from August 2025, which outlined a policy roadmap for digital assets, similarly did not propose making crypto tax-free [^][^].
Current IRS rules subject crypto gains to capital gains tax. As of early 2026, cryptocurrency gains remain subject to capital gains tax under current IRS regulations. Short-term gains are taxed as ordinary income, while long-term gains are subject to rates of 0%, 15%, or 20%, depending on income levels [^][^][^]. However, in November 2025, Representative Warren Davidson introduced the "Bitcoin For America Act," a bill that would permit federal taxes to be paid with Bitcoin without incurring capital gains liability on the Bitcoin used for such payments [^][^].
Future crypto tax exemptions were considered unlikely by markets. Prediction markets in January 2025 assessed that the likelihood of the Trump administration enacting any crypto tax exemption before 2026 was less than 10% [^][^].

7. How Does Treasury Define Crypto for Capital Gains on US vs Foreign Tokens?

Current Crypto Tax TreatmentTreated as property under Notice 2014-21 (2023 modifications) [^][^][^]
2025 White House RecommendationNew digital asset tax class and CARF for foreign reporting [^][^]
Senator Lummis Bill Revenue ImpactEstimated $600 million increase in revenue [^][^]
The Treasury Department faces definitional challenges in taxing digital assets as property. The Treasury Department and IRS currently tax digital assets by treating cryptocurrency as property, a framework outlined in guidance such as Notice 2014-21 with subsequent modifications in 2023 [^][^][^]. This approach has created specific definitional challenges, particularly concerning proposed distinctions for capital gains. For instance, a campaign proposal suggested a 0% capital gains tax on US-based tokens compared to 30% on foreign tokens, underscoring the complexity for the Treasury’s Office of Tax Policy in defining 'cryptocurrency' to differentiate between them [^][^][^]. While a 2025 White House Working Group recommended a new digital asset tax class and a Crypto-Asset Reporting Framework (CARF) for foreign reporting, the precise method for addressing the U.S.-based versus foreign-based token distinction for varied capital gains treatment within Treasury's definitional approach remains unclear [^][^].
Key Republican members of the Senate Finance Committee favor simpler, broader digital asset tax rules. The complexities surrounding digital asset taxation have significantly impacted these members. Senator Crapo, as chair, highlighted in an October 2025 hearing that tax uncertainty hinders both compliance and innovation, advocating for bipartisan rules to establish clear leadership in this area [^][^]. Building on this, Senator Lummis introduced comprehensive legislation in 2025. This bill broadly defines 'digital asset' under IRC §7701(51), includes a de minimis $300 exemption, and applies wash sales and lending rules, a proposal estimated by the Joint Committee on Taxation to increase revenue by $600 million [^][^]. This legislative effort reflects a preference for a more unified and simplified framework for digital asset taxation.

8. Did Republican Efforts Include Crypto Tax Cuts in 2025?

TCJA Tax Cuts StatusPermanence prioritized in FY2025 budget and OBBBA [^][^][^][^][^][^][^][^][^][^][^][^]
TCJA Extension CostExceeded $4 trillion over ten years [^]
Crypto Capital Gains TaxNot included in "One Big Beautiful Bill Act" (OBBBA) [^][^][^]
The Republican Study Committee (RSC) and the House Freedom Caucus (HFC) consistently prioritized making the individual Tax Cuts and Jobs Act (TCJA) tax cuts permanent in their FY2025 budget and reconciliation proposals [^] [^] [^] [^] [^] [^] [^] [^] [^] [^] [^] [^] . The RSC characterized the potential expiration of these cuts as a "massive tax increase" that would harm economic recovery [^][^][^][^][^][^][^][^][^][^][^][^]. This objective was central to their "Reconciliation 2.0" framework and the "One Big Beautiful Bill Act" (OBBBA), with the estimated cost of extending these TCJA provisions projected to exceed $4 trillion over a decade [^][^][^][^][^][^][^][^][^][^][^][^][^].
Crypto capital gains elimination was not included in key legislation. Despite the House Freedom Caucus's involvement in broader cryptocurrency legislation in July 2025, the "One Big Beautiful Bill Act" (OBBBA) did not contain provisions to eliminate capital gains taxes on cryptocurrency [^][^][^][^][^][^][^]. Furthermore, a proposed crypto de minimis tax exemption was also excluded from the act [^][^][^]. By December 2025, no formal legislation proposing a capital gains tax exemption specifically for cryptocurrency was introduced, and such transactions continued to be subject to existing capital gains tax laws throughout 2025 [^][^][^][^].

9. What Could Change the Odds

Key Catalysts

As of May 2026, cryptocurrency capital gains remain fully taxable under current IRS rules [^] [^] . A significant catalyst for change emerged in October 2024, when the Trump campaign proposed eliminating capital gains tax for Bitcoin and U.S.-made tokens [^]. Similar speculative comments regarding zero capital gains for U.S.-based crypto projects were made by Eric Trump in January 2025 [^]. However, Polymarket currently indicates low odds, estimated at 4-5%, for the elimination of crypto capital gains tax by December 31, 2026 [^][^].
Other legislative efforts have focused on broader crypto regulation without directly addressing capital gains tax. The GENIUS Act, signed into law on July 18, 2025, established a stablecoin framework but did not include tax changes [^][^]. Similarly, the CLARITY Act, which passed the House on July 17, 2025, with a Senate markup expected in April 2026, primarily deals with stablecoin regulation and has not indicated changes to capital gains tax [^][^]. An attempt at a de minimis exemption by Senator Lummis, which would have applied to transactions under $300 after December 31, 2025, failed as part of a larger bill [^][^].
The upcoming November 2026 midterms represent a critical deadline for any potential legislative action on crypto tax policies. Should significant changes not pass by this point, further efforts could be delayed until approximately 2030, marking a key window for policy shifts [^].

Key Dates & Catalysts

  • Expiration: January 01, 2027
  • Closes: January 01, 2027

10. Decision-Flipping Events

  • Trigger: As of May 2026, cryptocurrency capital gains remain fully taxable under current IRS rules [^] [^] .
  • Trigger: A significant catalyst for change emerged in October 2024, when the Trump campaign proposed eliminating capital gains tax for Bitcoin and U.S.-made tokens [^] .
  • Trigger: Similar speculative comments regarding zero capital gains for U.S.-based crypto projects were made by Eric Trump in January 2025 [^] .
  • Trigger: However, Polymarket currently indicates low odds, estimated at 4-5%, for the elimination of crypto capital gains tax by December 31, 2026 [^] [^] .

12. Historical Resolutions

No historical resolution data available for this series.