President Biden to Double Capital Gains and Restrict Crypto Wash Sales

The Biden administration has announced plans to add the wash sale rule to the cryptocurrency market, which would prevent traders from taking advantage of the tax system by selling then immediately re-buying digital assets. The rule would likely have the effect of increasing the taxation on investors in the crypto realm, as such transactions would no longer be eligible for long-term capital gains incentives.

In addition to this, the Biden administration has revealed plans to double the long-term capital gains rate for those earning over $1 million a year. The move is expected to generate around $370 billion in additional taxation revenue over the next ten years.

The proposed changes to the taxation of cryptocurrency profits and capital gains come at a time when the sector is gathering more and more attention. Bitcoin, the biggest crypto by market value, has gained almost 173% since the start of 2021 and is now hovering around a record-breaking $60,000.