The Senate narrowly passed a $3.3 trillion fiscal bill.
On Tuesday (7/1), the U.S. Senate narrowly passed the large fiscal bill pushed by the Trump administration, the 'Big Bill of Tax Breaks and Spending Cuts,' with Vice President JD Vance casting the crucial vote to break the tie. This $3.3 trillion bill finally passed after more than 24 hours of marathon debate, but the process was fraught with difficulties.
Image source: (AP News) The U.S. Senate narrowly passed the large fiscal bill pushed by the Trump administration on Tuesday (7/1) with a vote of 50 to 50.
Three Republican Senators: Thom Tillis of North Carolina, Susan Collins of Maine, and Rand Paul of Kentucky voted against the bill along with all Democrats. The bill includes $4.5 trillion in tax cuts, making the Trump-era tax rates permanent, and adds policies to exempt tips from taxation. At the same time, the bill cuts $1.2 trillion in spending, mainly targeting Medicaid and food stamp programs.
Senate Majority Leader John Thune stated, 'In the end, we got the job done.' However, the bill now must return to the House for a final vote, and House Speaker Mike Johnson previously warned the Senate not to make significant changes to the version already passed by the House. Republican leaders have scheduled a vote for Wednesday, vowing to send the bill to the President's desk by the July 4 deadline set by Trump.
Provisions for cryptocurrency tax reform were not included in the final version.
Although Wyoming Senator Cynthia Lummis proposed to include provisions in the bill to address the 'unfair tax treatment' of cryptocurrencies, these amendments ultimately did not make it into the version reviewed by the Senate. Lummis's proposal aimed to provide tax exemptions for cryptocurrency transactions below $300 and to re-evaluate the taxation of mining and staking rewards.
Image source: X Senator Cynthia Lummis previously proposed to include provisions in the bill to address the 'unfair tax treatment' of cryptocurrencies.
Alaska Representative Nicholas Begich III stated after the vote, 'I hope to see this provision in the final product, but I believe there will be other opportunities to include it in must-pass legislation in the future.'
Senator Cynthia Lummis also acknowledged that the bill is 'not perfect,' but is still 'an important step in the right direction,' and stated that she will continue to negotiate with people like Finance Committee Chairman JD Vance to seek tax reform through other bills or avenues.
The cryptocurrency industry is disappointed by the absence of tax reform this time, as several industry groups previously supported related amendments, believing they would enhance the convenience of cryptocurrency payments and address the issue of double taxation. However, as the bill returns to the House for review, there remains a possibility of re-discussing related provisions in the subsequent legislative process.
The passage of the bill brings complex effects to the cryptocurrency market.
Although the cryptocurrency tax provisions were not included, this $3.3 trillion fiscal bill could still have a significant impact on the cryptocurrency market. Analysts believe the bill is expected to increase national debt by over $3 trillion, potentially triggering long-term inflationary pressures, thereby reinforcing Bitcoin's status as a hedge against currency devaluation.
The prices of Bitcoin and Ethereum remained stable on the day the bill passed, but market participants expect a weaker dollar and declining confidence in U.S. fiscal management, which may reinforce Bitcoin's narrative as 'digital gold.' Major altcoins may also benefit from the trend of funds shifting from bonds to alternative assets, but the performance of infrastructure and utility tokens may outperform speculative assets like meme coins.
Retail investors may react positively to lower personal tax rates and simplified cryptocurrency reporting rules, but institutional investors might take a more cautious approach regarding the rapidly accumulating debt and potential inflation outlook. In the short term, if the House passes the bill, Bitcoin and Ethereum could rise further, and the total cryptocurrency market cap could test the range of $3.5 trillion to $3.7 trillion.
Subsequent legislative processes remain uncertain.
After the bill returns to the House, the Republican's slim majority in Congress faces strong opposition from Democrats. Massachusetts Senator Elizabeth Warren criticized, 'Trump and congressional Republicans are issuing a $15 billion check to Meta just for its existence, while planning to pay for it by cutting healthcare for millions of Americans.'
Image source: Instagram Senator Elizabeth Warren criticized Trump and congressional Republicans for issuing a $15 billion check to Meta just for its existence.
Although both chambers are advancing bills on stablecoin regulation, establishing a national Bitcoin reserve, and creating a digital asset market structure, these legislations may not be considered until the budget bill is processed. The Senate passed the GENIUS Act on June 17 and is currently awaiting consideration in the House.
Further Reading
The GENIUS Act passes the Senate! Focused on dollar dominance and consumer protection, now awaiting House review.
Nicholas Begich III predicts that the Bitcoin reserve bill may not pass until 'the end of this year or early next year,' as 'there are many activities scheduled on the agenda that are important legislations, but they will yield to the ongoing budget and budget reconciliation work.' The fate of cryptocurrency tax reform will still depend on subsequent legislative opportunities and the results of political negotiations.
'Controversial bill narrowly passes! What impact will the Senate's passage of the Big Bill have on cryptocurrencies?' This article was first published in 'Crypto City.'
