"The Trump Tax Cuts" are in the news again, and the potential impact on the economy – and crypto – has everyone buzzing. If reintroduced, these tax cuts could push billions of dollars into the economy and spur spending and investment. Which all sounds good for crypto participants, as that could translate into more capital movement into Bitcoin, Ethereum, or altcoins as investors expand into high-growth assets.
But lets not forget the flip side. Most tax cuts usually come with the other side as well, so tax cuts would usually mean larger deficits, which could continue to worsen inflation and do nothing but add more pressure on the Fed to raise rates. While this could flag risk appetite as well (and lower crypto prices), there are some who are worried that reduced revenue from taxes could also spur more aggressive regulations on digital assets from the government in terms of offsetting revenue shortfalls.
I pay attention to how tax policy shapes the market. I know tax cuts sound good, but tax cuts do not equate to economic stability – or crypto adoption. Will tax cuts spur innovation or only widen the wealth gaps and unintended consequences?
The impact of fiscal policy in the crypto space regarding hiring practices with respect to policies is complex, and sometimes the hype clouds the reasoning. As you explore the implications of tax policies, stay connected and alert to what these experiencing, and to think critically about it as well. There will always be exciting opportunities, but these often come with hidden traps. Do you own research (DYOR)!
