U.S. Bill Would Create Strategic Bitcoin Reserve, Allow BTC Tax Payments and Set 0% Capital Gains
Representative Warren Davidson’s ’Bitcoin for America Act’ proposes recognizing Bitcoin as a strategic financial asset, creating a Strategic Bitcoin Reserve managed by the U.S. Treasury, and permitting taxpayers to pay federal taxes in Bitcoin. The bill, first introduced in November 2025, would treat BTC transfers to the government as non-taxable events (0% capital gains on transfers to the Treasury) and require conversion or custody arrangements via licensed exchanges and Treasury oversight. Provisions include transparency safeguards, acquisition strategies (for example dollar-cost averaging) to limit market disruption, and accounting rules to avoid taxpayer gain/loss recognition on tax payments. The proposal remains under consideration and is not law. International developments mirror the idea: Brazil’s lower house has seen a proposal for a Strategic Sovereign Bitcoin Reserve (RESBit) with similar capital gains exemptions, and the Czech Republic recently removed capital gains tax on Bitcoin holdings. Separately, Senator Cynthia Lummis has promoted a de minimis exemption for small crypto gains. For traders, the bill could raise Bitcoin’s utility in everyday transactions, lower tax friction for investors, and increase demand and on-chain activity if enacted. Key implementation questions remain around pricing/valuation when accepting BTC, tax accounting rules, reserve acquisition mechanics, and the macro-fiscal implications of holding volatile crypto on the Treasury balance sheet.
Bullish
The proposal is bullish for Bitcoin price prospects because it directly increases Bitcoin’s potential demand and utility: allowing federal tax payments in BTC and creating a Strategic Bitcoin Reserve institutionalizes government-level demand and reduces tax frictions for holders (0% capital gains on transfers). Such structural use cases can attract long-term investors, improve liquidity, and encourage wider institutional adoption. Short term, markets may react positively on passage or credible advancement of the bill, as traders anticipate increased on-chain flows and reduced selling pressure from taxed events. However, near-term volatility could rise due to implementation uncertainty — valuation rules, Treasury acquisition pace, and conversion mechanics could cause episodic selling or buying. Long-term bullish factors outweigh risks if the reserve grows steadily without forcing fire-sales. Conversely, if the Treasury’s acquisition method or timing triggers large sell-offs to realize fiat needs, that could mute gains. Overall, the net effect on BTC price is expected to be positive, contingent on implementation details and legislative progress.