U.S. Bill Lets Taxpayers Pay Federal Taxes in Bitcoin
Rep. Warren Davidson’s Bitcoin for America Act would let U.S. taxpayers pay federal taxes in Bitcoin. Under the proposal, Bitcoin taxes bypass capital gains rules and feed into a new Strategic Bitcoin Reserve. The reserve holds BTC from tax revenue and government-seized coins, expanding assets without direct market purchases. Taxpayers can choose USD or BTC at filing time. Aimed at diversifying federal assets and reducing debt reliance, the plan leverages Bitcoin’s fixed supply and inflation resistance. Proponents argue it boosts financial resilience, crypto regulation clarity and global competitiveness. Critics warn that relying on asset forfeiture could create perverse incentives. If just 1% of annual U.S. federal taxes shifted to Bitcoin taxes over 20 years, the reserve could accumulate substantial BTC. The bill follows a Trump executive order that set up a reserve with seized coins only. For crypto traders, the act signals growing institutional demand and potential long-term bullish pressure on Bitcoin prices.
Bullish
Allowing Bitcoin taxes creates a new, on-chain demand source that supports BTC prices, signaling a bullish market impact. In the short term, legislative uncertainty may limit immediate price moves, but trader sentiment should improve as regulatory clarity grows. Over the long term, a Strategic Bitcoin Reserve funded by tax revenue would establish sustained institutional demand, reinforcing Bitcoin’s scarcity and store-of-value narrative. This dynamic mirrors past sovereign and institutional purchases that provided durable support for market prices.