According to CryptoQuant CEO Ki Young Ju, President-elect Donald Trump’s approach to Bitcoin and other cryptocurrencies will likely depend on the global perception of the United States economy and the strength of the US dollar. Meanwhile, Hive Digital announced that it will relocate to Texas due to Trump’s pro-Bitcoin policies, and Switzerland made major strides with a proposal to include Bitcoin in its national monetary reserves. Crypto Investors Get Temporary Relief from IRS FIFO Rule The United States Internal Revenue Service (IRS) granted temporary relief to cryptocurrency holders on centralized exchanges from a rule that would have mandated the use of the FIFO (First In, First Out) accounting method for tax purposes. Under the initial IRS ruling , if investors did not explicitly select an accounting method, like HIFO (Highest In, First Out) or Specific Identification (Spec ID), brokers would default to reporting sales using FIFO. This method assumes that the oldest cryptocurrency bought is sold first, which could lead to higher capital gains taxes for many taxpayers. Tax experts like Shehan Chandrasekera , the head of tax at Cointracker, warned that the immediate enforcement of the rule could have caused serious financial strain for crypto investors during a bull market. Selling older assets first, often with the lowest cost basis, would unintentionally maximize taxable gains. Mark Thomas , a crypto commentator, pointed out that FIFO could be beneficial only in specific scenarios, like when the sale date is more than one year after the earliest crypto purchase but within a year of the latest purchase, potentially qualifying for long-term capital gains tax instead of short-term. The temporary relief postpones the rule’s enforcement for sales on centralized crypto exchanges until Dec. 31 of 2025. This extension allows brokers more time to implement support for multiple accounting methods. During this period, taxpayers are responsible for maintaining their own records for tax reporting purposes. This update happened after a legal challenge was filed on Dec. 28 by the Blockchain Association and the Texas Blockchain Council against the IRS. The lawsuit argues that the expanded broker reporting rules, which include decentralized exchanges (DEXs) and require brokers to disclose detailed information about digital asset transactions, violate constitutional rights. The expanded requirements are set to take effect in 2027, and will obligate brokers to report taxpayer identities and gross proceeds from crypto and other digital asset sales. Trump Era May Shift Focus Away from Bitcoin In addition to the latest tax developments, CryptoQuant CEO Ki Young Ju recently suggested that President-elect Donald Trump’s approach to Bitcoin and other cryptocurrencies will likely depend on the global perception of the United States economy and the strength of the US dollar. According to Ju, store-of-value assets like Bitcoin and gold typically experience price surges when there are perceived threats to US economic dominance . However, the continued global confidence in the US economy and the dollar as a safe haven currency may diminish the likelihood of the Trump administration adopting Bitcoin as part of a strategic reserve. Ju argued that Trump’s focus on projecting US strength and the ongoing inflows of capital into the dollar could reinforce confidence in its supremacy, which could potentially lead to a reversal of pro-Bitcoin policies. Ju also shed some light on a broader trend, particularly in emerging economies, where people increasingly choose the US dollar or dollar-pegged stablecoins over gold or Bitcoin as a safe haven. He specifically pointed to examples like Koreans favoring the dollar due to the weakening won and people in hyperinflation-stricken regions using stablecoins to preserve value. At the Bitcoin MENA conference, Paxos CEO Charles Cascarilla stated that the financial system is moving on-chain, with stablecoins poised to improve the utility of the US dollar by combining its reliability with the internet’s speed and connectivity. He also mentioned that stablecoins have become a critical tool for individuals in regions experiencing economic instability. For instance, Turkey grappled with a 67% inflation rate in March of 2024, and has seen the world’s highest rate of stablecoin purchases relative to GDP. Stablecoin purchasing as a share of GDP (Source: Chainalysis) Chainalysis reported in 2023 that over 50% of digital assets sent to Latin American countries like Argentina, Brazil, Colombia, Venezuela, and Mexico were stablecoins. Trump’s Bitcoin Vision Attracts Hive Digital to Texas Bitcoin mining firm Hive Digital Technologies (HIVE) announced plans to relocate its headquarters from Vancouver, Canada, to Texas thanks to President-elect Donald Trump’s pro-Bitcoin stance. In a statement on Dec. 31, HIVE specifically mentioned the Trump administration’s support for innovation and a favorable regulatory environment for Bitcoin miners as influential factors in the decision. Texas was chosen for its supportive business climate, robust energy infrastructure, and access to skilled talent. HIVE described the US as a global leader in cryptocurrency adoption. The company also sees the depth of US capital markets, with $40 trillion in market capitalization and $500 billion in daily trading volumes, as very essential to its growth strategy. Executive chairman Frank Holmes believes that relocating to the US provides the liquidity, visibility, and valuation opportunities that are necessary for scaling operations. Texas emerged as a hub for Bitcoin mining by hosting major operators like Applied Digital, Galaxy, Bitdeer, Cipher, Core Scientific, Hut 8, Riot Platforms, Marathon Digital, and Iris Energy. The state’s appeal to miners aligns with Trump’s earlier statements advocating for Bitcoin mining to remain in the US. After a meeting with Riot Platforms executives, Trump shared plans on Truth Social about his desire for all future Bitcoin to be mined domestically. Switzerland Moves Closer to Bitcoin Adoption at National Level Meanwhile, a new proposal to require the Swiss National Bank (SNB) to include Bitcoin in its monetary reserves has been initiated by the Swiss federal chancellery. The initiative was launched on Dec. 31, and aims to gather 100,000 signatures to qualify for a public referendum. Giw Zanganeh, Tether’s vice president of Energy and Mining, and Yves Bennaïm, founder of Swiss Bitcoin nonprofit think tank 2B4CH, spearheaded the proposal alongside eight other Bitcoin advocates. The idea was first explored in October of 2021, and gained momentum as Bitcoin's adoption by nation-states became more plausible. The proposal seeks to amend Article 99 Paragraph 3 of the Swiss Federal Constitution to mandate the SNB to build monetary reserves that include both gold and Bitcoin. The proponents of the proposal argue that this measure will contribute to a financially sound and sovereign Switzerland. The campaign was officially registered in Switzerland’s Federal Gazette on Dec. 31, and has until June 30 of 2026 to collect the required signatures. Bennaïm described the timing as ideal due to the increasing relevance of Bitcoin in global financial systems. Bitcoin adoption in Switzerland has seen a lot of growth, particularly in Lugano, where 260 merchants accept the cryptocurrency. The city also hosts the annual “Plan ₿” Bitcoin conference. However, SNB Chair Martin Schlegel has voiced some concerns about Bitcoin’s energy consumption and suitability as a payment method. Globally, other nations are also exploring Bitcoin reserves. In the United States, a bill sponsored by Senator Cynthia Lummis proposes holding Bitcoin in the Treasury’s reserves. Politicians in Brazil and Poland expressed similar interest.
