Bitcoin price faces pivotal moment as major crypto bill hits Congress

The bitcoin price, hovering near all-time highs amid a resurgent crypto market, now faces a new variable: a proposed U.S. tax overhaul targeting digital assets. Senator Cynthia Lummis (R-WY) introduced what she calls “groundbreaking” legislation this week, aiming to simplify crypto taxation while generating an estimated $600 million in revenue by 2034.

The move comes as the White House crypto czar signals broader regulatory updates, adding to a volatile mix of political and economic forces shaping the next phase of Bitcoin price.

Bitcoin price and Key provisions of the Lummis bill

According to Forbes, the proposed legislation seeks to exempt small crypto transactions (under $300) from capital gains taxes, defer taxes on mining and staking income until tokens are sold, and close the “wash sale” loophole that lets traders claim deductions on rapid sell-buybacks.

“We cannot allow archaic tax policies to stifle American innovation,” Lummis stated, framing the bill as a push for “common-sense rules that reflect how digital technologies function.” Critics, however, warn the changes could create uneven incentives. “Exemptions for small transactions sound benign but may encourage micro-trading schemes,” noted tax attorney David Kemmerer, CEO of CryptoTrader.Tax.

Market reactions and political stakes

The Bitcoin price surged 50% from April lows ahead of the bill’s introduction, with traders speculating about its potential to attract institutional capital. The White House crypto czar has yet to comment, but the administration’s broader stance—balancing innovation with oversight—looms large.

Donald Trump, who recently declared himself the “first crypto president,” had previously pushed for Lummis’ reforms in his stalled “one, big, beautiful” economic bill. The timing now, amid election-year politics, raises questions about feasibility. “This is a long-term play for post-2024 policymaking,” predicted blockchain lobbyist Kristin Smith.

The wash rule loophole: Closed at last?

A focal point of the bill is extending the traditional 30-day wash rule to crypto, preventing traders from claiming losses on assets repurchased within a month. “This loophole distorted market behavior for years,” said SEC veteran John Reed Stark. “Closing it aligns crypto with equities—but expect pushback from high-frequency traders.”

Another surge for Bitcoin price?

With the bill’s path through Congress uncertain, analysts say Bitcoin’s short-term price may hinge on broader macroeconomic trends, including Fed policy shifts and the White House crypto czar’s pending announcements. Meanwhile, Lummis’ team emphasizes bipartisan outreach, citing “growing consensus that crypto taxation needs modernization.”