US Lawmakers Weigh Bitcoin Tax Exemption as Institutional Flows and Liquidations Rise

U.S. lawmakers are preparing to weigh a proposal that could remove a key tax friction for everyday Bitcoin (BTC) use, as markets digest fresh institutional flows, a wave of derivatives liquidations, and new security warnings targeting crypto wallet users.

According to reporting shared by journalist Pete Rizzo, members of the U.S. House of Representatives are expected to discuss applying a ‘de minimis’ exemption to small Bitcoin payments—effectively reducing capital gains tax obligations on low-value transactions to near zero. The initiative aims to address a long-standing issue in U.S. crypto policy: treating routine purchases made with BTC as taxable events, which can force consumers to track cost basis and report gains for even minor spending.

While details and legislative timing remain unclear, supporters view the exemption as a practical step toward making BTC more viable as a payment rail rather than solely a speculative asset. The measure is still at the discussion stage, and there is no certainty it will advance through Congress.

In parallel, institutional positioning appeared to shift at the margin. On-chain monitoring cited by Lookonchain and relayed by local media indicated that BlackRock ($BLK) recently sold 3,671 BTC, worth roughly $230 million, while buying 10,566 Ethereum (ETH) valued at about $17.7 million. Earlier transfer data also showed a BlackRock-linked address moving 3,966 BTC to Coinbase, followed by additional ETH accumulation. The transactions are likely part of portfolio rebalancing tied to ETF operations and custody flows, though the on-chain signals are closely watched by traders looking for clues about ‘institutional demand’ and near-term liquidity conditions.

Derivatives markets reflected a sharp squeeze higher. CoinGlass data showed $603 million in crypto futures liquidations over the past 24 hours, with short liquidations accounting for $460 million versus $143 million on the long side. Bitcoin liquidations totaled $279 million, while Ethereum accounted for $168 million. The imbalance suggests a rapid upward move forced bearish positions to close, amplifying price momentum through ‘liquidity-driven’ buying.

Spot prices also pushed higher, with Bitcoin breaking above $64,000 on OKX, up about 3.08% on the day. Traders often treat round-number recoveries as sentiment markers; holding above such levels can encourage risk-taking, while quick failures can reintroduce caution—especially in a market still sensitive to macro headlines and positioning shifts.

Beyond price action, security risks remained in focus after reports of a macOS malware strain dubbed ‘Reaper’ spreading via fake app download pages. The malware is said to impersonate popular apps and trick users into launching Apple’s Script Editor, then present a counterfeit security update window to capture device passwords. Security researchers warned it may target desktop wallet applications including Ledger Live, Trust Wallet, and Exodus, potentially modifying code to intercept future transactions. It can also steal stored browser credentials from Chrome, Firefox, and Edge, along with certain document and wallet-related files. Experts urged users to verify download sources and close any page that unexpectedly requests password entry or script execution.

Protocol-level developments also surfaced in privacy-focused crypto. Zcash (ZEC) developers reportedly agreed to rule changes for the planned ‘Ironwood’ upgrade targeted for activation in July. The update is intended to address a vulnerability discovered in the Orchard pool that could, in theory, allow unlimited counterfeit ZEC to be minted. Because of the pool’s privacy properties, confirming whether counterfeiting occurred before a patch is difficult. The Ironwood plan would introduce a new privacy pool based on the Orchard protocol, gradually phase out the existing pool, and add control flags in the zero-knowledge proof circuit design to encourage migration into the new pool.

In product expansion news, Circle launched cirBTC, an Ethereum-based token aimed at institutional DeFi users. The asset is backed 1:1 by native Bitcoin held by Circle, with on-chain reserve information provided through Chainlink’s proof-of-reserves framework. cirBTC is integrated into Circle Mint for issuance and redemption, and Circle said it is building a model that pairs USDC liquidity with Bitcoin collateral, with plans to expand to additional blockchains via Arc.

Traditional finance interest in crypto infrastructure also continued to broaden. Global asset manager Janus Henderson Investors joined Ethena’s network governance group, according to local reports, and is said to be exploring regulated investment products linked to the Ethena Labs ecosystem. Ethena has expanded around stablecoin and yield-bearing digital asset products, a segment drawing both attention and scrutiny as regulators evaluate how tokenized yield is generated and distributed.

Separately, Coinbase said institutional investors have been buying Bitcoin on dips, according to comments circulated by Rizzo. He added that sovereign wealth funds and retail investors have also increased BTC purchases, suggesting demand has persisted not only near local highs but also during pullbacks—a key question for markets navigating heightened volatility.

In South Korea, major exchanges moved to list CTR, a token set to start trading on June 9 at 3:00 p.m. Korea time, which translates to 2:00 a.m. ET. Upbit will support CTR trading in BTC and USDT markets, while Bithumb will list the asset in its KRW market, a venue often seen as a catalyst for ‘liquidity inflow’ and broader local accessibility.

Taken together, the developments highlight the market’s current mix of policy catalysts, institutional portfolio activity, and operational risks. A targeted U.S. tax exemption for small BTC payments could improve real-world usability if it progresses, but traders remain equally focused on near-term positioning dynamics and the growing importance of security hygiene as mainstream adoption expands.