The crypto market is up nearly 5%, and compared to recent weeks, that feels significant. Major assets like Bitcoin, Ethereum, XRP, and Solana are showing strong green candles across the board.
But what’s actually driving this move?
Let’s break it down carefully — and clear up a rumor that’s spreading online.
The 0% Crypto Tax Rumor – Fact or Fiction?
One viral claim circulating on social media suggests that President Trump has confirmed a 0% capital gains tax on cryptocurrency transactions.
After reviewing available information, there is currently no official confirmation or signed law implementing such a policy.
There was discussion earlier this year about reducing or eliminating capital gains taxes on crypto, and an executive order was reportedly proposed. However, no formal legislation has been passed.
So for now, the 0% crypto tax narrative remains speculation — not confirmed policy.
Markets sometimes move on rumors. But investors should separate excitement from verified information.
The Real Drivers Behind the Rally
Several more concrete factors appear to be contributing to the recent upward movement:
- Short Liquidations and Short Squeeze
Over $300 million in short positions were liquidated recently. When traders betting against the market are forced to buy back positions, it creates upward pressure — commonly known as a short squeeze. - ETF Inflows
Bitcoin and Ethereum ETFs continue to experience inflows. When capital enters ETFs, asset managers must purchase underlying crypto assets, which can contribute to price increases. - Broader Market Optimism
Stock futures, particularly the NASDAQ, are also trending upward. Risk-on sentiment across financial markets often spills into crypto. - Institutional Trading Activity
There are discussions online regarding large trading firms and algorithmic activity influencing market timing. However, these claims remain speculative and should be treated cautiously unless backed by regulatory findings.
Why Do Markets React So Quickly?
Crypto markets are highly sentiment-driven. News — whether verified or rumored — spreads rapidly across social media platforms.
Unlike traditional markets, crypto trades 24/7. This constant liquidity allows price reactions to occur almost instantly.
Sometimes markets “buy the rumor.” Sometimes they “sell the news.”
A Word of Caution
Rapid price movements create excitement. But volatility works both ways.
A 5% move upward can quickly reverse. Smart participants focus on:
- Risk management
- Position sizing
- Diversification
- Verified information
How Do Traders Try to Capitalize on Moves?
There are generally three approaches participants use:
- Long-term investing – Holding assets based on conviction in technology or adoption.
- Trading – Buying and selling based on technical indicators and momentum.
- Passive exposure – Through ETFs or diversified portfolios.
No strategy guarantees profits. Education and discipline matter far more than hype.
Final Thoughts
The crypto market is moving up. That’s a fact.
But the reasons are more complex than a viral headline.
Short liquidations, ETF flows, broader market optimism, and speculation all appear to be contributing factors.
Before acting on any market movement, verify the information, assess the risks, and remember that volatility is part of the crypto ecosystem.