Japanese Bitcoin Treasury Firms Keep Beating BTC

Japanese Bitcoin Treasury firms are consistently outperforming their U.S. counterparts due to advantageous tax policies. In Japan, Digital Asset Treasury (DAT) companies benefit from a tax framework that favors equities over crypto assets, leading to higher valuations for companies holding Bitcoin. Profits from crypto in Japan are taxed as miscellaneous income at progressive rates, while equity gains are taxed at around 20%, with further advantages like loss carryforwards. This disparity encourages investors to favor stocks of firms with Bitcoin holdings, avoiding the steep tax implications of direct crypto investments. Conversely, U.S. firms face a neutral tax environment, causing their stock prices to align closely with Bitcoin prices. Recently, Japanese regulators have expressed concerns over the volatility tied to these assets, suggesting possible future changes in tax treatment that could diminish DATs' appeal. If the tax benefits are removed, similar advice to invest in an ETF as seen in the U.S. may resonate in Japan as well.

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