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The Italian government has proposed hiking capital gains tax on Bitcoin and other cryptocurrency profits to 42% from 26% in a move that shocked local investors.&nbsp;
The government announced the tax hike as a part of its 2025 budget proposal to generate extra revenue to support public services. Deputy Minister Maurizio Leo told a press conference that it is needed to address the country’s budget shortfalls.
<h2 id="b-crypto-capital-gains-tax-would-be-one-of-the-highest-in-europe-b">Crypto Capital Gains Tax Would Be One Of The Highest In Europe</h2>
If implemented, the tax would be one of the highest in Europe on crypto profits, and it prompted harsh criticism from the community on social media platforms.
“It’s a death move to increase taxes as that only serves to detract wealth and new ideas,” said macro trader and investor Jason Pizzino on X. “Italy is a dying state.”
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Italy is a dying state. It's a beautiful IRL museum to visit as a tourist. Note that I am an Italian citizen. I love the place. But no one cares if they raise taxes on Bitcoin because the nett wealth is leaving Italy not going to it. It's a death move to increase taxes as that… <a href="https://t.co/9PCir8uvRq" rel="noopener noreferrer nofollow">https://t.co/9PCir8uvRq</a>
 — Jason Pizzino 🌞 (@jasonpizzino) <a href="https://twitter.com/jasonpizzino/status/1846697381410361720?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">October 16, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Data from on-chain analytics firm <a href="https://app.santiment.net/" rel="noopener noreferrer nofollow">Santiment</a> shows the social volume for the key words “Italy” and “tax” spiked to monthly highs as crypto users, especially those living in Italy, expressed their concerns about the proposal.
<img decoding="async" class="aligncenter wp-image-588217 size-full" src="https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY.jpeg" alt="" width="2548" height="1332" srcset="https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY.jpeg 2548w, https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY-300x157.jpeg 300w, https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY-1024x535.jpeg 1024w, https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY-768x401.jpeg 768w, https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY-1536x803.jpeg 1536w, https://insidebitcoins.com/wp-content/uploads/2024/10/GaDbseSXgAA_NCY-2048x1071.jpeg 2048w" sizes="(max-width: 2548px) 100vw, 2548px">
Still, previous attempts by other countries to tax cryptocurrency gains have often failed to boost government revenues. When India introduced a digital-asset tax a couple of years ago, local trading volumes collapsed as investors moved to offshore platforms.
<h2 id="b-bitcoin-price-faces-bearish-sentiment-in-italy-b">Bitcoin Price Faces Bearish Sentiment In Italy</h2>
Data from Santiment also shows bearish sentiment flooded the crypto space in response to Italy’s new tax proposal. Social volume for terms like “Italy+sell”, “Italy +selling”, Italy+sold”, or “Italy+bearish” skyrocketed.&nbsp;
<img decoding="async" class="aligncenter wp-image-588215 size-full" src="https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238.png" alt="" width="2548" height="1399" srcset="https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238.png 2548w, https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238-300x165.png 300w, https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238-1024x562.png 1024w, https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238-768x422.png 768w, https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238-1536x843.png 1536w, https://insidebitcoins.com/wp-content/uploads/2024/10/0c0eff43331233b535c02b95e21b576c3e33c1a097adcf531c13cf02ac7e2c68_1729125938966_Screenshot-2024-10-16-173238-2048x1124.png 2048w" sizes="(max-width: 2548px) 100vw, 2548px">
Despite that, the Bitcoin price was largely unaffected. As of 04:06 a.m. ET, BTC is trading at $67,379, down about a third of a percent in the last 24 hours, according to <a href="https://www.coingecko.com/en/coins/bitcoin" rel="noopener noreferrer nofollow">CoinGecko</a>.&nbsp;
 The proposal awaits parliamentary approval before it can become law.&nbsp;&nbsp;
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Italy To Hammer Bitcoin Profits By Hiking Capital Gains Tax On Cryptocurrencies To 42%

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