Daines Unveils Crypto Tax Bill as Bitcoin ETFs Snap Nine-Day Inflow Streak

Washington and Wall Street delivered two distinct crypto stories on Wednesday, and together they capture the mood of the US market at the start of October. In the Senate, Republican lawmakers introduced a sweeping tax bill for digital assets. In the markets, spot Bitcoin exchange-traded funds recorded their first net outflow after nine straight days of inflows.

Senate Republicans Turn Their Attention to Crypto Taxes

Senator Steve Daines of Montana introduced the ADAPT Act on Wednesday, a bill he says would bring clearer tax rules for stablecoins, network fees, staking and lending. Senate Banking Committee Chair Tim Scott, Cynthia Lummis and Bernie Moreno are listed as co-sponsors, although Politico reported that no Democrat has signed on so far.

The timing matters. The proposal arrives about two weeks after the Digital Asset Market Clarity Act failed to clear a procedural vote in the Senate on September 15, falling short of the 60 votes needed to advance. With the broader market structure bill stalled, the ADAPT Act appears to be an attempt to keep legislative momentum alive on a narrower piece of the puzzle.

What the ADAPT Act Would Change

According to reports on the bill's text, the proposal would:

• Exempt small gains or losses on dollar-pegged stablecoins regulated under the GENIUS Act
• Exempt crypto transactions involving a fee of $10 or less
• Exclude income from qualifying passive staking
• Remove digital asset lending from taxation
• Extend wash-sale and constructive-sale rules to digital assets and simplify the tax treatment of charitable crypto donations

The wash-sale provision is likely to draw the most attention from active traders. It would close the gap that lets investors sell a coin at a loss and immediately buy it back while still claiming the deduction.

Bitcoin ETFs Break a Nine-Day Inflow Run

On the market side, US spot Bitcoin ETFs saw net outflows of $149 million on Wednesday, according to SoSoValue data. That ended nine consecutive sessions of inflows. Cumulative net inflows since launch stand near $58 billion, with total net assets around $108 billion.

Bitcoin traded near $83,450 on Thursday, moving between support around $82,500 and resistance at $85,000. The Fear & Greed Index remained in Greed territory. One day of outflows does not make a trend, but analysts note that repeated withdrawals would point to buyer exhaustion.

Ether and XRP Funds Show the Same Caution

Spot Ether ETFs lost $60 million on Wednesday after small outflows of $3 million on Tuesday. ETH stayed below $2,700, with $2,600 acting as the nearest support. US-listed XRP ETFs were quiet over the past two sessions after five straight days of inflows, while XRP slipped below $1.50, down from September highs near $1.66.

Why the Two Stories Are Connected

Both developments point to the same theme: institutional money is already in the market, while the legal framework is still being assembled piece by piece. Bitwise Chief Investment Officer Matt Hougan argued on Wednesday that the market has rallied since the CLARITY Act's failure, with Bitcoin up about 8% and Ether about 7%. In his view, the bill's collapse freed regulators to move faster on their own rules. SEC Chair Paul Atkins has likewise said the agency will keep working on clearer onchain fundraising rules with or without legislation.

What to Watch Next

Traders will be watching whether ETF flows return to positive territory and whether Bitcoin can hold support near $82,500. In Congress, the key question is whether the ADAPT Act attracts any Democratic backing or remains a Republican-only proposal.