The U.S. Supreme Court is set to issue a landmark ruling this Wednesday that will directly determine the tax status of cryptocurrencies. This decision could redefine the rules of the entire industry.

There are three possible outcomes of this ruling, each capable of triggering different market reactions. First, if the court determines that crypto assets are classified as commodities, the tax burden on holders will significantly increase, and the tax avoidance opportunities previously available to institutional investors will disappear. Second, if they are classified as currencies, the compliance costs for exchanges will drop substantially, which is undoubtedly good news for these platforms. The third possibility is a mixed classification, which would lead to a more complex and unpredictable outcome.

Regardless of which scenario unfolds, market reactions are unlikely to be mild. Some may hurriedly sell off their positions out of concern, while others may seize the opportunity to quietly build positions. On high-frequency trading public chains like Ethereum and Solana, volatility could even surpass that of Bitcoin.

There are several details to pay special attention to. The ruling text may contain specific clauses, such as applying only to U.S. taxpayers, with different provisions for overseas investors. Sometimes, the market may react inversely, with negative news accelerating sell-offs, making it especially important to set stop-loss orders in advance. More importantly, the chain reaction of regulatory changes should be closely monitored—once the U.S. establishes a new regulatory framework, the EU is likely to quickly follow with discussions on corresponding legislation.