Bitcoin slump creates unusual U.S. tax advantage, Bloomberg say

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Yaroslav Dmytrenko

29.12.2025

Bitcoin slump creates unusual U.S. tax advantage, Bloomberg say — Investors use crypto losses to offset stock gains before deadline

Bitcoin’s decline is creating an unusual opportunity for tax benefits, Bloomberg reports. A roughly 30% drop from its all-time high near the end of the year is, according to financial advisers, giving investors a chance to use tax losses to their advantage.

While the world’s largest cryptocurrency by market capitalization is down about 5% year-to-date, the S&P 500 index has risen roughly 18% over the same period. This divergence gives investors holding both assets a clear incentive: sell losing crypto positions to offset stock gains before December 31.

This approach is most effective for those who bought Bitcoin and other digital assets near their October peak.

“Using crypto tax losses is viewed as part of a broader tax strategy — especially in a year of strong stock-market gains — rather than a standalone tactic,” said Tom Geoghegan, certified financial planner and founder of Beacon Hill Private Wealth in Summit, New Jersey.

In traditional tax-loss harvesting, an investor sells an asset at a loss and uses that loss to reduce taxable income. If losses exceed gains, up to $3,000 may be deducted from ordinary income each year, with any remaining losses carried forward. Result: lower taxes.

This strategy can be easier with crypto than with stocks. The IRS “wash-sale rule” requires stock investors to wait 31 days before repurchasing shares sold at a loss; otherwise, the deduction is denied.But cryptocurrencies, classified by the IRS as property rather than securities, are not subject to this restriction. Crypto ETFs, however, are treated differently because they are considered securities.

“You can sell Bitcoin, buy it back the same day, and it won’t trigger the wash-sale rule,” said Robert Persichitte, CPA and certified financial planner at Delagify Financial near Denver.

Simply put: if your stocks gained $10,000, you may owe $2,000–$3,000 in tax. But if you sell BTC at a $10,000 loss, that loss offsets the gains — effectively eliminating the tax — while you can immediately buy Bitcoin back. The asset stays, the tax disappears.

Crypto becomes part of broader strategy

Some advisers note that crypto investors are approaching tax-loss harvesting more thoughtfully than in prior years. Geoghegan said that while the mechanics haven’t changed, clients are increasingly integrating crypto investments into their broader tax planning.

“In some cases, clients quickly realize losses and then restore their positions; in others, they use harvested losses to offset gains elsewhere, such as in stocks or private investments, instead of viewing crypto in isolation,” he noted, adding that clients this year are “more deliberate and informed.”

Whether Bitcoin will experience a January rebound in 2026 remains uncertain. Research by Kong shows crypto did not exhibit a classic “January effect” until the IRS tightened oversight in 2018. Oversight is expected to increase further: beginning in 2026, exchanges and brokers must report gross proceeds from crypto sales to the IRS using the new 1099-DA form.

As we wrote, Bitcoin price prediction: BTC jumps 2.8% as prolonged outflows drain selling pressure

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