Bloomberg: Bitcoin's 30% Drop Creates a Unique "Tax Loophole" for US Investors

A 30% decline in Bitcoin's price from its all-time high has created ideal conditions for the so-called "tax-loss harvesting." According to Bloomberg, American investors are actively using the cryptocurrency dip to legally reduce taxes on capital gains from the stock market.
Market Paradox
The situation at the end of 2025 is unique:

Stock Market: The S&P 500 index has risen approximately 18% since the beginning of the year.
Cryptocurrency: Despite autumn records, Bitcoin shows a 5% decline (and a 30% drop from its peak) for the year.
This discrepancy gives investors a clear incentive: to sell losing positions in cryptocurrency before December 31 to offset tax liabilities arising from stock gains.

What is the "trick"?
In the US, there is a "wash sale" rule that prohibits investors from claiming a tax deduction if they sell a security at a loss and buy the same (or identical) one within 30 days.

However, as Bloomberg explains, this rule does not apply to Bitcoin. The US IRS (IRS) classifies cryptocurrency as property, not as securities.

How it works in practice:

The investor sells Bitcoin, realizing a loss.
This loss "dollar-for-dollar" offsets the capital gains tax.
The investor immediately (in the same trading session) repurchases Bitcoin, restoring their portfolio.
"You can sell this Bitcoin, buy it back the same day, and it won't trigger any restrictions," explains Robert Persichetti, a certified accountant.

Why is everyone doing this now?
Cornell University finance professor Will Kong notes that the lack of a 30-day waiting period leads to such transactions concentrating in the last days of the year.

"The absence of restrictions on wash sales facilitates instant 'sell and repurchase' operations, so activity is focused around the most tax-relevant dates," says Kong.

Financial advisors also note that this year, clients are acting more consciously. Tom Geoghegan of Beacon Hill Private Wealth mentions that "loss harvesting" in cryptocurrency is no longer viewed as a separate tactic but has become part of an overall tax strategy amid a strong year for stocks.