According to Bloomberg, Bitcoin has fallen about 30% from its all-time high, creating an unusual tax manipulation opportunity. A number of financial advisers said that there may be significantly more tax-loss harvesting (tax-loss) activity on digital assets this year than in previous years.
As of now, Bitcoin is still down about 5% during the year, while the S&P Index is up about 18% over the same period. This significant differentiation has given investors who hold stocks and crypto assets at the same time a strong incentive: sell losing Bitcoin positions before the end of the year to offset capital gains from Stocks investments, especially those who Buy Bitcoin at a high level in October.
Note: Tax loss harvesting means investors confirm losses by Sell floating assets to offset profits from other assets, thereby reducing capital gains tax payable. Against the backdrop of a rise in the stock market and a pullback in crypto assets, this strategy is receiving renewed market attention.