The crypto crash has left a lot of portfolios deep in the red. $Bitcoin is down about 25% since January, $Ethereum about 38%, and many altcoins have lost even more. There is one small upside to that pain: in many countries, crypto losses can lower your tax bill.
The strategy is called tax loss harvesting, and the end of the year is when it matters most. Here is how crypto tax loss harvesting works in Germany, the US and the UK, what has changed in 2026, and the mistakes that can cost you the benefit.
What is crypto tax loss harvesting?
Tax loss harvesting means selling a coin that trades below your purchase price to turn a paper loss into a realized loss. That realized loss can then offset taxable gains you made elsewhere in the same year, so you pay tax on a smaller amount.
A loss on paper does nothing for your taxes. Only a sale (or a swap into another coin or a stablecoin, which most tax authorities also treat as a sale) makes it count. Many investors then buy the coin back to keep their position. Whether that is allowed depends on where you...
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