Remember, there’s still no tax loss harvesting rule in crypto (US). Here’s a chance to put money back into your pocket.

If for instance you bought 1 Bitcoin at $60k, you can still sell at $55k for example, then buy it right back at about $55k.

You’ll still have 1 Bitcoin, and seemingly no real changes to your position.

But you’ll now have a -$5k capital loss on your taxes.

If Bitcoin were to bounce back to $65k, and you were to sell it at $65k with a +$5k gain, your previous capital loss would offset that.

This is based on US rules. Of course there’s gonna be more factors involving the rest of your taxes, so additional rules and restrictions may apply for different situations.

Keep in mind you would also reset the acquisition timeline, so you could reset yourself for short term gains. If you want the long term discount, you’ll have to wait another year to sell.

Edit: *Wash sales rule to be exact.