Tax-Loss Harvesting in Crypto: A Significant and Underexplored Opportunity for Financial Advisors
San Francisco • Oct 5, 2022
The crypto market correction of 2022 has potentially created significant tax-loss harvesting opportunities for investors.
In this white paper, we comprehensively outline why investors may have a significant opportunity to boost after-tax returns by applying tax-loss harvesting strategies to their crypto investments. The report starts with a high-level introduction to tax-loss harvesting and then moves on to show how the return and volatility profile of crypto assets make them uniquely well-positioned to benefit from such a strategy. The paper also describes the current status of tax regulations around tax-loss harvesting in crypto, including how the so-called “wash-sale rule” may apply to the crypto market.
READ WHITE PAPERNote: Tax-loss harvesting involves risks. These include, but are not limited to, the possibility that the strategy might result in a negative return contribution and unintended tax consequences. No information in this report is tax advice: The simulations contained herein are intended for illustrative and educational purposes only and those considering implementing a tax-loss harvesting strategy are strongly recommended to consult with a tax advisor. Past performance is not indicative of future results.
Bitwise Asset Management is a global crypto asset manager with more than $15 billion in client assets and a suite of over 30 investment products spanning ETFs, separately managed accounts, private funds, hedge fund strategies, and staking. The firm has an eight-year track record and today serves more than 4,000 private wealth teams, RIAs, family offices and institutional investors as well as 15 banks and broker-dealers. The Bitwise team of over 125 technology and investment professionals is backed by leading institutional investors and has offices in San Francisco, New York, and London.
