Tax-Loss Harvesting in Crypto: A Significant and Underexplored Opportunity for Financial Advisors

San Francisco • October 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.

Note: 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.

About Bitwise

Bitwise Asset Management is the largest crypto index fund manager in America. Thousands of financial advisors, family offices, and institutional investors partner with Bitwise to understand and access the opportunities in crypto. For six years, Bitwise has established a track record of excellence managing a broad suite of index and active solutions across ETFs, separately managed accounts, private funds, and hedge fund strategies. Bitwise is known for providing unparalleled client support through expert research and commentary, its nationwide client team of crypto specialists, and its deep access to the crypto ecosystem. The Bitwise team of more than 60 professionals combines expertise in technology and asset management with backgrounds including BlackRock, Millennium,, Meta, Google, and the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and has been profiled in Institutional Investor, Barron’s, Bloomberg, and The Wall Street Journal. It has offices in San Francisco and New York. For more information, visit

  • Matt Hougan

    Matt Hougan

    Chief Investment Officer
  • Gayatri Choudhury

    Senior Quantitative Research Analyst
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