Bitcoin's slide drives tax-loss harvesting

Investors can offset equity gains by selling loss-making positions in cryptocurrency

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Bitcoin’s 30 per cent slide from its all-time high is creating conditions financial advisers say are likely driving more tax-loss harvesting in digital assets than in previous years.

While the world’s largest cryptocurrency by market value is down 5 per cent year-to-date, the equity benchmark S&P 500 has gained roughly 18 per cent in the same time period. This divergence gives investors holding both assets a clear incentive: Sell underwater cryptocurrency positions to offset their stock gains before December 31, especially those who bought the digital asset near its October peak.