Tax planning.

Yes, cryptocurrency losses are tax deductible. This question is timely near year end as clients tend to focus on tax-loss harvesting opportunities.

Tax-loss harvesting is the process of offsetting your gains with losses to try and minimize your tax liability.

To put this in perspective, if you have $100,000 in gains and you have $100,000 in losses in crypto you should sell your crypto to bring your tax liability down to $0.

Bottom Line: Anytime you hold a loss in cryptocurrency, it’s in your interest to sell up to the extent that you have gains elsewhere.