Why are so many selling at the end of the year?
It's because the Wash Sale rule will start applying to Crypto in 2022. Many are locking in capital losses before this goes into effect
What is the Wash-Sale Rule?
The Wash-Sale rule is a new rule which is applying in the cryptocurrency space from 2022. The rule states that, if an investment is sold at a loss and then repurchased within 30 days, the initial loss cannot be claimed for tax purposes. In order to comply with the Wash-Sale Rule, investors must therefore wait at least 31 days before repurchasing the same investment. Importantly, investors must note that, even if the securities they repurchase are not identical to the ones which they sold, they might be deemed to be “substantially identical” if the two securities are sufficiently similar. When in doubt, investors wishing to comply with the Wash-Sale Rule should consult with an appropriate tax adviser or other qualified professional
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