A bipartisan group of lawmakers has renewed its push to apply wash-sale rules to bitcoin, ether, and other digital assets, according to CNBC. Right now, crypto investors can sell at a loss, immediately rebuy the same position, and still claim the tax deduction. That move is illegal for stocks and bonds. The proposal would align crypto tax treatment with traditional securities.
This loophole makes tax-loss harvesting trivial in a volatile market. Close it, and crypto traders lose one of their easiest year-end tax games. Fewer artificial selling waves built around paper losses means less predictable market moves and less subsidy for the most active traders. For the IRS, it's real revenue.
Bitcoin is down roughly 50% from October 2025 highs, so plenty of investors still want losses locked in before year-end. Whether this passes depends on whether it gets bundled into a broader tax package. Niche provisions often survive or die based on political momentum, not merit.
Crypto spent years demanding Wall Street credibility. Serious assets get serious rules. This loophole was never a principled distinction. It was regulatory lag, a gift that shouldn't have existed. Markets work better when Congress stops subsidizing the most convenient paper losses in the room.
Filed to the Markets desk · Jul 28