Milli—Active buying and selling can make sense—but capital gains taxes make the picture a lot more complicated. For US citizens, short-term capital gains (e.g. from selling crypto that you’ve held for less than 12 months) are taxed at a MUCH higher rate (up to 37% tax rate) than long-term capital gains (e.g. from selling crypto held for more than 12 months) (up to 20% tax rate, but it really maxxes out around 15% for most middle-class investors with cap gains less than half a million $USD a year).
Anybody who’s already been actively trading crypto tokens in the last few months of this bear market might as well keep trading, e.g. selling whatever you think will drop even more. But anybody who’s been holding tokens for more than 12 months, and who’s already facing 80% losses (on paper) should NOT necessarily sell on another slight drop—because it would reset the capital gains tax clock on those assets.
Epistemic status: I’m not a financial advisor, crypto expert, or tax expert; just an amateur crypto investor; I’m just pointing out that the tax situation (in the US, but also in most other countries) complicates any simple expected-value analysis of trading advice for retail investors.
Milli—Active buying and selling can make sense—but capital gains taxes make the picture a lot more complicated. For US citizens, short-term capital gains (e.g. from selling crypto that you’ve held for less than 12 months) are taxed at a MUCH higher rate (up to 37% tax rate) than long-term capital gains (e.g. from selling crypto held for more than 12 months) (up to 20% tax rate, but it really maxxes out around 15% for most middle-class investors with cap gains less than half a million $USD a year).
Anybody who’s already been actively trading crypto tokens in the last few months of this bear market might as well keep trading, e.g. selling whatever you think will drop even more. But anybody who’s been holding tokens for more than 12 months, and who’s already facing 80% losses (on paper) should NOT necessarily sell on another slight drop—because it would reset the capital gains tax clock on those assets.
Epistemic status: I’m not a financial advisor, crypto expert, or tax expert; just an amateur crypto investor; I’m just pointing out that the tax situation (in the US, but also in most other countries) complicates any simple expected-value analysis of trading advice for retail investors.