2025 has been an incredible year for crypto investors—Bitcoin even hit new all-time highs!

But big profits often come with a not-so-fun side effect: big tax bills.

Before we go any further, here’s the key rule to remember:

👉 You only trigger taxes when you sell your crypto or use it to make purchases.

Now, back to the important part—your gains this year could lead to higher taxes. The good news? You still have time to put smart strategies in place before year-end to reduce both your 2025 crypto taxes and your future crypto taxes.

Step Up Your Tax Basis with Tax-Gain Harvesting

If you expect to earn more income next year and you believe your crypto will continue to rise in value, tax-gain harvesting may be a smart move.

Here’s how it works:

1. You sell your crypto now and recognize the gain.

2. You immediately buy it back at the current market price.

3. Your new tax basis becomes the higher repurchase price.

This can significantly reduce future taxable gains.

💡 Example

You bought 1 Bitcoin for $20,000 three years ago. Today it’s worth $110,000.You sell it now and recognize a $90,000 long-term capital gain, taxed at your 15% rate.Then, you immediately repurchase that same Bitcoin at $110,000.

Your new tax basis is $110,000.

If Bitcoin hits $140,000 next year (or later), your taxable gain would only be $30,000—not the full $120,000 you’d owe without tax-gain harvesting.

⚠️ A quick reminder:

If you’ve held your crypto for less than one year, your profit is taxed at ordinary income rates, not long-term capital gains rates