Statistics Show That Americans Lost Over $1.7 Billion In BTC Trading In 2018 Alone


The year 2018 was bloody for cryptocurrencies. After investors rushed into the market to benefit from the 2017 end of year bull rally, they met the shock of a decade as prices crashed significantly against the USD. Imagine how an individual who bought Bitcoin when it was as high as $19,500 would feel now that the largest cryptocurrency per market capitalization is trading as low as $3550. Many were able to sell-off when the price was at $10000 but the lose was still significant. Asians and Americans showed the greatest interest for cryptocurrencies. This is why they suffered the highest loss.


Credit Karma Claims Americans Lost $1.7 Billion In BTC Trading


According to the reports from Credit Karma, Americans lost over $1.7 billion in cryptocurrency trading during the crypto winter of 2018. What’s more, they unknowingly lost $5 billion in tax deductions. The general manager at Credit Karma, Jagjit Chawla said:


“Some Americans who sold their bitcoins at a loss don’t know that they are eligible for tax deductions. About 61% of the respondents during our study had no idea they could get tax deductions. 58% out of the 61% said they will most likely claim the deduction now that they are aware of its existence.”


In 2018, many traders were not willing to file their cryptocurrency tax data parallels. Only about 100 out of the 250,000 tax filings admitted that they made money from trading cryptocurrencies. After Bitcoin fell by more than 70%, the story changed. The entire market lost up to $700 billion in capitalization leaving some startups bankrupt. Tax deductions present the perfect opportunity for those who declared their assets in 2017 to get deductions now.


The report showed that some individuals have not taken advantage of this tax deduction because they believe their losses and gains are either too small to make any difference. Some others said they had no idea they were required to declare their cryptocurrency earnings while filing. Some who filed said they did not know how to request for tax deduction. A cryptocurrency tax specialist, Gary LaRoy said:

“I believe the main problem here is ignorance of the law and ignorance of the tax industry. The average American tax accountant has no idea what tax deduction for cryptocurrency losses are. So, how can they provide clients with the right services?”


Chawla believes that education regarding taxation in the cryptocurrency industry is a major issue. Many people don’t know the penalty of not declaring their cryptocurrency gains and losses. This is something that needs to be addressed.


Bitcoin (BTC) Price Today – BTC / USD
Name Price24H (%)
Bitcoin (BTC)
$5,274.00
1.20%


LaRoy stated that he has recommended that his clients do tax harvesting. He asked his cryptocurrency investors to sell their assets at a loss and recoup from tax deduction. The next year, the investor will purchase the cryptocurrency again. This method would have been effective if gains weren’t so hard to get in 2018. Keep in mind that the cryptocurrency industry wasn’t the only one that suffered. The traditional stock market also suffered a decline.


If you lost money during the cryptocurrency winter, would you file for a tax deduction to recoup some of those losses? Share your thoughts.

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