Why is Bitcoin struggling to rebound? Bloomberg: Price Pullback of 30%, Year-End Presents Rare "Tax Loss Harvesting" Opportunity

According to Bloomberg, Bitcoin has already fallen about 30% from its all-time high of approximately $126,000 set in October 2025. The price hovers around $88,000 to $89,000. This sharp decline presents a rare year-end tax-loss harvesting opportunity for investors.
(Background: Is the US dollar’s status wavering? Analysts: Gold and silver are expected to continue rising in 2026, and Bitcoin may see a rebound rally.)
(Additional context: Volatility warning — The largest options expiration in history, worth $27 billion, is triggering today, causing Bitcoin to briefly dip below $87,000.)

According to Bloomberg, Bitcoin has already fallen about 30% from its all-time high of approximately $126,000 set in October 2025. The price hovers around $88,000 to $89,000. This sharp decline presents a rare year-end tax-loss harvesting opportunity for investors. Several financial advisors note that this year’s digital asset tax-loss harvesting activities are expected to be significantly higher than in previous years, especially before the year-end tax deadline.

What is tax-loss harvesting?

Tax-loss harvesting is a common tax optimization strategy where investors intentionally sell assets at a loss to realize capital losses, which can then be used to offset gains from other investments (such as stocks), ultimately reducing their tax liability for the year. Under US tax law, capital losses can fully offset capital gains, and up to $3,000 of ordinary income can be deducted annually. Any excess losses can be carried forward to future years.

Unlike traditional stocks, cryptocurrencies are currently not subject to the “wash sale rule,” allowing investors to repurchase the same asset immediately after selling at a loss without losing the ability to claim the loss deduction.

Why is this year particularly notable?

Firstly, although Bitcoin’s performance for the year has only declined about 5%, it has fallen sharply by 30% from its October high, causing many investors who bought at the high to realize unrealized losses. In contrast, traditional stock markets like the S&P 500 have risen about 18% for the year, leaving many investors with profitable stocks who need losses to offset their tax bills. This creates a perfect tax-loss harvesting opportunity, making Bitcoin an ideal target.

Secondly, several financial advisors have observed a significant increase in clients’ interest in tax-loss strategies involving cryptocurrencies this year, mainly because stock market gains have been substantial, prompting investors to seek loss assets to balance their tax positions. Recently, Bitcoin ETFs have experienced continuous outflows, which analysts attribute to tax-loss selling pressure. Such selling often intensifies market volatility at year-end, but historical experience shows this is usually temporary, with a rebound wave often occurring after the new year. Therefore, Bitcoin’s price may rebound in early next year.