German Tax Law Triggers Fresh Holding Period for Re-purchased Bitcoin

A recent slide in cryptocurrency prices has prompted many investors to consider selling their Bitcoin at a loss and buying it back shortly afterwards. In Germany, this strategy triggers two effects: the loss is realized and remains deductible, while the one-year holding period starts again from scratch for the newly acquired units.

The acquisition date of the new units determines when the fresh one-year period begins. If an investor sells 0.3 Bitcoin today that they bought in January 2026, and buys 0.3 Bitcoin again ten minutes later, they have a new position with a new acquisition date. The old eight months of holding time are not transferable; they were used up by the sale.

Under German tax law, crypto assets count as other economic assets, subject to private disposal transactions in section 23 of the Income Tax Act. A private disposal transaction is a sale within one year of acquisition, taxed at the investor's personal income tax rate. If an investor sells after the year has elapsed, they stay tax-free, but the loss is equally without effect.

The decision to sell and rebuy depends on whether it is worth more to take the loss today or preserve the remaining holding time. For a lot that is only two months old, the answer is usually clear: ten months of remaining period is manageable, and the loss takes effect immediately. However, for a lot that is eleven months old, the picture flips: one month separates it from tax exemption, and a buyback resets it to twelve months.