The volatility of crypto is nerve-wracking and may continue for some time. Crypto-related businesses and investors may be less excited about the turmoil than before. There will likely be large tax losses due to the collapse of the crypto market. Not necessarily. You might be able to make some lemonade from your losses in taxes, as you watch your dollars move around the digital world.

Consider what the tax implications are. If you’ve been trading and triggering big taxable gains, but then the floor drops out, first consider whether you can pay your taxes for the gains you have already triggered this year. Except where you are legally permitted to choose otherwise, tax rates are generally annual. The transaction will be taxable if it is a sale or exchange of cryptocurrency for cash or another cryptocurrency.