The IRS issued new regulations in December 2025. These new rules have a significant impact on the crypto industry, making it easier to dump coins. During today’s live broadcast, a student mentioned this, and I took a closer look at the regulation, also reading it aloud during the stream. Here is a summary for everyone’s reference.

The main point is that cryptocurrencies are classified as property. Losses from selling cryptocurrencies can be deducted without limit for tax purposes. The US tax system is very strict; they enforce taxes with tanks—it's that domineering. The following activities are taxable:
1. Selling cryptocurrencies for fiat currency ( such as USD )
2. Exchanging one cryptocurrency for another
3. Using cryptocurrencies to purchase goods or services
4. Income from mining, staking, airdrops, etc. ( is considered ordinary income )

Last year, including 2024, it was mentioned that various US cryptocurrency laws were passed; legalization is primarily for taxation purposes. Otherwise, the government has no incentive to do this. Now, it has been confirmed, and at that time, it was said that taxation would lead to selling pressure, as gray and black markets would seek to escape. I didn’t expect that the IRS would allow losses to be deducted. What does this mean exactly? For example, if you bought a Bitcoin at 100,000 and sold it at 90,000, you lost 10,000. That 10,000 can be deducted for taxes. If you don’t use the full deduction, say you deduct 4,000, the remaining 6,000 can be carried over for next time. Many people will calculate their tax rate to sell, deduct, and use the remaining allowance. For instance, in the previous example, although you lost 10,000, you could buy back at 70,000 or 80,000 when the price rises, making a profit. The profit portion is taxable, but you can offset it with the unused deduction from before. It will take some time to implement after the December release, so there won’t be an immediate crash. This also explains why, when the price reached over 80,000, ETF institutions kept selling—just like why the ETF approval on January 11, 2024, caused a sharp drop. It’s all driven by interests.

To be extreme, if they buy a clone coin that goes to zero and they sell it, losing everything, they can still deduct the loss for taxes. Would they sell clone coins?! Or wait for the clone season to surge back to break even?!