The IRS issued new regulations in December 2025.

This new regulation has 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 read 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 even use tanks to collect taxes—it's quite domineering.

Activities that 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 aim to legalize and tax them. Otherwise, the government has no incentive to do so. Now, this has been confirmed. It was also said that taxing would lead to selling pressure, as gray and black markets tend to escape. At that time, I didn’t expect the IRS to allow losses to be deducted.

What does this mean specifically? For example, if you bought a Bitcoin for 100,000 and sold it for 90,000, you lost 10,000. This 10,000 can be deducted for taxes. If you don’t use the full deduction, say you deduct 4,000, then the remaining 6,000 can be carried over and deducted next time.

Many people will plan their taxes carefully before selling and deducting, leaving some remaining. For example, in the previous case, although there was a 10,000 loss, they could buy back Bitcoin at 70,000 or 80,000, as the price rises and profits are made. The profit portion is taxable, but they can use the unused deduction from before.

The regulation will be implemented in December, which takes time. The market won’t crash immediately, and it also explains why, even when the price exceeds 80,000 and ETF institutions are still selling, similar to 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 scam coin that goes to zero, and then sell it, losing everything, they can still deduct the loss for taxes. Would they sell scam coins?! Or wait for the scam season to surge back to break even?!