US Crypto Traders lost $1.7 Billion in 2018, Majority Unaware They Can Claim a Tax Deduction


US bitcoin and crypto investors realized that losses in 2018 are approximately $1.7 billion, the latest Credit Karma’s research shows.

On the other hand, the unrealized losses are around $5.7 billion, as many US-based traders have not sold their bitcoins yet. On average, each trader has lost around $718.

The survey, commissioned by Credit Karma, was conducted by Qualtrics in November 2018 in the US. It involved 1,009 bitcoin investors, aged 18 or older.

Gains and losses

As Credit Karma is a company focused on personal and family finances, the research also touched upon other elements of finance.

For instance, more than a third (33%) of all respondents who registered losses when selling their bitcoins don’t plan to report it on their taxes.

The breakdown shows that 55% won’t report because of “how little they gained or lost”, while 35% believe that they “didn’t believe they had a requirement”, and 22% said they “don’t know how”  to report gains or losses on their taxes.

As expected, those who made profits are more likely to report their gains than investors who recorded losses. Here, the margin is quite big – 59% towards 38% in favor of those who do plan on reporting it.

And that’s where the catch is. More than half of all investors (58%) are not aware they could claim a tax deduction for their realized bitcoin losses, which is quite striking. The percentage is even higher (61%) when we look at those who sold their bitcoins at a loss.

Tax deduction

That leads us to another interesting category. Once told they are entitled to a tax deduction, around 58% of traders with realized gains, and 53% with realized losses, said they are more likely to report it on their taxes, now that they are more familiar with the rules and regulations.

Apart from the useful data, this research is another example of the need to invest more resources in educating the public on trading and investing in crypto. By informing them about their obligations and duties, as well as their rights, it would help save them a great deal of trouble with the authorities, and some dollars as well.

Make sure you read the Credit Karma report as it contains useful tips about reporting bitcoin gains and losses.