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Why a holding period? 14 reasons why preserving the holding period for crypto and Bitcoin is important.
Reasons why the tax holding period must be maintained
The one-year tax holding period for cryptocurrencies is not a “tax loophole,” but a deliberately created legal framework for long-term investment in digital assets.
Abolishing this regulation would have far-reaching negative consequences—for private savers, companies, innovation, and Germany as a business location as a whole.
Below, we have compiled the most important arguments for maintaining the holding period.
Protection of trust for long-term Bitcoin and crypto investors
Many Bitcoin and crypto investors invested years ago—at a time when cryptocurrencies were still largely ridiculed socially and politically. They consciously took high risks and made their investment decisions based on the legal situation at the time. This included the clear tax regulation that profits are tax-free after a holding period of one year.
Anyone wishing to tighten the tax framework retroactively or after the fact today undermines confidence in the reliability of political decisions. Long-term investments require stable rules. If citizens must expect at any time that the state will re-evaluate successful developments for tax purposes in hindsight, it damages trust in Germany as a legal and business location.
Related article: Protection of Legitimate Expectations for Long-Term Crypto Investors
Cryptocurrencies were already purchased with taxed income
Bitcoin and other cryptocurrencies are not “generated for free,” but are generally acquired with income that has already been taxed. Many investors invest parts of their salary or savings into Bitcoin after income tax and social security contributions have already been paid on that income.
The holding period ensures that long-term wealth creation is not subject to additional burdens. This principle also exists for other assets such as gold or art. Additional taxation of long-term Bitcoin profits would therefore be perceived by many citizens as a double burden.
Related article: Crypto is purchased with taxable income
The holding period specifically protects small savers
The majority of Bitcoin users are not large-scale investors or institutional speculators, but private small savers. Many people save in Bitcoin monthly with small amounts—similar to an ETF or stock savings plan—to build up additional private retirement provision for the long term.
Younger people in particular are increasingly looking for alternative ways to build wealth as confidence in the long-term stability of statutory pension systems declines. Additional taxation of long-term crypto investments would hit exactly those citizens who want to provide for themselves responsibly.
Politicians regularly call for more private provision. It would be contradictory to first enable long-term saving with Bitcoin and then penalize it through taxation.
Related article: The holding period protects small savers
Bitcoin is already treated similarly to gold
The current tax treatment of cryptocurrencies is based on the taxation of other non-yielding assets such as gold or art. These are also subject to tax-free disposal after certain periods have expired.
Like gold, Bitcoin does not generate ongoing income such as dividends or rental income. Special taxation of Bitcoin would therefore represent unequal treatment compared to comparable assets.
Should the legislator wish to treat cryptocurrencies differently in the long term, it would need to be clarified whether this is compatible with the principle of equal treatment or whether a completely new tax category would need to be created.
Related article: Bitcoin Today—Gold Tomorrow?
Not all cryptocurrencies are the same
The term “cryptocurrencies” encompasses very different systems and technologies. For example, Bitcoin has no central issuer and resembles a digital commodity in many of its properties. Other cryptocurrencies, on the other hand, have central companies, issuers, or distribution mechanisms.
A blanket tax treatment of all cryptocurrencies ignores these differences. It is already clear today how difficult it is to achieve a clean regulatory classification of various crypto assets.
Abolishing the holding period would create additional classification problems and significantly increase the regulatory burden.
Related article: Not all cryptocurrencies are the same
Massive bureaucracy for banks, brokers, and crypto exchanges
A new crypto tax would place significant technical and organizational demands on banks, brokers, and crypto exchanges. These companies would have to develop extensive systems to correctly record purchase prices, sale times, holding periods, and taxable profits.
This is particularly complex with cryptocurrencies, as assets are frequently transferred between different wallets, exchanges, and platforms. The monitoring and documentation systems required for this would incur high costs, which would ultimately be passed on to customers.
Smaller providers and startups in particular could be heavily burdened by these regulatory requirements.
Related article: Massive Bureaucracy for Banks, Brokers, and Crypto Exchanges
International providers can hardly be controlled
Even if German crypto exchanges were required to automatically deduct taxes, the question remains as to how transactions via international platforms should be controlled.
Cryptocurrencies can be easily transferred between different wallets and providers—often across national borders. Investors could simply move their holdings to foreign platforms that are not subject to German tax monitoring.
This would disadvantage German providers and, at the same time, significantly reduce the desired tax effect.
Related article: Who should collect the crypto tax?
Bitcoin payments would become practically unusable
If every payment with Bitcoin automatically constitutes a tax-relevant event, the use of cryptocurrencies as a means of payment will be made significantly more difficult.
Even buying a coffee could have to be documented and evaluated for tax purposes in the future. This would create a significant bureaucratic burden for citizens, merchants, and payment service providers.
Such a regulation would hinder innovation in the field of digital payment methods and effectively make Bitcoin unattractive for everyday use.
Related article: Bitcoin payments would become practically unusable
High administrative burden for the state itself
Not only companies, but also the tax administration itself would have to devote significant resources to implementing and monitoring complex crypto taxation.
The technical tracking of wallets, exchanges, and transactions is costly. At the same time, new auditing and control mechanisms would have to be created.
There is a real danger that administrative costs will ultimately be higher than the additional tax revenue actually generated.
Related article: High administrative burden for the government
Austria shows the problems of a crypto tax
Austria is often cited as a model for stronger taxation of cryptocurrencies. In fact, however, the expected additional tax revenues there fell significantly short of the original forecasts.
At the same time, significant costs were incurred by banks, brokers, and crypto service providers, who had to develop extensive technical systems for tax recording.
The example shows: Higher crypto taxes do not automatically lead to higher state revenues.
Related article: Austria Highlights the Problems with a Crypto Tax
Doubts about extremely high tax estimates
Studies or estimates are repeatedly published that allegedly promise the state billions in additional revenue through a crypto tax.
To date, however, there are hardly any reliable scientific studies that seriously substantiate these figures. Such estimates are often based on simplified assumptions and take into account neither evasive movements nor international capital shifts or the actual administrative burden.
Political decisions should not be based on uncertain projections.
Related article: Billions from Crypto Taxes?
Germany could lose its competitive advantage
Germany is currently considered a comparatively attractive location for Bitcoin and crypto companies. The existing tax treatment has helped to attract investors, developers, and innovative companies.
At the same time, many other countries are actively trying to position themselves as innovation-friendly crypto hubs. Tightening taxation could lead to companies, capital, and talent migrating abroad.
Especially in a global market of the future, Germany should not lightly give up its competitive advantage.
Related article: Does the crypto tax threaten Germany’s position as a business location?
The holding period promotes long-term thinking instead of short-term speculation
The existing regulation rewards long-term holding instead of short-term trading. This creates an incentive for sustainable investment behavior and long-term wealth creation.
A flat tax regardless of the holding period, on the other hand, could even make short-term speculation more attractive, as long-term holding would no longer have a tax advantage.
The holding period thus supports more responsible investor behavior.
Related article: The holding period rewards Bitcoin savers rather than short-term speculation
Bitcoin is more than just an object of speculation
Many people view Bitcoin not just as an investment, but as a technological innovation, an alternative monetary system, and a long-term store of value.
However, the political debate often reduces cryptocurrencies exclusively to speculation or tax avoidance. As a result, the social and technological significance of Bitcoin is underestimated.
An innovation-friendly policy should take a nuanced view of new technologies and not prematurely slow them down with additional tax burdens.
Related article: Bitcoin Is More Than Just Speculation
Frequently Asked Questions About the Holding Period
As of July 2026
What is the Bitcoin holding period?
The holding period is a rule set forth in Section 23 of the Income Tax Act: Anyone who holds Bitcoin or other cryptocurrencies for more than one year may sell them tax-free. The same one-year period also applies to gold, foreign currencies, and other private assets—because, like these, Bitcoin does not represent any rights and has no issuer. The holding period is therefore not a special privilege for crypto, but rather part of a uniform system that has been tried and tested for decades.
Will the Bitcoin holding period be eliminated?
The abolition of this provision is under political debate in 2026: The federal government is considering removing crypto assets from Section 23 of the Income Tax Act (EStG) and subjecting them to the flat-rate withholding tax. No such law has been passed or announced to date (as of July 2026). This initiative is working to prevent this from happening—the reasons are listed at the top of this page.
What happens to holdings that have been held for more than a year (grandfather clause)?
In 2010, the Federal Constitutional Court ruled (decisions of July 7, 2010, 2 BvL 14/02, et al.): Capital gains that arose prior to the enactment of a law and that would have been realizable tax-free under the previous legal framework are protected by the principle of legitimate expectations—their retroactive taxation is null and void. Protecting existing assets from retroactive taxation would therefore not be a matter of political goodwill, but is required by the Constitution.
Where can I sign the petition to keep the holding period?
The Bundestag petition (No. 201716) to maintain the holding period was submitted on May 30, 2026, and is currently under review by the Petitions Committee—signing the petition is only possible after it goes live on epetitionen.bundestag.de. As soon as the petition goes live, we’ll post an update on the petition page and in our newsletter. Once it’s live, the petition needs 30,000 signatures within six weeks to trigger a public hearing in the Bundestag.
Who would be hardest hit by the elimination of the holding period?
Small investors in particular: For investors with a personal tax rate below 25%, the switch to the flat-rate withholding tax means a tax increase—and that’s the vast majority, because according to ECB data, 54% of German crypto owners hold less than €1,000, and 91% hold less than €20,000. Top earners and day traders, on the other hand, would see their tax burden reduced by up to about 40% (from the top tax rate to the flat withholding tax rate of 26.375%). A reform justified on the grounds of “tax fairness” would therefore have exactly the opposite effect.
Will the elimination of the holding period generate significant tax revenue for the government?
There is no published official estimate based on a transparent methodology; according to the Federal Press Conference on April 29, 2026, the only publicly cited government figure—€2 billion—refers to a combined package of measures to combat financial crime and tax cryptocurrency. The only real-world comparison, however, suggests otherwise: After abolishing its holding period in 2022, Austria collected approximately €33.8 million from crypto taxation in 2024—figures that fall far short of German expectations. Furthermore, losses could be permanently offset against gains, which would reduce revenue during bear markets.
Is it true that Bitcoin is used primarily for criminal activities?
No. The Chainalysis Crypto Crime Report 2026 estimates that illegal transactions account for less than 1% of the total cryptocurrency transaction volume. Of that illegal volume, 84% is conducted via stablecoins such as Tether—not via Bitcoin. The often-cited “Pig Butchering” study by the University of Texas also attributes 84% of the fraud volume to Tether; anyone who cites these figures against Bitcoin is misattributing the findings to the wrong cryptocurrency.
Is the holding period a tax benefit for crypto investors?
No—the one-year period is the standard rule under Section 23 of the Income Tax Act (EStG) for private assets without an issuer: It applies equally to gold, foreign currencies, art, and classic cars, and no one is calling for its abolition in those cases. It is the reform itself that would create special treatment by singling out a single asset from this uniform system. Whether such unequal treatment would stand up to the principle of equality under the Basic Law (Art. 3 GG) remains an open question.
