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Billions from crypto tax? Why current estimates are on shaky ground

In the political debate over the future of the one-year holding period for Bitcoin and other cryptocurrencies, one figure keeps appearing: the German state is allegedly losing up to 11.4 billion euros in tax revenue annually.

This figure is having an impact. It is finding its way into political discussions, being picked up by the media, and serving as an argument for the abolition of tax-free sales after the holding period expires.

But how reliable are these estimates actually?

No reliable scientific basis

Anyone following the current debate closely will quickly realize that there is currently no independent scientific study that seriously proves the claimed billion-euro amounts.

The most frequently cited data source at present is the “Crypto Tax Report 2025 Germany” by the Austrian tax software provider Blockpit.

This is not a peer-reviewed scientific study, but a corporate report from a commercial provider of crypto tax software. However, the figures it contains are now often treated as scientifically proven findings.

Particularly in the case of tax policy decisions with significant consequences, a distinction should be made between scientific evidence and corporate market analysis.

Blockpit data is not representative of Germany

According to its own statements, the Blockpit study is based on data from around 10,000 German user accounts.

This data is then extrapolated to the estimated seven million German crypto users.

One central question remains unanswered:

Are users of crypto tax software even representative of the entirety of all German Bitcoin and crypto investors?

Those who hold Bitcoin long-term, perform few transactions, and sell tax-free after the holding period expires often do not require specialized tax software.

In contrast, such software solutions are primarily used by:

• active traders,
• DeFi users,
• stakers,
• investors with many transactions,
• individuals with complex tax situations.

Blockpit’s user base is therefore more likely to reflect those investors who actually have a tax problem to solve.

Whether this group is representative of millions of German Bitcoin and crypto investors has not yet been proven.

From 10,000 users to 7 million crypto owners

According to its own statements, the Blockpit study is based on data from around 10,000 German user accounts. At the same time, the results are applied to the estimated seven million German crypto owners.

This results in an extrapolation from approximately 10,000 data sets to a population that is around 700 times larger.

Such an extrapolation can be fundamentally permissible—provided that the sample studied is representative of the entire population under consideration.

However, there are significant doubts about exactly that.

Users of crypto tax software typically differ from the average crypto investor. Those who use such software often have:

• larger portfolios,
• many transactions,
• taxable trading activities,
• staking, DeFi, or other complex processes,
• an increased need for documentation and reporting.

In contrast, many investors who buy and hold Bitcoin long-term often do not need specialized tax software at all. Those who make few transactions and hold assets long-term regularly have significantly lower documentation requirements.

The study itself reports an average portfolio of around 57,200 euros for its users. Whether this profile actually reflects the structure of the entire German Bitcoin and crypto community remains an open question.

This is precisely why the question of the sample’s representativeness is of central importance. Without reliable proof that the users studied adequately represent the entirety of German crypto investors, extrapolations to millions of citizens must be interpreted with appropriate caution.

The German market leader is not Blockpit

There is also another aspect:

Blockpit is not the only, nor the largest, crypto tax software in the German-speaking market.

CoinTracking has been considered the market leader for years, with user numbers significantly higher than those of Blockpit.

However, CoinTracking’s data has not yet been published and is not reflected in political debates.

It is therefore unclear whether Blockpit’s user structure is even typical for the German market or whether this results in significant distortions.

Wealthy investors are disproportionately represented

The Blockpit study itself shows an average portfolio of around 57,200 euros per user.

The median, on the other hand, is only around 13,000 euros.

This large difference shows that a few large portfolios pull the average up significantly.

This creates the risk that conclusions about millions of average users are drawn from the data of particularly wealthy and active investors.

For political decisions, however, it would be crucial to know what the actual distribution of wealth and profits within the German Bitcoin and crypto community looks like.

A bull market is not a normal state

Another weakness of the current estimates is that they are largely based on the extraordinary market environment of 2024.

2024 was characterized by:

• new all-time highs,
• sharply rising prices,
• significant realized gains,
• exceptionally high trading volumes.

But cryptocurrencies are subject to strong market cycles.

While high profits are made in a bull market, significant losses can occur in bear markets.

Anyone who wants to talk seriously about long-term tax potential must therefore not look exclusively at the most successful market year.

A reliable analysis would have to cover several market cycles and take both profit and loss years into account.

Otherwise, there is a risk of confusing temporary bull market gains with permanently available tax revenue.

Unanswered questions regarding methodology

The Bitcoin Bundesverband (German Bitcoin Association) has therefore asked numerous questions about the methodology in an open letter to Blockpit and Professor Co-Pierre Georg.

To date, answers are missing on the following points, among others:

• How were the data sets selected?
• How was the tax residency of the users verified?
• How was the completeness of the data ensured?
• How were double counts excluded?
• What statistical uncertainties exist?
• What are the error margins of the extrapolations?
• How are the profits actually distributed?
• What changes in investor behavior were taken into account?
• What would be the effects of evasive reactions or lower investments?
• Were the results independently scientifically validated?

Precisely because the mentioned billion-euro amounts are now exerting significant political influence, a transparent answer to these questions would be urgently required.

Politics needs reliable figures instead of estimates

No one disputes that cryptocurrencies raise tax issues.

Nor does anyone dispute that the state has a legitimate interest in appropriate taxation.

But tax policy decisions should be based on reliable data.

Currently, there is no independent scientific study that proves beyond doubt that Germany is losing billions annually in the magnitude often cited.

Instead of relying on individual corporate studies and extrapolations, a comprehensive scientific investigation should first be carried out.

What would be necessary now

Such an investigation should, in particular, be based on a data foundation that reflects the actual breadth of the German Bitcoin and crypto community. Data from individual tax software providers can provide valuable insights, but it is no substitute for a representative study of the overall market. The goal must be to gain reliable insights into investor behavior, holding periods, profit realizations, and possible tax effects before far-reaching tax policy decisions are made.

At present, it is not reliably known how high potential additional tax revenues would actually be. The estimates discussed so far are based on extrapolations from a relatively small user group and do not allow for reliable conclusions about the entirety of German Bitcoin and crypto investors.

Before a decision is made on the abolition of the holding period or other fundamental changes to taxation, an independent scientific study should therefore be commissioned. This should be based on a broad and representative data foundation, take several market cycles into account, analyze different tax models, and fully disclose its methodology transparently.

Tax policy decisions with significant impacts on millions of investors and Germany as a location for innovation should be based on reliable scientific findings—not on extrapolations whose validity and representativeness remain unclear.

Sources:

• Blockpit: Crypto Tax Report 2025 Germany
• The 11.4 billion euro question