The Crypto Holding Period – Germany’s Most Unnecessary Tax Privilege

The Crypto Holding Period – Germany’s Most Unnecessary Tax Privilege

By Co-Pierre Georg

10 March 2026

Almost two thirds of all private crypto gains in Germany remain tax-free – an almost unique special path in Europe. Four reform models show how the crypto gap could be closed – with additional revenues of up to 11.4 billion euros for 2024 alone.

47.3 billion euros: that is the amount of gains German crypto‑asset investors realised in 2024. Because of a regulation that is almost unique in Europe, almost two thirds of these gains remain tax-free – while capital gains from shares have in principle been subject to the flat withholding tax since 2009. The result is a crypto gap: a striking unequal treatment between asset classes – with tangible consequences for tax fairness and government revenues.

The magnitudes at stake become clear in Figure 1: even under conservative assumptions (including a decline in investment due to higher crypto taxes and high tax compliance), potential additional revenues amount to up to 11.4 billion euros depending on the reform model – for 2024 alone.

Figure 1: Potential additional tax revenues from crypto assets in Germany (2024) under four reform models.

Germany’s Special Path in a European Comparison

The core of the German special path in crypto taxation is the so‑called holding period: in private assets, gains from crypto assets are in principle tax‑free if the asset is sold after more than one year. Within the EU, this is the exception, not the rule. Many member states tax crypto gains in a similar way to other capital investments – in some cases at a flat rate, in others progressively; some rely on wealth‑ or imputed‑return models. Figure 2 shows how small the group of countries is that offer a holding‑period exemption.

Figure 2: Crypto taxation in the EU (simplified taxonomy, individuals). Germany (DE) highlighted.

What is the “Crypto Gap”?

The gap has two components. First: the holding period renders long‑term capital gains tax‑free – a privilege that does not exist for shares. Second: even for short‑term gains, enforcement is difficult because transactions take place on many platforms and the data situation for tax authorities was incomplete for a long time. Industry estimates suggest that only a small proportion of all taxable crypto gains are declared correctly.

In two Bundestag debates in autumn 2025, this unequal treatment was pointedly addressed. During the adoption of the DAC‑8 implementation act on 6 November 2025, Isabelle Vandre (Die Linke) criticised the “absurd special path” of the holding period and called for its abolition. One month later, in the Bundestag debate on Bitcoin on 5 December, Max Lucks (Bündnis 90/Die Grünen) spoke of a “crypto gap” that urgently needed to be closed. And SPD MP Jens Behrens also signalled a willingness to address the issue together in a legislative process.

The term crypto gap captures the problem quite precisely: when large gains in one asset class are systematically treated differently, this not only leads to a loss of revenue – it also erodes the perception of fairness and equal treatment.

Why the Special Treatment?

From an economic perspective, it is hard to justify why crypto assets in particular should be permanently treated more favourably than comparable risky capital investments. So far in Germany, crypto assets are treated as private economic goods, such as art or vintage cars, and thus explicitly differently from, for example, shares. A few years ago, this classification may have made sense because the market for crypto assets was still underdeveloped, but by now market participants treat large crypto assets like high‑risk tech stocks and not as a “safe haven” like gold.

If Bitcoin was truly “digital gold”, it would have to behave analogously to gold in stress phases: with rising prices when uncertainty increases. The data say otherwise. Bitcoin is around three to four times as volatile as gold and one and a half to two times as volatile as the most important high‑tech stocks. Figure 3 shows the average price reaction around macroeconomic shock events: gold rises immediately after the event, while Bitcoin falls in parallel with large US tech stocks (the “Magnificent 7”). Markets therefore price Bitcoin more as a risk asset than as a store of value – and precisely for that reason a tax‑law special treatment as supposedly “new gold” is no longer politically justifiable.

Figure 3: Average price reaction of Bitcoin, gold and “Magnificent 7” around macroeconomic shock events (normalisation: event time = 100; 10‑minute intervals before/after the event).

The tax classification in Germany has been gradually specified since 2013 – starting with a query by then FDP MP Frank Schäffler to the Federal Ministry of Finance, after which Bitcoin was recognised as a “unit of account” or private economic good. On this basis, and supported by further interpretative guidance and BMF letters, a regime emerged that provides for a one‑year speculation period for private crypto disposals. Today, this element is at the core of the crypto gap.

Four Reform Paths – From Simple to Systemic

If policymakers want to abolish or replace the holding period for crypto assets, at least four plausible models are on the table:

  • Scenario 1: Abolish the holding period within the existing § 23 EStG. Crypto gains would still be treated as private economic goods but, as with other private sales transactions, would be taxed without exemption at the individual income tax rate. Historically, adjusting speculation periods within § 23 EStG is not new: in the Tax Relief Act 1999/2000/2002, the holding period for property was extended from two to ten years and the period for other economic goods was increased from six months to one year.
  • Scenario 2: Equal treatment with shares (§ 20 EStG). Gains would be taxed, like capital income from share sales, at a flat withholding tax rate (25% plus solidarity surcharge). As the average value of a crypto portfolio in Germany is 57,300 euros according to industry data – and even BlackRock, the world’s largest asset manager, cites only 1–2% as a “reasonable range” for a Bitcoin share in a multi‑asset portfolio – it is likely that crypto gains would otherwise be taxed at an expectedly high income tax rate of up to 45%. Many crypto investors would probably be better off with taxation in line with shares than in Scenario 1.
  • Scenario 3: “Dutch model” (imputed return on wealth stock). In the Netherlands, crypto assets are taxed in the so‑called Box 3: based on the wealth stock and a notional return estimated by the tax authorities. This considerably simplifies enforcement but is conceptually a systemic change.
  • Scenario 4: “Swiss model” (wealth tax). Crypto assets would be included in a wealth tax that differs by canton but is generally comparatively low. Politically and constitutionally, introducing a wealth tax in Germany is particularly controversial; at the same time, this model would yield the lowest tax revenue.

Figure 1 makes the trade‑off visible: the closer the model is to a taxation of realised gains (Scenarios 1 and 2), the higher the potential revenues, even if one assumes that investors no longer invest in crypto assets, or invest less, because of the taxation. Systemic alternatives (Scenarios 3 and 4) are in some cases administratively simpler (because it is easier to analyse crypto‑asset holdings than the entire transaction history) but – depending on the parameters applied – deliver significantly lower additional revenues.

The Industrial Policy Argument Is Not Convincing

A common counter‑argument is: stricter taxation would drive away innovation and companies. The European comparison speaks against this. Austria fundamentally reformed the taxation of crypto assets on 1 March 2022; gains there are in principle taxed at 27.5%. This has not harmed Vienna as a crypto location – on the contrary: large crypto firms such as Bybit, which has made Vienna its European headquarters, and the Austrian company Bitpanda have even increased their footprint in the Austrian capital.

The truly relevant question is therefore less “whether” than “how”: how can a framework be created that ensures equal treatment between asset classes, improves enforcement and reporting structures, and increases legal certainty for citizens and companies? The DAC‑8 implementation act, which the Bundestag passed in November 2025, stipulates that … This is a first step towards transparency. Now it is up to policymakers to provide clear answers in the area of taxation as well.

Conclusion

The crypto gap is not a law of nature but a political decision. Anyone who takes tax justice seriously can end the German special path – without stifling innovation. Abolishing the holding period or equal treatment with shares would be legally straightforward and fiscally effective; alternatively, systemic models could be discussed. In any case, the following holds: the longer policymakers wait, the greater the unequal treatment and enforcement deficits become. It is high time for policymakers to wake up and abandon the German special path in crypto taxation.

Anyone who wants to see for themselves what tax revenues could look like under different parameters and models can do so at kryptoluecke.de (German only).

Suggested citation

Georg, Co-Pierre (2026): The Crypto Holding Period – Germany’s Most Unnecessary Tax Privilege. In: eFin-Blog. https://zevedi.de/en/efinblog-the-crypto-holding-period-germanys-most-unnecessary-tax-privilege/ [10.03.2026]. https://doi.org/10.83253/rd4z-7v75.

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