Taxing crypto losses in a bitcoin bear market

Clients reeling from the recent slump in the price of bitcoin are in illustrious company.

American Bitcoin Corp. ABTC-Q co-founder Eric Trump – the son of U.S. President Donald Trump – recently backed the company’s mining-and-gathering strategy despite seeing the value of his stake shrink by a reported US$600-million as shares slid more than 95 per cent from their peak in September, 2025.

The recent drop is the latest for the volatile asset after bitcoin was on a largely upward tear between mid-2022 and October, 2025, when it hit its all-time high of just more than US$125,000.

Following a steady decline, bitcoin has spent this summer hovering around half its peak value, leaving some investors to consider the possibility of a tax write-off.

The Canada Revenue Agency has issued a great deal of guidance on cryptocurrencies to taxpayers over the years, starting in 2013, when it announced transactions would be treated in the same way as those of any other commodity, leaving any profits to be treated as either capital gains or business income.

In good times, online traders would typically rather see their crypto profits taxed as capital gains to benefit from the 50-per-cent inclusion rate as opposed to business income, which is taxed in full.