Your 2025 Crypto Tax Guide: What You Need To Know
Speakers
Laura Shin — Host, Unchained
— Unchained podcast host
Laura Walter — Founder/CPA, CryptoTaxGirl
— CryptoTaxGirl founder
Summary
- The 2025 tax year (filing in early 2026) introduces the 1099-DA form, fundamentally changing crypto reporting from a "universal ledger" to a "wallet-by-wallet" accounting method.
- A new "phantom tax" risk emerges in 2026 for prediction markets/gambling: losses are capped at 90% of winnings, meaning break-even traders will owe taxes on 10% of their volume.
- The administrative burden of the new 1099-DA (which often lacks cost basis data for transfers) will likely drive retail investors away from on-chain DeFi and toward "walled garden" exchanges or ETFs for simplicity.
- Privacy coins face an existential regulatory threat via tax audits; without perfect provenance, the IRS defaults cost basis to $0, maximizing tax liability.
Trade Ideas
"The IRS is requiring that everybody move from what's called a universal method of accounting to a wallet-by-wallet method... If you transfer anything into your Coinbase, you're going to have to provide the cost basis upon transfer... discourage[s] transferring a little bit." The new "wallet-by-wallet" rule destroys the convenience of moving assets between DeFi, cold storage, and exchanges. To avoid a tax reporting nightmare (reconciling transfers manually), retail users will consolidate activity onto single platforms that handle the 1099-DA automatically. Coinbase and Robinhood benefit from higher retention and reduced churn to DeFi. LONG. Regulatory friction acts as a moat for compliant, centralized US exchanges. Users may leave crypto entirely due to complexity rather than consolidating.
"In 2026, the... bill limits gambling losses to now 90% of winnings... You technically broke even. But on your return, you actually now... pay tax on $10,000 of phantom gambling income." Prediction markets are treated as gambling. The new 2026 tax law creates a mathematical disadvantage for high-volume traders. If you bet $100k and win $100k (break even), you can only deduct $90k of losses, leaving you with $10k of taxable income despite making $0 profit. This destroys the liquidity incentives for market makers and heavy users. AVOID. The tax code now penalizes volume on these platforms. Legislation could change or "Parity Act" could reclassify these assets.
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