2nd January 2026 > > A couple of thoughts, & taxes.

tl;dr

Phew! The CCC is back, and about time too. A couple of early thoughts about 2026. A note of caution with regards to tax.

Market Wrap

Despite thin markets with the scope for a banana skin or two, cryptos got through the festive period without mishap. In the two and half weeks since the last CCC, BTC has moved higher by a grand total of $200 with a trading range of $87k to $90k. Who claimed that BTC is a volatile asset?

Curious Crypto’s Commentary – 2026

I won’t be drawn into making firm predictions for 2026, as my timeframe (and surely yours too) is longer than just twelve months. What I will say is that in about a week’s time, we will have a much clearer view on the short-term direction of prices. Why? Since the October FOMC meeting, the spot BTC ETFs have seen a net outflow of $5.7bn with $1.3bn since the December FOMC meeting. These outflows were likely mostly later entrants without real conviction, who high-tailed it when faced with a loss going into year-end. With books back at zero, and renewed risk appetite across all asset classes, next week’s spot BTC ETF flows will give us good information about whether the trend at the end of 2025 is set to continue or not. Embedded within that question is whether the four-year cycle is toast or not. You know my view on that topic. We will soon find out.

Another biggie is whether 2026 is the year when tokenisation of financial assets really starts to take off. The regulatory framework in both the US and the EU is largely in place, though it would be better for us to see a quick passing of the CLARITY Act in the US, which will bring, ahem, clarity to the roles of the different regulators.

It seems clear to me that TradFi is preparing itself for the tokenisation revolution, in response to customer demand. It will need a complete rewiring of the current procedures and infrastructure around the issuing and trading of TradFi assets. The first tentative steps have been taken by giants such as BlackRock and J.P. Morgan. First mover advantage will be so huge, I am quietly confident that this will be the crypto story of 2026.

Curious Crypto’s Commentary – Crypto taxes

The OECD-led global standard Crypto-Asset Reporting Framework (CARF) comes into force from January 1^st, 2027, but is being implemented in many countries this year.

CARF requires that “crypto service providers” – centralised cryptocurrency exchanges, brokers, other intermediaries, and even some DeFi applications – must collect and report identification data for each client, and the movement of cryptos assets. Users of Coinbase in the UK will already be familiar with the need to declare the destination of funds moved out of Coinbase – whether to another exchange, your own self-custodial wallet, or to a third party.

The amount of data collected is going to be vast, potentially proving to be a great weapon in the fight against the very small amount of illicit activity enabled by cryptos. It will also be very handy in the battle against those who wish to avoid paying taxes due on crypto gains.

You may well argue correctly that taxing capital gains from investments made from income that has already been taxed is outrageously egregious, ridiculously unfair, and desperately damaging to everyone, for it has a material and unwelcome impact on the cost of capital, lowering productivity, and making us all poorer. But however right that argument is both logically and morally, the fiscal incontinence of all governments means that short-sighed demands for our hard-earned cash trump the sensible course of action. So, you must pay up.

I have recently been through the process of fixing the foundations for two different individuals with regards to the history of their personal crypto activities. I cannot be sure that these two examples are indicative of most people’s lacklustre approach to record-keeping, but I suspect it is. The reconstruction of that history has been long and sometimes painful, but also necessary if one wishes to not fall foul of the rapacious demands of the ever-greedy taxman.

If you think you might not have been as diligent as you should have been, may I suggest you get in touch with my tax-team who will be able to put your crypto affairs in order. Failing that, the very minimum you should be doing right now is downloading your centralised cryptocurrency exchange statements once a month and keeping them for a later date when you will need to explain in detail every single crypto transaction you have ever executed. Note to Coinbase Pro users – following the closure of this product in 2022, Pro statements will only be available until some unspecified date in 2027. This is a task that needs doing now.