GlossaryIntermediate
Holding Period
The length of time an asset was held before being disposed of, which can determine which tax rate applies to any gain or loss.
A holding period is the length of time an asset was held, from acquisition to disposal. In many tax frameworks, whether a holding period crosses a specific threshold (commonly one year) determines whether a resulting gain or loss is treated as short-term or long-term, which can carry meaningfully different tax rates.
Crypto-to-crypto trades, not just crypto-to-fiat sales, generally reset the holding period for the asset given up, since the trade itself is commonly treated as a disposal — see Kaavon's "Crypto Cost Basis and Accounting Methods" guide.
Examples
- An asset held for just under a jurisdiction's long-term threshold, then sold, may be taxed at a meaningfully different rate than if it had been held slightly longer.
- Swapping one crypto asset for another is generally treated as a disposal, which can end the holding period for the asset given up.