Should we cash in on Ethereum profits or wait for the holding period to end? What does soaring price

Selling Ethereum in Germany: Why date is more important than price

If you want to sell Ethereum in Germany, the purchase date is the primary determinant, and price is only secondary. According to Article 23 of the German Income Tax Act, if the holding period exceeds one year, the income is exempt; if it does not exceed one year, the income is included in taxable income and taxed at your personal tax rate. Because of this, the question raised by the September 11, 2026 price increase is essentially a calendar question, not a chart question: which positions are "old" enough and which of them are actually profitable? This article provides a detailed interpretation of this based on legal provisions, guidance documents from tax authorities, and our independent analysis of the daily Ethereum closing price for two years.

What happened on September 11 and how it turned into a tax issue

On September 11, 2026, Ether hit an intraday high of US$2,664.81 on the Kraken Exchange, the highest level since January 31, 2026, when the price hit US$2,710.35. If measured by daily closing prices for the same trading pair, no day during this period closed above the previous level. The data comes from Kraken's public OHLC interface and was obtained at 06:40 UTC on September 14, 2026; these data only describe transactions at this single trading venue and may vary slightly on other exchanges.

Since then, half of that increase has been given back. At the same acquisition point, Ether was quoted at approximately US$2,519 and EUR 2,179. Anyone who believes his position has reached that level just because he sees an "eight-month high" news headline uses a price that only exists for a few hours. For tax purposes, this high point is irrelevant. The key is the price you pay when selling.

The trigger for this market came from the inflow of funds from the U.S. spot Ethereum ETF. Data service provider SoSoValue reported net inflows of $216.41 million on September 11, of which $148.82 million flowed into BlackRock's ETHA funds; on the same day, the Bitcoin ETF recorded a fourth consecutive day of net outflows, with a net of $13.29 million. These data were attributed to data service providers and were reported by Bitcoin.com News and other media on September 12, 2026. The reallocation of institutional funds suggests demand, but it is not a promise of further price increases. For the market's reaction to previous trends, see our analysis of testing the 200-day moving average of US$2,100 on August 19, 2026.

How long will Ethereum be held and when will it be sold tax-free?

Holding Period Refers to the span from acquisition to disposal of assets. For cryptocurrencies held as private assets, this period is one year. The wording of Article 23, paragraph 1, sentence 1, item 2, of the German Income Tax Code refers to "disposal transactions of other assets", in which the period between acquisition and disposal does not exceed one year. Only these transactions are subject to tax liability. Transactions held for more than one year are not subject to this clause, regardless of the return.

The rule for calculating the term in the German Civil Code usually applies: the day of acquisition is not counted, and the one-year term ends at midnight on the day corresponding to the day of acquisition. For example, people who bought on September 13, 2025 can sell duty-free on September 14, 2026. Those who buy on September 14, 2025 must wait until September 15, 2026. Here, the difference in a single day determines the entire tax burden. This is an all-or-nothing threshold, and there is no prorated allocation.

What is considered a "disposal"

It is not just sales converted into euros that trigger tax testing. Exchanging Ether for other currencies or stablecoins, or using Ether to pay for goods or services, are considered disposal. The notice issued by the German Federal Ministry of Finance on March 6, 2025 stipulates that when contemporary coins are used for exchanging goods and services, the agreed euro price will be used as the disposal income. If the price cannot be determined, the market price will be referred to. Therefore, anyone who deposits a position in a stablecoin to exchange it later has effectively triggered a taxable event and started a new year of holding period for the new position.

EUR 1,000 exemption limit: Scope of protection and threshold

There is a exemption limit for taxable sales occurring within one year, that is, after this threshold is exceeded, the entire amount will become taxable. According to Article 23, paragraph 3, fifth sentence of the German Income Tax Act, if the total proceeds from private disposal transactions are less than € 1,000 in a calendar year, the proceeds are exempt from taxation. The word "less than" here should be understood literally: 999 euros of gains are not subject to tax, but at exactly 1,000 euros, the full amount becomes taxable, not just the excess.

There are two nuances that people often overlook. First, the limit applies to the sum of all private disposal transactions that year, and therefore also covers sales of gold or gains in other different currencies. Secondly, this is an annual figure: if a gain of 900 euros is achieved in December and a further 900 euros is achieved in January of the following year, the limit is below both times. However, if the two are combined into December of the same year, the limit will be exceeded. As shown in the vendor-generated tax reports we mentioned in the comparison of crypto tax tools and combination trackers, this annual total shows up before you sell, which is the key point to focus on when planning.

The order of use determines which unit is considered sold: Where Ethereum is in the eyes of the tax law

FIFO, averaging method, individual designation: Which part of Ethereum is the tax office selling?

Anyone who has made a purchase over a period of several months does not hold a single position, but many batches with different purchase dates and prices. Which part is considered disposed of when you sell is governed by the Order of Use . The Ministry of Finance's notice of March 6, 2025 puts the Individual Designation Principle first in paragraph 61: If a single unit can be specifically identified, that unit shall prevail. If this is not possible, cryptocurrency assets with the same transaction identifier obtained first are considered disposed of and should be valued using the average method. For simplicity, valuations can also assume that units acquired first are disposed of first. This is the FIFO program (first-in, first-out).

What is important in practice is a sentence from the same paragraph: The wallet-based approach applies. Therefore, each wallet and each exchange account are considered separately. Once selected, the method must be retained in the wallet until all units with the same transaction identifier in the wallet have been completely disposed of; then, it can be changed after a new purchase. There are separate options each time for currencies with different transaction identifiers in the same wallet.

What does this mean for practice

Wallet-based perspectives are a tool that many people don't even know about. If the old, tax-exempt Ether is in the hardware wallet and the young, taxable one is in the exchange account, then a sale on the exchange will only touch the positions there. The operating life of older units is not affected by it. Conversely, problems arise when you merge everything into a single address: batches are mixed together, and the order determines what is sold. Anyone moving a position should record these changes; paragraph 103 of the notice clearly requires that reallocations within wallets be documented so that the averaging method or FIFO method can be applied.

Digital Drill: Which Ethereum purchases are actually profitable today?

The decision to sell or wait depends on a rarely asked question: Does the tax-free batch really show a profit? To this end, we analyzed the daily closing price of Ether against the euro pair provided by Kraken, which was obtained at 06:40 UTC on September 14, 2026. The interface window traces back 721 trading days, that is, until September 24, 2024. Each daily closing price is compared to the current price of approximately € 2,179. The method is deliberately crude, assuming purchases at each daily close and ignoring fees.

The results are self-evident. During the period from September 24, 2024 to September 13, 2025, out of 355 purchase days, only 89 were lower than today's price. This accounts for 25%. As a result, three-quarters of the tax-free purchase days are currently at a loss. In the subsequent window (September 14, 2025 to September 13, 2026), the purchase was still within the taxable period, and 225 of the 365 days were lower than today's price, accounting for 62%.

Price history itself provides the reason. In September 2025, Ethereum prices range from € 3,324 to € 4,014, with a median of € 3,686. People who bought then lost about 41% today. By contrast, the low point of the window appears in the summer of 2026, and those cheap purchases are not yet twelve months old.

Trap: Tax-free is usually a lot that happens to be losing money

These two sets of data create a disturbing mix that currently affects many portfolios. The units you can sell duty-free are mainly those you bought at a high price. The units showing profits are mainly young and therefore taxable. So anyone who hears that they can sell duty-free in a year and looks for the oldest batch accordingly will in many cases realize a loss while giving up the tax exemption they spent twelve months earning.

Losses from tax-free sales are tax worthless: anything beyond the one-year period is neither taxed nor deducted. Instead, losses within the term can be offset, albeit with narrow limits. Section 23, paragraph 3, sentence 7 of the German Income Tax Act allows set-off only to the extent of the proceeds of private disposal transactions for the year; deductions from other income are excluded. Under sentence 8, rights carried forward to previous and subsequent years are still available, but are again limited to private disposal transactions in each case.

Order of checks before sale

So, what is reasonable? It is a sequence that starts with the calendar and ends with the price. First: Which batches are older than a year old, and where are they? Second: What is the cost basis for these batches, and are they profitable or losing money? Third: How many benefits from private disposal transactions have you realized in the current calendar year, and where do you stand relative to the € 1,000 exemption limit? Only then can the question of price levels be answered. Our newsroom did the same calculation for XRP on August 24, 2026, after a week of 53% growth; the decision-making structure is the same, but the numbers are different.

Actual cost of sale over the term

Gains from taxable sales are not levied at the 25% withholding rate applicable to interest or dividends. It is counted as other income under Article 22, item 2, in conjunction with Article 23 of the German Income Tax Act, forms part of taxable income, and is taxed at your personal tax rate, plus solidarity surtax and applicable church tax. As a result, those in the highest tax bracket lose much more than a quarter, while those with low incomes lose less.

The revenue itself is defined by Section 23, paragraph 3, sentence 1 of the German Income Tax Act as the difference between the disposal price on one side and the acquisition cost on the other side plus income-related expenses. As a result, transaction fees for buying and selling reduce taxable benefits, provided you can prove them. When sold through an exchange, expenses appear in the report; when sold from your own wallet, network expenses are included in the calculation. Which venues charge which fees depend largely on transaction volume and change constantly.

What matters is the legal provisions and notices from the tax authorities, not the price report of the day.

Pledges and loans: Will the term be extended to ten years?

This concern has plagued the forum for many years and has a real background. Article 23, paragraph 1, sentence 1, item 2, sentence 4, of the German Income Tax Act extends the period to ten years, provided that "income is generated within at least one calendar year." Applied to cryptocurrencies, this means anyone pledging or lending their Ether and collecting rewards must wait ten years.

The tax authorities have clarified the matter. The Ministry of Finance's notice of March 6, 2025 clearly states in paragraph 63:"For currency or payment tokens, the extension of the disposal period stipulated in Article 23, paragraph 1, sentence 1, item 2, sentence 4, of the German Income Tax Law does not apply." Therefore, even if the unit generates revenue during this period, Ethereum's one-year term as a currency and payment token is still valid.

The reward itself should be considered separately. This income is counted as independent income and the unit received is deemed to have been received. From the date of receipt, they are subject to a separate one-year term and valued at the current market price. Therefore, people who receive pledge rewards every week accumulate new batches with their own duration every week. Which providers withheld how many rewards, our newsroom has broken down 14 providers on September 12, 2026.

What will the draft with a December 31, 2026 deadline change

The future of the holding period is currently the subject of political debate. Reported that a draft from the Federal Ministry of Finance sets a deadline of December 31, 2026: cryptocurrency assets acquired after this date will be cancelled for a one-year period, and positions acquired before this will continue to be subject to current laws. All this has not yet been implemented. As long as no bill appears in the Federal Law Gazette, Section 23 of the German Income Tax Law will still apply in its current form and your sales this year will also be settled in this form.

For your decision today, this means two things. First, selling early simply because of possible changes in the law is a gamble on the draft. Second, this grandfather clause would be a reason to keep existing tranches intact, as newly purchased alternative positions may be subject to new rules. The development of the debate since the summer was tracked by our newsroom on September 8, 2026, in its article on the grandfather clause and deadline.

Waiver limits, loss, cross-year: three levers

Once the decision to partially sell is made, there are still three variables under your control. The first is the timing during the calendar year. Because the exemption limit is recalculated every year, splitting the sale across years can spread the taxable income over two years and make it below the limit twice. The second is the wallet you sell, because the order of use is based on the wallet. The third is to offset losses from other private disposal transactions in the same year, which clearly allows Section 23, paragraph 3, seventh sentence of the German Income Tax Act.

On the contrary, there are two things that are not levers. Changing exchanges will not change terms because the key is acquisition rather than storage location. Moving to another address of your own is also not a disposal, so it will neither reset nor end the term; but if it is not recorded, it may make batch allocation more difficult.

What records are needed for sale

The burden of proof is on you. Paragraphs 102 and 103 of the Ministry of Finance's notice list what the tax authorities may require. This includes acquisition time, acquisition quantity and type of acquisition, euro-denominated acquisition and related fees, disposal time and quantity and trading platform, euro-denominated disposal income and disposal fees, and market prices used when not traded in euros and their sources. In addition, what is clearly required is the documentation of the order of use selected for each wallet, as well as the documentation of reallocations between wallets.

In practice, this means that tax reporting is not post-mortem paperwork. It is a prerequisite for proving tax exemption for old batches. Anyone who no longer holds a purchase record for 2021 due to the exchange closure will lack evidence under suspicion. A bank account statement where funds left at the time often helps as supporting evidence.

Despite taxes, when is it worth selling?

Taxes are a cost factor, not a prohibition. In some cases, a taxable sale is a wiser decision. Anyone who pays back a loan at a high interest rate is getting a return on it, and the price remains uncertain. Anyone who holds a single position so large that a drop by half would affect their life plans is trading taxes for peace of mind. Anyone who needs to pay a fixed fee over a few months should not let money stay stuck in assets that have fluctuated between 1,405 and 2,881 euros this year.

Conversely, the rule of taking profits after gains, of course, is expensive in Germany during a one-year period. At a personal tax rate of 42%, there is almost half of the proceeds between a taxable sale today and a tax-free sale a few months later. Prices must first provide for this difference.

Ethereum Revenue and Holding Period: Summary of Points

Check prices before purchase date. Pull up your batch list, including the date, quantity, and cost basis for each wallet, and mark which ones are older than one year old. Tax reports from a comparison of cryptographic tax tools and combination trackers can provide this overview in minutes, while simultaneously recording the selected order of use.

Sell from the right wallet. Deliberately decide which position to dispose of and include venue fees in the calculation; terms vary widely, so it is worthwhile to check a comparison of the best crypto exchanges before placing an order.

Let the rest work as planned. Anyone who does not want to exit completely should establish when to release the remaining position in the next batch and continue regular purchases in an orderly manner; a comparison of how to set up regular purchases is demonstrated by savings plan providers.

This article describes the legal position based on regulations and notices from tax authorities; it does not replace tax advice in individual cases. Anyone who needs to consolidate multiple wallets, pledge income and multi-year purchases is better off consulting a tax adviser rather than relying on estimates.

Complete source: The text of Article 23 of the German Income Tax Law and the Ministry of Finance's Notice of March 6, 2025 on Specific Issues Concerning Income Tax Treatment on Certain Cryptocurrency Assets. (As of September 14, 2026. This article does not constitute investment advice. Price and fee structures are subject to change; please check terms with your provider before purchasing.)