Capital loss

An investor incurs capital loss when an asset has decreased in value and is sold for less than its purchase price.  Capital loss occurs when the selling price of an asset, such as stocks, real estate, or cryptocurrencies, is lower than the original purchase price. For example, if an investor buys Bitcoin for $50,000 and later sells it for $40,000, the $10,000 difference represents the capital loss. While capital loss represents a financial setback, it can also provide strategic tax advantages for investors managing their portfolios.