Definition ∞ Short-term gain refers to the profit realized from the sale of an asset that has been held for a relatively brief period, typically one year or less. This financial concept is significant for tax purposes, as short-term gains are often taxed at higher rates than long-term gains. In the digital asset market, it applies to profits from quick trades of cryptocurrencies or NFTs. Investors frequently aim for short-term gains through active trading strategies.
Context ∞ Crypto news often discusses short-term gains in relation to market volatility and active trading strategies employed by retail and institutional investors. Debates frequently concern the tax implications of frequent cryptocurrency trading and the need for clear guidance from tax authorities. A critical future development involves evolving tax regulations that specifically address the unique characteristics of digital asset transactions and their holding periods.
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