Investing in Bitcoin With a Savings Plan or a Lump Sum: What the December 31 Tax Cut-Off Changes

Anyone putting money into Bitcoin today decides first on the form: a single amount all at once, a fixed monthly instalment or an exchange-traded security in a securities account. In October 2026 this decision about investing in Bitcoin has an additional reason to be looked at closely. The German finance ministry’s draft bill on crypto taxation provides that the one-year holding period continues to apply only to holdings acquired by December 31, 2026. Whatever is bought after that is to fall under the flat-rate withholding tax. The cabinet is due to adopt the draft on October 14.

This article recalculates the three routes against the prices of the past ten years, explains the German tax position for each of them and names what can go wrong on each route. It gives no buy recommendation and names no price target. You will find the current level and the analyst views on Bitcoin on our prediction page.

Investing in Bitcoin: These Three Routes Are Open in Germany

All three routes lead to a stake in the price performance of Bitcoin, but they differ in what you own at the end and in how the tax authorities treat it.

The direct purchase means that you acquire real Bitcoin and either leave it with the trading platform or transfer it to a wallet of your own. A wallet is not a purse but the management of a cryptographic key pair with which you can dispose of a blockchain address. Whether you deploy the whole amount at once or a monthly instalment is, on this route, purely a question of timing.

The savings plan is a standing order for a direct purchase: a provider buys Bitcoin at a fixed rhythm for a fixed euro amount, regardless of the price. The technical term for this is dollar-cost averaging. It describes the fact that a fixed instalment buys more Bitcoin at low prices than at high ones, and that the average price therefore lies below the mean of the prices. How this effect behaves in a slump is something we worked through in June 2026 under dollar-cost averaging in a crypto crash.

The security is the third route. In the EU there is no Bitcoin fund under UCITS rules, because a fund of that kind may not put its entire assets into a single asset. What is offered in Germany as a Bitcoin ETF is therefore almost always an ETN or ETP, that is, an exchange-traded debt security collateralised with Bitcoin. Which products these are and what you have to watch out for with them is collected in our overview of crypto ETFs in Germany.

The December 31, 2026 Cut-Off and the One-Year Holding Period

Today, Section 23 of the German Income Tax Act applies to privately held Bitcoin: anyone who holds for longer than a year sells tax-free, regardless of the size of the gain. Anyone who sells earlier pays their personal income tax rate on the gain as soon as the total of all private disposal gains in the calendar year reaches 1,000 euros. Those 1,000 euros are an exemption limit and not an allowance: from one euro above it, the entire gain is taxable, not just the excess part.

The draft bill, which according to the Bitcoin portal Blocktrainer the cabinet is due to take up on October 14, would end this system for new purchases. Crypto assets acquired after December 31, 2026 are to be subject to the flat-rate withholding tax, that is, a fixed rate regardless of the holding period. For everything that was in the portfolio before that, grandfathering is provided for: there the one-year period would be preserved.

For your decision that is the decisive difference between the two direct-purchase variants. A lump sum paid in October or November falls entirely under the old law. A savings plan that starts in October and is meant to run for two years is spread across the cut-off: the instalments from 2026 would be protected, those from 2027 onwards would not. In tax terms, two groups of holdings thus arise within the same savings plan, and they have to be treated separately.

One thing remains important: the draft is a draft. Until promulgation in the Federal Law Gazette the cut-off date can shift, and the consultation period for the industry associations ended, according to the same report, as early as October 6, six days after it was sent out. What ends up in the law is decided by the Bundestag and the Bundesrat.

Exemption Limit, Record-Keeping Duty and the Reports From Trading Venues

Quite apart from the draft, the enforcement side shifted in 2026. Since January 1, 2026 the reporting obligations from the EU directive DAC8 have applied, implemented in Germany through the Crypto Tax Transparency Act. Providers domiciled or authorised in the EU report their customers’ accounts and transactions to the tax administration. For you that means: the assumption that a sale within the one-year period goes unnoticed no longer holds.

From that follows a practical duty which weighs more heavily with a savings plan than with a one-off purchase. Every single instalment is its own acquisition event with its own date and its own price. With a monthly instalment and a five-year term that is sixty events which you have to allocate on sale under the first-in-first-out method, that is, in the order in which they were bought. Anyone who does not have these records has an additional problem under the draft bill: without proof of the acquisition cost, a flat 50 percent of the sale proceeds is to count as the tax base. What this substitute assessment means in detail is something we wrote up on October 1, 2026 under crypto acquisition costs and substitute assessment.

A further point in the draft concerns the years from 2028 onwards: trading venues are then to pay over the tax directly, the way banks do with shares. The details and what the deduction means for your liquidity are in our article on withholding tax at crypto exchanges of October 1, 2026.

Lump Sum Against Savings Plan: The Calculation Over Ten, Five and One Year

The question of which of the two direct routes would have made more out of the same money can be recalculated against the actual prices. We evaluated the weekly prices of the Bitcoin against euro pair on the Kraken trading platform going back to 2013 and took the opening price for the start of each month. Two variants with identical contributions are compared: once 100 euros per month over the whole period, once the entire sum on the first day. Both are valued at the October 2026 opening price of 73,775 euros.

The picture is not uniform, and that is precisely where the message lies. Over ten years the lump sum beats the savings plan by more than elevenfold, because the 12,000 euros at 550 euros per Bitcoin bought a quantity that no later instalment could reach. Over five years from October 2021 the relationship reverses: there the starting price of 47,800 euros was close to the high of the time, the savings plan bought into the subsequent slump and ends up 1,845 euros ahead of the lump sum. Over the past year the gap is clearest. Anyone who deployed 1,200 euros at once in October 2025 at 101,066 euros holds Bitcoin worth 876 euros today, 27 percent less. The same sum in twelve monthly instalments produced 1,331 euros, a gain of just under 11 percent.

Why the Lump Sum Came Out Ahead in 88 of 98 Five-Year Windows

A single period can be luckily or unluckily chosen. We therefore ran the same calculation over every possible five-year window the price series allows: 98 windows, each 60 monthly instalments against a single payment of 6,000 euros, valued at the end of the respective window. In 88 of these 98 cases the lump sum came out ahead, in 10 the savings plan.

The reason lies in the direction of the market, not in a property of the savings plan. Bitcoin has risen across the entire price series so far. In a rising market, money that is invested earlier is invested for longer, and quantities bought early never become cheaper again at any point. The savings plan by definition holds back part of the capital and buys it in later at subsequent, on average higher, prices.

The ten windows in which the savings plan won share one property: their starting month lay shortly before one of the big slumps in each case. That is the real reading of this figure. The lump sum wins more often, but it also loses more clearly when the entry point is badly placed, and it demands a decision that nobody can secure in advance with data. The savings plan, by contrast, buys the uncertainty along with it and takes the question of the right day out of your hands. Which of the two kinds of risk you are more willing to bear is a question for you and not for the price series.

Two limits of this survey belong with it. The calculation is made without fees and without the spread, that is, without the gap between the buy and sell price, and without taxes. Both weigh more heavily on the savings plan, because it consists of many small purchases. And it values only today’s level. Any other valuation day delivers different figures.

Instalment, Interval and Fees: What a Bitcoin Savings Plan Depends On

If the decision falls on the savings plan, three levers determine how much of the money paid in actually ends up in Bitcoin. The minimum instalment at the providers available in Germany lies, according to the surveys by the comparison portals, between one cent and ten euros, and at most of the large houses at one euro. The interval ranges from weekly to quarterly, with a shorter interval strengthening the averaging effect and at the same time producing more individual events for the tax return.

What is decisive is the cost side, and it consists of two parts that have to be stated separately: the order fee and the spread. A fixed order fee of one euro is a side issue on an instalment of 500 euros; on an instalment of 25 euros it is four percent of the purchase amount, missing immediately. The spread comes on top and is not always described as a fee. Anyone who wants to invest a small instalment should therefore calculate the total costs as a percentage of their own instalment and not compare the advertised fee figure. The current terms of the providers are in our comparison of Bitcoin savings plans.

Since the EU regulation MiCA took effect at the end of December 2024, choosing the provider itself involves a hard checkpoint: a trading venue serving retail clients in the EU needs authorisation as a crypto-asset service provider. The authorisation says nothing about price performance, but it governs own funds, custody and complaint channels. Which houses hold it we list under regulated crypto exchanges. Fee structures change frequently, so it is worth looking at the provider’s price list on the day you sign up.

Crypto ETNs in a Securities Account: The Delivery Claim Decides the Tax Rule

The third route does not run through a crypto platform but through the securities account at a bank or broker. What is traded are ETNs, that is, collateralised debt securities on the Bitcoin price. In practice that has advantages: no key of your own, no additional account, purchase and savings plan through the familiar securities account screen, and the settlement lands automatically in the annual tax statement.

In tax terms this route is the most complicated, and the distinction hangs on a single feature: the delivery claim. If the product gives you the securitised right to demand delivery of the deposited Bitcoin, there is much to be said for treating it like direct ownership, that is, with the one-year period under Section 23. If that right is missing, what exists is a pure claim, and the income counts as investment income with flat-rate withholding tax, the solidarity surcharge and, where applicable, church tax, without any holding period. There is no conclusive determination by the tax administration binding for all products, and the classification will in the end depend on the specific prospectus. With larger sums that is the point at which a trip to a tax adviser pays for itself.

On top of that comes a risk the direct purchase does not have: issuer risk. You hold a claim against the issuing company. If the collateral is held separately in trust, that risk is small, but it is not zero, and it belongs in the trade-off against the risk of losing a key of your own.

Custody After the Purchase: Whoever Holds the Key Holds the Bitcoin

With a direct purchase the purchase is not the last step. If you leave the Bitcoin in the trading account, you hold a credit against the provider, and that provider’s solvency and security architecture are part of your risk. If you transfer it to a wallet of your own, you no longer carry that risk, but you do carry full responsibility for the key. There is no body that replaces a lost recovery phrase.

The size of the amount helps with the decision. On an instalment of 25 euros a month, a hardware device costs more in the first year than the holding it protects; there an account with an authorised provider is a defensible interim solution, as long as you do not run the two-factor protection over SMS. As soon as the holding grows into the four-figure range, the relationship shifts. A hardware device keeps the key permanently separated from the internet and releases payments only after confirmation on the device. In tax terms the transfer to your own wallet is not a sale and triggers no tax, as long as you remain the owner.

Position Size and Total Loss: The Risk Side of the Decision

Over its history Bitcoin has repeatedly lost more than 70 percent from its high and recovered afterwards. That this will happen again is not a forecast but the description of a property: this market knows slumps of that order. A total loss is possible, and it is covered neither by deposit insurance nor by a compensation fund. A bank’s 100,000 euros of deposit insurance applies to balances in euros, not to crypto assets.

From that follows no advice on the amount, but a test calculation you can carry out yourself: take the amount you want to invest and subtract 80 percent of it. If the difference remains an amount that does not touch your rent, your emergency reserve or a foreseeable expense, the position size is sustainable. If it does touch them, it is too large, regardless of which of the three routes you decide on. Anyone working on credit or with leverage leaves this calculation entirely, because there even a setback can lead to forced liquidation, long before a price recovers.

A final point on timing. The December 31, 2026 cut-off is a tax advantage for purchases that take place by then, but it is no reason to bring forward a decision you have not yet made on the merits. A holding that turns out too large under time pressure costs more in the next slump than the holding period ever brings in.

Investing in Bitcoin: Your Next Three Steps

1. Settle the route and the amount before you open an account. Decide first whether you want to deploy a sum at once or a monthly instalment, and check the figure with the test calculation from the previous section. Only after that does the provider question become concrete: terms and minimum instalments are in the comparison of Bitcoin savings plans.
2. Collect records from the very first transaction. File the date, quantity, price and fee for every purchase, ideally automatically. Anyone who only catches up on this at the point of sale pays tax, under the draft, on half the proceeds in case of doubt. Which programmes take over the allocation is shown by our overview of crypto tax tools and portfolio trackers.
3. Let the custody grow with the holding. Set a threshold above which you transfer the holding from the trading account to a wallet of your own, and stick to it. The devices and their differences are in the hardware wallet comparison.

(As of October 3, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)