I don't know if Germany has capital loss discounts, but in Australia at least, a capital loss can be used to offset a gain (or a future gain). So the fact that

I don't know if Germany has capital loss discounts, but in Australia at least, a capital loss can be used to offset a gain (or a future gain). So the fact that you can make a capital loss doesn't make taxing profits ridiculous. Forex trading is the most analogous thing to crypto trading, and it is taxed in a very similar way. And algorithmic traders absolutely are required to pay taxes on their profits. Encouraging people to not hold assets long-term (by making short profits tax-free as you suggest) is not a good idea -- it encourages speculation and speculative bubbles. Most countries treat long-term capital gains more favourably through tax discounts for that reason.