In investment, the term crystallization denotes the closing of investment positions. Investment positions incur capital gains or capital losses on an ongoing basis, but the capital gains and losses are only fully realized when investments are liquidated during crystallization.
For example, the value of shares in a stock may decline steadily after you buy them, but as long as you hold the shares, there is a chance that their value will increase. Only when you sell the shares for less than you paid for them are you making a final capital loss.
In the case of contracts for difference (CFDs), crystallization occurs when a CFD position is closed. When this occurs, a possible capital gain is added to the cash in your brokerage account, while a possible capital loss is deducted from the cash in your brokerage account.
In the case of real estate investments, crystallization occurs when an investment property is sold. The same applies to any other form of material investment.
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