Cryptocurrencies are no longer the preserve of fintech nerds. Even the least tech-savvy among us have heard of them, as their erratic price swings and price spikes make the news in almost every corner of the globe.
Opinions vary as to whether or not to invest in this asset class. Many experts warn that digital money like Bitcoin will never fully go mainstream and is, therefore, overpriced and destined to plummet in value.
Key Findings
- Cryptocurrency gifts can serve as a speculative investment or simply cash equivalent for online purchases.
- These digital assets are now fairly easy to buy and gift. Options include buying a gift card or exchanging cryptocurrencies.
- Once you have purchased a gift, find a safe offline location to store the information needed to access it, provided the recipient is not already a cryptocurrency investor.
- Cryptocurrency gifts made by an individual less than $15,000 are tax deductible until the recipient decides to sell them.
No matter what opinion you hold, the concept of cryptocurrencies cannot be completely discarded. Of course, they can quickly lose their value. safesun coin However, most people would agree that cryptocurrencies are interesting and are becoming more and more relevant.
A growing number of e-commerce companies are now accepting digital assets as a payment method, which means they can be used to make purchases and pay bills. Add to that the possibility that they could get a lot more expensive in a few years, and you have a potentially versatile gift.
What cryptocurrency will be a good gift?
In short, the best cryptocurrencies for a gift for the new year, birthday, etc. This:
- bitcoin
- Ethereum
- USDT
If you are at least slightly familiar with cryptocurrency, then there is no need to explain Bitcoin in this list – it is the first largest cryptocurrency and the most popular!
Ethereum is a cryptocurrency that ranks 2nd in terms of capitalization, and is considered silver in the world of cryptocurrencies (Bitcoin is gold).
But USDT (Tether) may be a mystery to you! Tether is a stablecoin (pegged to the US dollar), meaning 1 USDT coin is always equal to 1 USD.
There are reportedly over 6,000 cryptocurrencies on the market right now, xwp price making choosing one harder than ever.
If you or the person you want to gift don’t want something specific, then it’s best to opt for one of the more common, well-established options such as Bitcoin, Ethereum, and a couple of other coins.
The value of Bitcoin at the time of this writing was estimated to be in the thousands of dollars, which is likely beyond most people’s budgets. However, you don’t have to buy the whole bitcoin – usually fractions of the coin, the satoshi, are bought instead.
As an investment, cryptocurrencies carry a high level of risk and it is imperative to research your options before buying. Work on researching the coins that appeal to you the most, then weigh their future prospects and see if this will affect the price. Since this is a gift, it would be wise to think about what the recipient might want.
How to donate cryptocurrency: ways?
Thanks to their meteoric popularity, in part due to their speculative nature, cryptocurrencies are now much easier to buy. Here are some of the common ways to gift these digital assets.
Gift cards
Once the payment has been made, a gift card will be sent to you for the amount you have deposited. Similar to how standard retailer gift cards work, the recipient can redeem the gift by going to the same website and entering the details displayed on the card.
Crypto exchanges
Another option is to donate cryptocurrency through an exchange.
If you are not yet a crypto investor, you first need to:
- choose an exchange
- create an account – register
- choose a payment method: replenishment with cryptocurrency/replenishment with Fiat (if the exchange supports it) / purchases through an exchanger
Further, the purchased digital currency can be easily sent to the address of your donee’s wallet.
The most convenient exchanges where you can buy a cryptocurrency for Fiat are:
- Kuna (fiat input via Yu. Money, Qiwi, bank card) – KYC is not required.
- Binance (fiat deposits via: bank cards, payment services, P2P) – KYC required
You can also buy cryptocurrency through an exchange. Free monitoring of the best change exchangers will help you find the best exchanger.
Hardware wallet gift
You can also donate a hardware wallet (with cryptocurrency or just it). If the person to whom you want to give a gift has a cryptocurrency but does not have a hardware wallet – this will also be a very nice gift!
Hardware wallets start at 55 Euros! The best hardware wallets on the market are:
- Trezor
- Ledger
You can also buy cryptocurrency directly to these wallets, through the Exchange or an exchanger, as we described earlier in the article!
Storage of cryptocurrencies
Once you’ve bought a gift, you need to find a safe place to store it. It is possible to keep the coins on the platform where they were purchased, although it is generally recommended to move them offline where they cannot be easily hacked or stolen.
Once you create a paper wallet and print it out, ensure you don’t lose or damage it. If this happens, the donee can no longer access cryptocurrencies sent to that wallet address. It is also important to store it in a safe place – if someone finds it, they can access digital assets and steal them.
Hardware Wallets
A more secure storage solution is a hardware wallet. Hardware crypto wallets are, in fact, USB drives. They are small, waterproof, virus-proof, and are seen by many in the industry as the best place to keep private keys, the critical data used to authorize transactions on the blockchain network, safe and secure.
Physical coins
You can buy physical coins if you want the gift to be a little more beautiful. These coins are impressive and can be used to store digital currency.
Distribution of cryptocurrency to loved ones is usually not taxed except when the transfer exceeds the amount of gift tax. The tax office should only be notified when the recipient eventually sells the asset, and the capital gain or loss is realized.
If the recipient sells the gift within one year at a profit, they will receive a short-term capital gain that is taxed as ordinary income. After this date, it becomes long-term profit, which is taxed at lower capital gains rates.
The amount of the winnings is determined by how much was paid by you, the donor. In other words, if the coin was bought for $100 and then sold five years later for $500, then the recipient of the gift would be taxed on the $400 profit.
Make sure you write down how much you paid for the gift, as well as how much it cost when you handed it over. Without this information, the recipient would have to recognize a base cost of $0, which would increase their tax expense.
