How to Give Bitcoin or Another Cryptocurrency as a Gift – Motley Fool

How to Give Bitcoin or Another Cryptocurrency as a Gift – Motley Fool

Cryptocurrency may be the gift that keeps on giving.

If you’re looking for a gift that’s both different and practical, cryptocurrency could be a great option. Over 14% of Americans already own cryptocurrency and digital currencies edged even further toward mainstream adoption in 2021.

However, it won’t be the right gift for everybody. Before we get into how to buy crypto as a gift, let’s first consider some of the pros and cons of gifting digital currencies.

Pros:

  • Crypto can be versatile. More and more stores accept crypto payments, so a gift of Bitcoin (BTC) might be more versatile than a normal gift card. If the recipient doesn’t want to keep it as an investment, they can spend it or trade it.
  • This could be a gift that keeps on giving. Many people see cryptocurrencies as a form of investment. In time, your crypto gift might increase in value. If the gift recipient chooses to hold the crypto long term, you never know what it might be worth in a few years.
  • You can gift any amount of crypto. A single Bitcoin is worth around $50,000 right now, but you don’t have to buy a whole Bitcoin (or any other coin). In fact, you can give someone as little as $1 worth of BTC. The transaction fees might make that impractical, but it’s possible.
  • There are no supply chain issues. As stores and suppliers struggle to keep up with demand, there’s no chance of your crypto gift being out of stock or stuck in a warehouse somewhere.

Cons:

  • Cryptocurrencies can be extremely volatile. A $100 gift of crypto might be worth $80 by Christmas day, only to increase in value again before the new year. Be aware that 2022 will bring a lot of unknowns for crypto, such as regulation that could have a big impact on prices.
  • Crypto isn’t for everybody. Some people aren’t interested — or actively don’t believe in — these digital assets. While they could just convert your crypto gift back into dollars, there are transaction costs involved. And if they are not very tech savvy, you probably don’t want to give them that additional hassle.
  • It may not be as simple as it seems. In some cases, the recipient will need a cryptocurrency exchange account to receive the gift. These are relatively easy to open, but it’s worth considering the recipient. If they already struggle to keep track of multiple passwords, they may not want yet another account to manage.
  • There may be tax implications. Giving crypto as a gift is not a taxable event. However, if the recipient goes on to sell that crypto for a profit, they will have to pay tax on those gains. Keep track of what you paid for the crypto and what it was worth when you transferred it as this will help with …….

    Source: https://www.fool.com/the-ascent/cryptocurrency/articles/how-to-give-bitcoin-or-another-cryptocurrency-as-a-gift/

Cryptocurrency