Giving your friends and family cryptocurrency as a gift is an excellent way to show them you care. It’s easy to do, too, as many popular apps and exchanges offer simple gifting options. However, since crypto prices can soar or plunge quickly impacting the value of your gift, it’s important to know exactly what you’re doing.
Apps
A cryptocurrency gift can be a great way to celebrate a special occasion. These digital assets can be used to buy products and services online. They can also be stored as an investment, potentially increasing in value over time. Many games such as Chainers use special gifts for their users. You can give cryptocurrency as a gift by buying it on an exchange and then sending it to the recipient’s wallet. This is a simple and convenient option.Paper wallets are another popular method for giving crypto as a gift. These wallets contain all of the information your recipient needs to get their hands on the crypto you’ve gifted them, including a public and private key.
Transfer Money Through an Exchange
Cryptocurrencies make for great gifts because of their novelty and value. However, they’re also a highly volatile investment that can shed value quickly. Therefore, you’ll want to be careful when gifting Bitcoin or any other cryptocurrency. If you’re giving a cryptocurrency as a gift, consider using a crypto gifting service that’ll manage the account for your recipient or a wallet they can access through a financial app. This is a good way to get a beginner acquainted with the cryptocurrency world without having to worry about centralized exchanges or complex financial apps. Also, be sure to consider how you’ll handle gift taxes. This may affect the amount you can send
Paper Wallets
Cryptocurrency is a hot topic, and it’s now fairly easy to give someone a small amount of money as a gift. This money can be used to buy things online, and it’s possible that it could be worth more in the future.
There are several websites that sell crypto gift cards. Choose one that you trust, and give the card to the person you wish to gift. The recipient can then redeem the funds by downloading software and entering a backup seed phrase. The wallet will contain Bitcoin, and this cryptocurrency can be moved to a new address. This method of gifting is secure and anonymous.
Hardware Wallets
With cryptocurrencies edging toward mainstream adoption in 2021, gifting Bitcoin or other digital assets could be a smart move. While cryptocurrencies may be volatile, they can also grow in value over time.
As a general rule, it is best to stick with well-known currencies, like Bitcoin and Ethereum (ETH). However, you can also give a cryptocurrency pegged to a traditional asset, such as a stablecoin, which will usually have lower transaction fees. Another option is to buy a hardware wallet, which is small device similar to USB flash drives that hold addresses and keys securely. Trezor and Ledger are two major wallet makers that sell models starting at $60.
Crypto Gifting Service
Cryptocurrencies are making it easier than ever to buy and gift. However, given their volatile price, speculative nature, and sensitivity to hacking, it’s important for people considering this option to carefully weigh the pros and cons before doing so.
Gift cards are an easy way to give cryptocurrency as a gift. These look similar to standard retailer gift cards and allow the recipient to redeem a specific amount of cryptocurrency on a company’s website.
Alternatively, it’s possible to purchase and send cryptocurrencies directly to a recipient’s digital wallet address. However, this requires more technical knowledge. This method also exposes the recipient to exchange risks, such as service outages and security breaches.
Taxes
Cryptocurrency makes a great gift for friends and family, especially because it’s easy to send and receive. But it’s important to keep in mind that gifts of cryptocurrency may be subject to tax. In the US, gifts of crypto below $16,000 are not taxable. However, if the recipient sells the crypto for a profit, they will be required to pay capital gains taxes. It’s also important to note that crypto transactions cannot be reversed or changed once sent. So, it’s essential to double-check your wallet address before sending your gift. Lastly, it’s recommended to tag your tax-free gifts in Koinly so that they’re excluded from your calculation of capital gains tax.
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