Gifting Bitcoin and Crypto This Holiday Season: A Guide

The holiday season is upon us, and with it comes the opportunity to spread joy and introduce loved ones to the world of cryptocurrencies. Gifting Bitcoin and other cryptocurrencies can be an exciting way to share the benefits of digital assets. In this guide, we'll explore how to give cryptocurrencies as gifts, the tax implications, and how recipients can securely store and manage their new assets.



1. Choosing the Right Platform: Gift card platforms like Bitrefill and eGifter make it easy to give cryptocurrencies as gifts. Bitrefill offers gift cards for over 1,600 brands, which can be purchased using Bitcoin, Ethereum, or other cryptocurrencies. Recipients can redeem these gift cards for products or services from the respective brands. eGifter, on the other hand, allows users to buy gift cards for various retailers using Bitcoin, Ethereum, or Litecoin. These platforms streamline the process of introducing friends and family to cryptocurrencies by enabling them to spend their gifts at popular stores.
2. Understanding Tax Implications: When gifting cryptocurrencies, it's essential to understand the tax implications. In the U.S., the IRS treats cryptocurrencies as property, not currency. When you gift cryptocurrencies, the recipient takes on the fair market value at the time of receipt. If the value increases, they may owe capital gains tax when they sell. The giver, however, does not incur a tax liability until they sell the gifted cryptocurrency. If the gift exceeds $15,000 in a year, the giver may need to file a gift tax return. Always consult with a tax professional for personalized advice.
3. Securing Gifted Cryptocurrencies: To securely store and manage gifted cryptocurrencies, recipients should follow these steps:
* Choose a reputable wallet that supports the specific cryptocurrency received.
* Enable two-factor authentication (2FA) on the chosen wallet.
* Keep private keys safe, preferably using a hardware wallet or a paper wallet.
* Regularly update the wallet software.
* Educate themselves on crypto security best practices.
* Consider diversifying the gifted cryptocurrencies into other assets, such as stablecoins or other cryptocurrencies, to spread risk and potentially increase returns.
4. Transferring Gifted Cryptocurrencies: To securely transfer gifted cryptocurrencies to a personal wallet or exchange, recipients should:
* Create a personal cryptocurrency wallet.
* Obtain the wallet address.
* Provide the wallet address to the gift giver.
* Wait for the transaction to complete.
* Secure the wallet by enabling 2FA and keeping private keys safe.



Storing gifted cryptocurrencies on an exchange exposes users to risks such as hacking, exchange insolvency, and regulatory uncertainty. In contrast, storing cryptocurrencies in a personal wallet, such as a hardware wallet, offers greater security and control. However, it also comes with risks, including loss or theft of the private key, which can result in permanent loss of funds. It is crucial for users to understand the risks and choose the storage option that best suits their needs.

Gifting Bitcoin and other cryptocurrencies this holiday season can be an exciting way to introduce loved ones to the world of digital assets. By understanding the tax implications, ensuring secure storage, and providing clear guidance on managing gifted cryptocurrencies, you can help your loved ones embark on a journey into the fascinating world of cryptocurrencies.