Forget the sweaters, socks, and care packages. The best gift to give this year is crypto. No longer just for technophiles, giving someone crypto is an awesome way to introduce them to the world of crypto or help them grow their investments.
Why give crypto as a gift?
Cryptocurrency has been an exciting ride for everyone involved. Gifting crypto to new users, whether young or old, is an opportunity to step into the interesting world of cryptocurrency.
- Teach grandma about blockchain technology
- Start college fund (or video game money) for younger friends and family
- Give crypto-curious relatives the opportunity to take full control of their assets
- It can be used to buy almost anything
How to Gift Crypto with BitPay
Depending on your situation, there are a few ways to give someone cryptocurrency as a gift.
Gift crypto with paper wallet
If the person you’re gifting crypto to doesn’t have a wallet, you can create a paper wallet for them. A paper wallet is the most basic way to store and transfer crypto. As the name suggests, a paper wallet is a piece of paper with the wallet’s address and private keys printed on it, many times in the form of a QR code. Paper wallets are considered quite safe as long as they are kept in a private place away from fire and weather.
Once you’ve created and loaded the paper wallet, it can be printed and slipped into a card for extra holiday or occasion cheer. After being gifted, funds can be transferred to a new crypto wallet in the future or spent with one of the many companies that accept crypto. If less technically inclined, you may want to help someone set up a BitPay Wallet into which their crypto can be transferred. See our help articles on how to create a BitPay wallet and how to sweep (transfer) the balance of a paper wallet to a BitPay wallet.
Just remind your giftee that their paper wallet should be kept in a safe, dry place. If anything happens to the address or keys, the funds are gone!
Gift crypto with a hardware wallet
Hardware wallets are devices similar to USB flash drives which hold addresses and keys to your cryptocurrency. You may load crypto onto a hardware wallet and gift the hardware wallet to the lucky recipient. This option is a bit more technical and expensive than other ways to give Bitcoin as a gift, but the right person will appreciate it. Ledger’s Nano S is an ideal hardware wallet to gift to someone.
How to gift crypto to someone that already has a wallet
If someone already has a crypto wallet then gifting crypto is as easy as using BitPay Send. Simply open your BitPay Wallet app, enter their wallet address and the gift amount, and press send. Send Bitcoin or other crypto as often as you’d like no matter the occasion.
The only crypto wallet app you need to take control of your assets.
Which cryptocurrency makes the best gift?
Ok, you’ve decided to gift cryptocurrency. But you’re not sure which coin to gift. While the obvious answer is as many as possible, there is a more rational way to approach the question. Consider what that person may want to do with their crypto and go from there. You may also want to consider the stability of the coin. More established crypto, like Ethereum, will be more stable and less prone to fluctuations.
- Bitcoin – The largest, oldest, and most well known coin. Gift Bitcoin to the generalist who may hold some and spend some.
- Bitcoin Cash – Transaction fees on Bitcoin Cash are generally lower than Bitcoin, making it a great coin to swap and spend. Gift Bitcoin Cash to someone who appreciates low transaction fees and seeks an alternative to Bitcoin.
- Dogecoin – What started out as a joke became very real. Dogecoin experienced explosive growth not seen by other coins. Dogecoin makes a great gift for someone who wants to join the Dogecoin community and experience DogeWOW.
- Ethereum – As the second most popular cryptocurrency, Ethereum complements Bitcoin, instead of competing. Its technological use cases make it a great gift for the die hard fans of blockchain technology.
About paying taxes on crypto gifts
Within the United States gifting crypto below a value of $15,000 is non-taxable. If the giftee decides to sell within one year of receiving the gift then they would be taxed at short-term capital gains tax rate (taxed as income). After one year of receiving the gift, they may sell the crypto and only pay a long-term capital gains tax on the profit. For this reason, you will want to write down when you bought the crypto gift and how much you paid. Communicate this to the recipient for their records. We strongly recommend contacting a tax professional relating to all crypto-related tax questions and situations.