Everyone is talking about cryptocurrency these days, and it's easy to see why. After all, the value of Bitcoin (BTC) temporarily surpassed the $60,000 threshold earlier this year, and Ethereum (ETH) has quadrupled in value since the beginning of 2021. Of course, there are other cryptocurrencies currently making waves and helping at least some people rake in the cash, which continues creating hype among investors and everyone else.
But, there's one aspect of crypto investing that hardly anyone is talking about — the tax implications. This is partly because taxes are boring in general, but it's also because a lot of crypto investors have no idea what they're doing. And — for the record — the same problem is going to come into play this year regarding NFTs, or non-fungible tokens.
Cryptocurrency is one of the hottest topics in the financial news right now. Although it's a volatile market, statistics show that crypto investors have turned significant profits in the technology's early innings. Over the past few years, we’ve certainly seen a lot of people make a lot of money by buying and selling virtual currencies.
Perhaps you've already bought some cryptocurrency yourself. If so, you'll eventually need to find the right time to cash out on the cryptocurrency bonanza. But before you reach that point, you should think about how you’re going to deal with crypto taxes. That's right – if you sell for a gain, Uncle Sam will most assuredly want his cut. So, while the virtual currencies might not actually exist, the tax payments you'll need to make most certainly do.