5 Reasons To Gift Crypto This Christmas

17.12.2022
info

Christmas is coming! As December gets under way, chances are you’re turning your thoughts to the holidays. Where to buy your tree, when to start decorating, who you’ll be spending the holidays with – and, very likely, what presents to get for them.

If you’re stuck for ideas, and another pair of socks or a book don’t convey the necessary thoughtfulness when gift shopping for your nearest and dearest, why not consider setting them up with some crypto?

Giving digital assets is a little more unusual and imaginative than some of the standard gifts that change hands this time of year – and there might be hidden benefits, both for you and the recipient. 

How To Give Crypto

Assuming the person you’re giving to isn’t already comfortable custodying digital assets, then the best way to get them started with a small amount of crypto is probably creating a paper wallet with a seed phrase for an unique account you’ve generated for them. It’s also a good idea to write some brief instructions and warnings to make sure they understand they are in sole control of the wallet (assuming you don’t keep a copy just to be on the safe side). 

You can use a service like BitAddress.org to generate Bitcoin wallets. They’re created client side, and the site can be used offline, so it’s very safe. If you want to give multiple different assets – perhaps to get someone started with a small portfolio – you can use something like Ian Coleman’s BIP39 generator to create a single seed phrase and derive any number of different addresses for a large number of supported cryptos from it. Again, all the magic happens client side.

If you’re giving a larger amount, it’s probably best if you put in some safeguards, like storing the assets in a multi-sig address and sharing control between three or more people, one of whom could be yourself.

However you choose to do it, here are five good reasons for giving crypto this Christmas:

1. It's a fast and easy present

Stuck for ideas? If you’re active in this space, the odds are that you’ve got crypto at your fingertips. With nothing more than a computer or smartphone, and a printer – or even a pen and paper – you can create a new wallet, transfer some crypto to it, and run up a quick greetings card that gives the recipient all the information they need to access their new digital assets. If you want to make several at once, that’s also easy, because you’re simply reusing the same process over and over.

2. The market is (probably…?) at a low

There are no guarantees, but after a year-long bear market there’s a good chance we’re somewhere near the bottom now. Either way, $20 will buy a lot more crypto today than it would have done last Christmas. Since most (or hopefully all) of the damage has already been done, that means your recipient should enjoy more of the upside. Holding crypto through 2023 should be a more rewarding experience than holding it through 2022! And just maybe it’ll be worth a lot more in a few years, if they HODL...

3. Education is the greatest gift

Giving someone crypto can be about so much more than giving them money. Sure, at the simplest level they’re receiving digital assets with real financial value. But if you encourage them to dive down the rabbit hole, they’ll find that crypto is a multi-disciplinary space that touches on many, many different areas. 

They might learn about monetary economics, the Gold Standard, inflation and the Austrian school; various branches of mathematics, cryptography and computer science; politics, sociology and the global financial system; trading, technical analysis, risk management and building a diversified portfolio, and much, much more besides. In short, it’s eye-opening and might change the way they view the world forever.

4. There’s something for every budget and taste

While Bitcoin is the digital gold standard, and it’s a good place to start out, you don’t have to restrict yourself. You might give your lucky recipient 0.001 BTC (around $17), but a lot of people appreciate holding a whole coin of something. A full SOL would set you back less than that thousandth of a BTC, and even one LTC might be in your price range if you’re prepared to splash $70+.

If it’s someone with a sense of humour, you could look into some meme coins. 100 DOGE will cost you less than $10, while you can make anyone a Shiba Inu millionaire (Shibenaire?) for about the same. Alternatively, why not get creative with some NFTs?

5. It might even help your tax liability

It’s important to understand that giving crypto has tax implications. In many jurisdictions, when you make a ‘disposal’ of crypto or other assets, you are essentially realising their market value and crystallising any capital gains or losses you have made. A disposal might include:

  • Selling a crypto for fiat
  • Trading one crypto for another
  • Giving crypto to someone else
  • Permanently losing the private keys to your crypto, or having it stolen

Where there are capital gains, there is capital gains tax (though many jurisdictions have a tax-free allowance before you have to start paying this). However, after a year of plummeting prices, there’s a good chance you might not be in profit on the crypto you’re giving away. 

If your gift means disposing of crypto at a loss, you can often offset that against this year’s or next year’s tax bill (again, depending on jurisdiction) thereby lowering the amount you’ll pay – making it a nice little present to yourself, too! You should consult a tax advisor familiar with the rules in your country if you’re in any doubt, but you can check out our article on the tax implications of buying and selling crypto as a starting point. Merry Christmas!


Sign up to TimeX to buy digital assets and give the gift of crypto this Christmas!

Jassin
Content, PR
Comments : 0