Gifting can be daunting, especially if you have no clue of the likes and preferences of the person you want to present it to!
However, what if we told you that there was an option that would make the perfect gift for every receiver?
Yes, we’re talking of cryptos, a gifting option that’s both practical and unique.
The popularity of these digital assets has already taken a boom, making them the perfect replacement for those lotto tickets. Adding to it, prominent crypto projects like BTC and ETH keep hitting record highs, giving the investors a significant return on their investments.
But, with only 14% of Americans owning cryptos and some type of digital currencies, we understand how gifting them as presents could become a tough job for beginners. So, to help you figure it out here’s a walkthrough of the different steps in gifting cryptos to your family and friends.
Different Ways Of Gifting Cryptocurrencies
Thanks to their soaring popularity, cryptos are now an easy buy! Today, it’s possible for you to gift cryptos in not one but several different ways. Listed below are some of the common ways in which you might present it:
Buying gift cards is possibly one of the most convenient and effortless ways to present crypto tokens to your family and friends. Once you’ve decided on the crypto token you want to gift; the next step is to go to trusted payment processors that allow you to exchange your fiat for these cards.
For instance, you could easily head out to Coingate and purchase their Flipkart gift cards in exchange for your crypto or fiat money. Once you’ve processed the payment, you’ll receive a gift card of the same value. Similar to the operations of a standard retailer gift card, the recipient can redeem the tokens by entering the card details on the same website.
Another option is to gift crypto tokens via an exchange. Again, a feasible option for existing investors; here, all you do is transfer some of your tokens to the recipient’s wallet address.
However, if you’re new, you’ll have to sign up with an exchange, set up an account, and then decide on a payment method (preferably debit or credit card). Once your account is active, you can transfer the token to the recipient’s address.
Paper wallets are a more convenient, hassle-free gifting option. As the name suggests, these wallets come on paper and have public and private keys printed on them. In addition, some wallets might also come with a scannable barcode (or a QR code) that is created via an app.
Once you present it to anybody, all they need to do is scan and put the public and private keys to withdraw the cryptos into wallets of their choice.
You don’t always need to gift crypto tokens to enthusiasts. Sometimes it’s the related accessories that do the magic too! Therefore, next time you decide to gift something, try gifting the enthusiast a hardware wallet to store their funds. It can be a great gift in itself.
Things To Keep In Mind Before Gifting Crypto Tokens
While the idea of gifting sounds excellent, it is the last step that comes into the picture. So, to start, you must first keep a few things in mind. Some of which are:
Gone are the days when cryptos were taxless! Today, if you decide to gift a token to somebody, they should have proper knowledge of the taxes these gifts will attract. This is because the IRS considers Bitcoins and other similar crypto tokens equivalent to tangible assets.
Therefore, when you profit from them, these tokens are taxed much like stocks. Crypto gains within a year (short-term) are taxed at a similar rate as the ordinary income tax, while gains over a year (long-term) are taxed at a scale of 0-20%, depending on your income.
Takeaway Note: Gifting crypto tokens under the value of $15,000 isn’t taxable under the gift tax allowance act 2021.
When gifting tokens, keep in mind the charges that you attract. While many exchanges won’t charge you for transferring crypto from one wallet to another (if you’re both registered under the same platform), a certain fee is attached to it.
For example, established payment processors won’t charge you fees for storing or transferring from one account to another. However, it has some charges surrounding selling, buying, or converting cryptos.
Errors In Transaction
When transferring cryptos, ensure that you are attentive to the details! Since crypto transactions are irreversible, you’d want to ensure that every piece of information you put is correct, or you might send the tokens as a gift to some other crypto wallet.
Experts also suggest creating multiple accounts and first practice sending tokens to yourself before you can send them to others.
Be Open To Experiment With New Platforms!
When gifting cryptos to your loved ones, you don’t always need to stick to the traditional gifting options! Thanks to the increasing prominence of these tokens, today, we have several other financial applications venturing into cryptos.
Venom and PayPal, for instance, are some of the most famous platforms that now allow users to gift cryptos over a matter of clicks (at additional costs to the transaction). So wait no more, gift them the perfect present today!