Everyone these days has heard of cryptocurrency, but not everyone understands how it works or how to use it. If you have a friend or family member who is interested in Bitcoin, gifting them some BTC can be a great way to introduce them to the world of cryptocurrency.
However, when it comes to giving the perfect gift, it might seem like Bitcoin is a bit of a head-scratcher. How do you give someone something that doesn't even physically exist? In this article, we'll cover everything you need to know about gifting Bitcoin so that you can pull off the perfect digital present.
How To Gift Cryptocurrency
When it comes to gifting cryptocurrency, the process is actually quite similar to giving any other kind of digital gift. The first step is to decide how much you want to give and then find a reputable exchange or wallet that you can use to purchase the cryptocurrency. Here are the top ways to gift your digital assets to a friend or loved one.
Hardware Crypto Wallets
Hardwire crypto wallets are one of the most popular and convenient ways to store cryptocurrency. So if you're looking for a gift that will really wow your recipient, consider giving them a hardware wallet. These nifty devices allow users to store their private keys offline, making them virtually impossible to hack.
Popular hardware wallets include the Ledger Nano S and the Trezor. These wallets can be a bit pricey, but they're worth it if you want to give your loved one the gift of security and know that they're very interested in investing in cryptocurrency.
Paper Wallets
One of the most inexpensive ways to gift cryptocurrency is using a paper wallet. Paper wallets are simply Bitcoin private keys printed on a piece of paper. They're easy to create and only require you to have a printer and some Bitcoin.
To create a paper wallet, all you need to do is visit a site that supports paper wallets. Once you're on the site, simply follow the instructions to generate a new paper wallet. Once you have your paper wallet, you can add Bitcoin to it by sending BTC from your own personal wallet to the public address that's printed on the paper. Then, you'll give this printed wallet to your friend, who will be able to access the BTC by inputting the private key into their own personal wallet.
However, if they lose the piece of paper, they will lose access to the BTC, so it's essential to make sure they keep it safe.
Crypto Exchanges
An easier way to gift BTC is by using a crypto exchange like Coinbase or Gemini. These exchanges allow you to link your bank account or debit card and easily buy Bitcoin. Once you have BTC in your account, you can send it to your loved one's wallet by inputting their public address.
If the person you're gifting to doesn't already have a cryptocurrency wallet, you can easily create one for them on the exchange. Then, once you've set up their account, you can transfer the BTC from your own account to theirs.
Bitcoin Gift Cards
Bitcoin gift cards are a popular choice for those who want to give the gift of BTC but don't want to deal with the hassle of setting up a wallet or exchanging currency. Bitcoin gift cards can be purchased from various online retailers and can be loaded with any amount of BTC that you choose. The most popular platforms to buy a Bitcoin gift card includes:
Binance Gift Cards
When choosing a gift card, you can select a card design, add a message and select the card's value. The recipient will then be able to add the gift card to their own account and redeem the amount of crypto you've gifted them!
Coinbase Gift Cards
Coinbase, another popular cryptocurrency exchange, also offers Bitcoin gift cards. Coinbase gift cards can be purchased with BTC, ETH, LTC, and BCH and can be used to send your friends a special gift. It's important to note that in order to buy gift cards for Coinbase, you'll actually need to purchase them through WeGift, instead of the Coinbase website. While they won't be able to get crypto with the gift card, they can purchase goods at more than 120 retailers.
Biterica
Last, but not least is Biterica. Biterica is a bit different from the other gift card platforms on this list because it doesn't focus solely on Bitcoin. Instead, it offers various cryptocurrency gift cards, including BTC, ETH, LTC, and XRP.
To purchase a gift card from Biterica, simply select the crypto you want to gift, enter the amount, and checkout. The process is simple and only takes a few minutes. Plus, Biterica offers various card designs, so you can choose the perfect one for your loved one! Plus, it's one of the easiest ways to give the gift of cryptocurrency.
Bread Wallet
A popular cryptocurrency wallet, Bread Wallet, also offers a Bitcoin gift card. The cards can be purchased with BTC, ETH, LTC, and XRP and can be used to send your friends a special gift. The process is simple and only takes a few minutes. You can choose any amount from $25 to $500 for the recipient and add $10 to pay for the network fee. From there, complete the procedure and send it to your recipient in the form of a traditional paper wallet.
Physical Bitcoin
If it's essential to have a physical currency token, you can purchase a physical Bitcoin. These are essentially coins with a Bitcoin logo that come in various designs and colors. The best part is that the physical Bitcoin actually holds value, so it's an excellent gift for those who are interested in Bitcoin and cryptocurrency.
However, if the person loses the physical Bitcoin, it's gone forever and can't be recovered. So, if you're thinking about giving a physical Bitcoin as a gift, make sure the recipient knows how to keep it safe!
Other Ways to Gift Bitcoin
Besides the methods mentioned above, there are a few other ways to gift Bitcoin. Finally, we'll list a few ways that you can gift Bitcoin if the above options don't work for you or your loved ones.
Crypto Donations
Crypto donations are a great way to give back to those in need. You can donate to charities that accept cryptocurrencies on behalf of your recipient. These organizations use cryptocurrency to help fund various causes and make a difference in the world.
Plus, by donating crypto, you're helping to promote the adoption of the crypto and show others that cryptocurrencies can be used for good. Donations will not need to be taxed but still allow you to claim a deduction on your income tax. Consider donating on your friend's behalf as a gift for their birthday or holiday!
How Are Cryptocurrency Gifts Taxed?
Gifting cryptocurrency is a great way to share your love of technology with others. However, it's essential to be aware of the tax implications before you give crypto as a gift.
In the United States, gifts are only taxable if they exceed $14,000 in value. So, if you're gifting Bitcoin or another cryptocurrency that's worth less than $14,000, you won't have to pay any taxes on the gift.
This is because the IRS only needs to be alerted when the recipient sells the asset and makes a capital gain or loss on the cryptocurrency. However, if the recipient decides to hold onto the cryptocurrency, they will not have to pay any taxes until they sell it.
For example, if you gifted $14,000 Bitcoin to your niece and she sold it a year later for $20,000, she would only have to pay taxes on the $6,000 capital gain.
Risks and potential rewards
Gifting Bitcoin or another cryptocurrency can be a great way to give back to friends and family. However, there are a few risks to consider before you do so.
- First, it's important to remember that the value of Bitcoin and other cryptocurrencies is volatile.
So, if you're gifting crypto, the value could go up or down by the time the recipient receives it.
- Second, if you're gifting a physical Bitcoin, there's always the risk that it could be lost or stolen.
So, make sure the recipient knows how to keep it safe!
- Finally, remember that cryptocurrency gifts are taxable.
So, if you're gifting crypto that's worth more than $14,000, you'll need to file a gift tax return with the IRS.
Overall, gifting Bitcoin or another cryptocurrency can be a great way to show your loved ones that you care. Just make sure to consider the risks and rewards before you do so!
Conclusion
Gifting Bitcoin or another cryptocurrency can be a great way to show your loved ones that you care. Just make sure to consider the risks and rewards before you do so! If you're ready to gift crypto, there are a few different ways to do it.
You can give Bitcoin as a physical gift, send it as a digital gift, or donate to charity on behalf of your loved one. Whatever method you choose, just make sure to consider the tax implications and risks before you do so! Visit PayDepot today to get started with your next investment.
FAQ
How do I convert a gift card to bitcoin?
When you convert a gift card to bitcoin, you're essentially exchanging the gift card's value for bitcoins. To do this, you'll need to find a reputable exchange that supports gift cards. Once you've found an exchange, you'll need to create an account and deposit the gift card into your account. From there, you can convert the gift card to bitcoins and withdraw them to your Bitcoin wallet.
What is the best way to give someone a gift card?
The best way to give someone a gift card is to make sure they can use it easily. To do this, you'll need to find an exchange that supports gift cards and create an account. Once you've found an exchange, you'll need to create an account and deposit the gift card into your account. From there, you can convert the gift card to bitcoins and withdraw them to your Bitcoin wallet.
How do I gift Bitcoins on Coinbase?
I'm sorry, but at this time, Coinbase does not support the gifting of Bitcoins. Instead, you can send bitcoins to another person's wallet by using their address. To do this, you'll need to find the recipient's Bitcoin address and then send the bitcoins from your Coinbase account to that address.
How do I buy a Bitcoin gift card?
You can buy a Bitcoin gift card from a number of different exchanges. To find an exchange, you can use a service like Coinmama or Gemini. Once you've found an exchange, you'll need to create an account and deposit the funds into your account. From there, you can convert the funds into bitcoins and withdraw them to your Bitcoin wallet.
