Cryptocurrency isnt just about investing.
Thats because cryptocurrency is more than just a speculative asset its also a disruptive technology.
You need cryptocurrency and a crypto wallet to purchase NFTs.
About 38% of crypto investors with children under 18 said they’ve alreadyinvested in digital assets on behalf of their kids.
No Interest Til Almost 2027?
Vincent Zuniaga, a full-time artist in Orlando, started creating NFTs in November 2021.
It wasnt long before he saw the unique value of NFTs for both artists and collectors.
My Buy an NFT, Save a Manatee series is doing really well, he said.
The lure of authenticity and control is drawing more people to the world of NFTs.
According to The Penny Hoarders survey, 34% of cryptocurrency investors have bought an NFT.
NFTs can only be purchased using cryptocurrency, usually ethereum.
Purchasers also need a crypto wallet to buy and store their tokens.
People go, Wait, I need to get a crypto wallet to view this artwork?
How does that work?
For people who dont already use crypto, theres still a big knowledge gap there.
Gifting Crypto
Gifting digital assets to friends and family is also popular among cryptocurrency investors.
Another 41% of respondents said they plan to gift cryptocurrency in the future.
Sharing the wealth is great, but experts say recipients need to be aware of potential tax implications.
But if you turn around and sell that gift, its a taxable event.
Figuring out the cost basis can be complicated.
Over half of all surveyed cryptocurrency investors 54% said theyve made a purchase using crypto.
But buying stuff with bitcoin is usually a lousy idea, according to experts.
A widely held investment thesis for bitcoin is as a long-term store of value, like gold or diamonds.
Enthusiasts believe bitcoins scarcity only 21 million bitcoin will ever be mined will increase the cryptocurrencys value over time.
Its just not super convenient at the moment, Goodge said.
The IRS views crypto as an asset, not a currency.
Youre basically getting double taxed, said Thomas Kopelman, a financial planner and co-founder of AllStreet Wealth.
Consumers are responsible for keeping track of these taxable events.
Unlike traditional stock brokers, cryptocurrency brokers and exchanges arent required to send users any tax document summarizing trades.
If youre frequently using crypto to make purchases, figuring this out can become a daunting task very quickly.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
The overall surveys margin of error is +-2% at a 95% confidence interval.
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