5 FAQs every boomer needs to know before giving crypto as a gift

Giving crypto as a gift has become popular among younger generations, who are investing in it at much higher rates than their older counterparts. But crypto can make an excellent gift for anyone, regardless of their age! Older generations unfamiliar with crypto might have some questions about the process of crypto gift-giving and what to expect.

Below, we’ll answer five of the most common questions on giving crypto as a gift.

1. Will the value of the crypto gift increase like a savings bond or  stocks?

Crypto is most similar to stocks, where value is determined by the market. It’s impossible to say for sure whether any cryptocurrency will increase in value over a certain period. But in general, over the long term, you can indeed expect it to grow.

Crypto skeptics like to point out crypto hasn’t been around for very long compared to the traditional stock market, and it’s more volatile. But if you look at the long-term growth established coins like Bitcoin and Ether have had, you can expect the value of your crypto to increase over the years.

2. How difficult is it to create an exchange account to give crypto?

Signing up for an exchange account at well-known exchanges like Binance.US, Coinbase, and Gemini is very simple and even easier than setting up a regular bank account! All you need is your name, an email address and password, and your country and/or state. 

On some platforms, you will need to upload a photo ID to secure your account. Once your account is created, just add a payment method and then you can start buying and selling crypto!

3. What other ways can you give crypto without setting up an account?

There are other platforms you can use for giving crypto as a gift. These offer crypto gift cards that are similar to vouchers in that you pay a certain amount of fiat currency for the card. Then the recipient can redeem that amount for whichever crypto the platform offers.

However, there is a higher potential for scams when searching for crypto gift card sites online, so be sure to do your research or stick to an exchange.

4. Is giving crypto as a gift taxable?

If your gift is over the $15,000 gift tax allowance, you will have to pay taxes on it. Otherwise, anything below is free from tax. However, keep in mind the gift tax allowance increases every few years, so be sure to double-check if you plan on making a large gift. 

On the recipient’s end, they will only have to pay taxes once they sell their crypto. This works like any other asset, with the recipient paying a capital gain tax if they make a profit or facing a capital loss if they don’t.

5. Are crypto gifts secure?

There’s never a guarantee of avoiding hacks entirely. But if you take proper online safety precautions, you can be sure your crypto gift stays safe. These include setting up two-factor authentication, using a secure WiFi connection, never clicking any suspicious links in emails or texts, and using a VPN. 

To keep your crypto gift safe, make sure the recipient knows to take their crypto off an exchange and move it into a crypto wallet (preferably a hardware wallet if it’s a large amount of crypto).

Crypto gift-giving can be for anyone!

Giving crypto as a gift is a great choice for any of your loved ones, whether they are crypto enthusiasts or newbies. As digital assets become more popular, learning how to give crypto as a gift now will put you ahead of the game.