Thinking of Gifting Crypto This Christmas? Here’s What to Consider

Crypto transactions are becoming more common due to their borderless nature. And with the festive season here, some are looking to gift digital assets to their loved ones. For beginners, however, the whole process of sending these modern Christmas presents might feel a bit complex. This article explains the main ways to gift crypto and how various jurisdictions regulate such transactions.

Choosing the right cryptocurrency for a gift

With millions of cryptocurrencies in existence, picking one could become a choice overload. For a Christmas gift, especially for someone new to digital assets, it is better to choose something familiar and stable rather than something new or experimental.

Bitcoin and Ether are the most common choices for gifting crypto because they are among the oldest digital assets and have broad wallet support. And as such, new users can manage them without going through complicated processes.

Newer or very low-priced tokens are often promoted with promises of fast gains. These assets tend to swing sharply in value and may have limited support for exchange. For a first-time holder, this can add confusion and stress rather than enjoyment.

Still, crypto gifts should be viewed as a personal gesture, not a guaranteed investment, given their volatility.

Crypto gift cards and vouchers

Crypto gift cards are one of the simplest ways to introduce someone to digital assets. They work in a familiar format and remove many early technical steps.

A gift card is purchased for a fixed cash amount, such as $50 or $100. Instead of store credit, the card represents that value in cryptocurrency. The giver hands over a physical card or a digital code.

When the recipient enters the gift code on the provider’s website or app, the cash value is converted into cryptocurrency at the current market price. The purchased crypto is then added to an account that is set up during the redemption process.

Gifting crypto through hardware wallets

For a larger or long-term gift, a hardware wallet adds a physical element and stronger security.

A hardware wallet is a small device that stores private keys offline. Since these keys never connect directly to the internet, the risk from online attacks is reduced. Control of the wallet equals control of the funds.

There are two main ways to gift crypto using a hardware wallet:

• The first option is to preload the device with the crypto asset before gifting. However, the recovery phrase should be kept safe, as anyone with it can access the funds. 
• Alternatively, the sender can gift the wallet unopened and help the recipient set it up.

Sending crypto directly through wallets or exchanges

If the recipient already uses crypto, a direct transfer may be the easiest choice. This method involves sending cryptocurrency from your wallet or exchange account to the recipient’s wallet address. It requires accuracy. Sending funds to the wrong address or network usually means permanent loss.

To receive crypto, the recipient opens their wallet or exchange account and selects “Receive” or “Deposit” for the chosen asset. This generates a public address.

Afterwards, the giver pastes this address into their own wallet or exchange under “Send” or “Withdraw,” selects an amount, reviews network fees, and confirms the transaction. A small test transfer is adviced before sending the full amount. This helps confirm that the address and network are correct.

Other digital gift ideas: NFTs

Apart from coins, another crypto gifting option is non-fungible tokens (NFTs). An NFT is a digital item in the form of art, music, or collectibles recorded on a blockchain.

Unlike cryptocurrency, NFTs are not interchangeable. Their value often comes from uniqueness rather than market price alone. For some recipients, this turns the gift into a keepsake instead of a purely financial asset.

Why recording the value at the time of gifting matters

Keeping clear records is important for tax and legal reasons. If someone receives crypto as a gift and later sells or trades it for a profit, they may have to pay tax on that gain. To work this out correctly, they need to know the value of the crypto and the date it was received. Having this information from the beginning makes future tax reporting much easier.

Important details include:

• The date the crypto was transferred
  
• The fair market value at that time
  
• The giver’s original purchase price and acquisition date
  
• Any fees paid
  
• Any gift tax paid by the giver, if applicable

Without this information, future tax filings become difficult and may lead to overpayment or disputes with tax authorities.

Tools and methods for tracking crypto gifts

Crypto tracking software

Crypto tracking software can make recordkeeping much easier. They track buys, sales, and transfers, then calculate gains or losses and prepare tax reports. These tools are helpful for both the person giving crypto and the person receiving it, especially if they plan to make more transactions in the future.

Examples of these tools include CoinTracking, CryptoTrader.Tax, and Koinly. These apps can connect to wallets and exchanges and automatically collect transaction data.

Spreadsheets

A manual spreadsheet also works, especially for simple portfolios. Common columns include:

• Date of transaction
  
• Type of transaction
  
• Amount of crypto
  
• Value in local currency at the time
  
• Fees
  
• Notes

Supporting documents

Keeping records such as receipts, exchange statements, and transaction IDs from wallets is important. Since user identities in blockchain transactions are private, extra documents help confirm who sent and received the funds.

To show that a gift has taken place, the crypto must clearly move from the giver to the recipient. Sending it to a wallet that belongs to the recipient helps prove this. Saving the transaction hash and block number also creates a clear record of when and how the transfer happened.

Tax treatment in the United States

In the U.S., gifting cryptocurrency is usually not taxable at the time of the gift. According to the recent tax law, a recipient can receive up to $19,000 without reporting. Figures above this level should be documented on IRS Form 709. However, reporting does not mean tax is owed. 

The excess amount counts toward the lifetime gift tax exemption of $13.61 million. Gifts to a U.S. citizen spouse are generally not reportable.

The recipient usually pays tax when the crypto is sold or traded. The original purchase price from the giver carries over as the cost basis. Crypto assets donated to a qualified 501(c)(3) charity may be deductible at fair market value. Transactions of $250 require a receipt. Meanwhile, donations over $5,000 have additional reporting requirements.

Tax treatment in the United Kingdom

HM Revenue and Customs treats cryptocurrency as an asset in the UK. As such, Capital Gains Tax applies to a crypto gift. However, spouses or civil partners are exempted.

Annual capital gains allowance for 2025 is £3,000. Above this amount, the government taxes 10% for basic-rate taxpayers. Tax for higher-rate payers could potentially reach 24%.

Crypto received as income, such as mining rewards or salary payments, falls under income tax. Employers paying in crypto must also handle National Insurance Contributions.

Tax treatment across the European Union

The EU does not have a unified crypto tax system. And as such, each member state has its own rules. Germany, for instance, treats cryptocurrency as private money. Gains from assets for over a year are tax-free. 

However, selling sooner may come with a 45% income tax, alongside a solidarity surcharge. Meanwhile, Spain taxes crypto gains as ordinary income, with rates ranging from 19% to 28%.

Final thoughts

Gifting crypto can be thoughtful and memorable, but it works best with preparation. Choosing well-known assets, using beginner-friendly methods, and explaining basic security steps help new holders feel confident.