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People always want to trade at the best price in a market as volatile as cryptocurrency. Choosing the best alternative after manually comparing the pricing provided by other DEXs is one approach to achieve this. However, it takes a long time to complete that process.

In this article, let’s learn more about Matcha and its financial prospects.

What Is Matcha Crypto?

As a decentralized exchange built on Ethereum, Matcha aggregates liquidity from exchange networks like Ox Mesh, Kyber, Uniswap, Curve, and Oasis to offer customers the best pricing when trading tokens.

Many decentralized exchanges run on Ethereum, and Matcha stands out as having DEX’s most straightforward user interface.

Matcha crypto trading platform powered by 0x Labs and utilizes the Ethereum smart contract infrastructure to enable tokens peer-to-peer exchanges for users. Since it’s a DEX, users maintain full custody of their tokens during every trading process. 

To maximize the value users get from every deal, Matcha collects the best rates from an increasing number of liquidity sources. Matcha never retains the difference between quoted and realized prices, in contrast to certain other DEX aggregators, and transparently exposes all fees and costs related to trades.

There are no platform fees for trades at this time on Matcha. The transaction fee for each trade you make on Matcha is composed of an Ethereum gas fee and a 0x protocol fee (if 0x liquidity is used). Your total order fee will vary depending on which decentralized exchanges are used to generate the liquidity. For instance, the base price for each trade on most DEXs is 0.3%.

Who Are the Founders of Matcha Crypto?

Matcha is a product of 0x Labs. After developing the 0x protocol and assisting others in creating fantastic DeFi products for a few years, 0x Labs had a ton of fresh ideas for facilitating the entry of more individuals into interesting new markets. With this insight, 0x created Matcha, a straightforward decentralized crypto exchange made for everyone, to reinvent the exchange experience and lay the groundwork for onboarding the upcoming wave of cryptocurrency traders.

All types of value will be tokenized on open blockchains, according to 0x Labs’ vision. This includes fiat money, stocks, bonds, commodities, debt instruments, real estate, video game items, digital collectibles, software licenses, reputation, and a wide range of other things.

Why Was Matcha Crypto Created?

The continuous emergence of Automated Market Makers (AMMs) is one of the most revolutionary changes in the current decentralized financial landscape. However, due to the abundance of AMMs, aggregators like Matcha have become necessary.

At the moment, AMMs are the most widely used decentralized exchange. They trade token pairs using algorithms rather than order books and utilize smart contracts to build liquidity pools. Examples include Balancer, Uniswap, and Curve, all Ethereum-based.

There is often a price differential between the many decentralized exchanges at any given time since AMMs use liquidity pools to determine trading prices. Aggregators like Matcha have become very helpful because they combine all the networks to determine the best rate for the user.

Matcha was built to help users save money from multiple decentralized exchanges, find the best prices, and easily trade tokens peer-to-peer. 

Why Is Matcha Popular?

The homepage has a search area and token shortcuts, which is the first thing you’ll notice. On some exchanges, accessing the markets entails selecting the desired assets from two different dropdown boxes. Any token or combination you’re looking for may be easily entered using Matcha search, allowing you to enter the market and start trading immediately.

At some point, you’ll be able to trade thousands of possible pair combinations over hundreds of different assets. Therefore, Matcha optimized the platform so that traders may identify and move to any markets they’re interested in as quickly as possible with fewer interactions.

Token Shortcuts and a Search Field

To begin trading on other exchanges, users must navigate the trading website and select one or more tokens from two dropdown menus. However, the default search box on Matcha’s home page allows users to enter the assets they wish to trade and immediately be taken to the relevant trading market.

User-Friendly Language

For newcomers to the DeFi landscape, technical words while using DeFi services can be a barrier. Matcha recognizes this and converts each technical term into a user-friendly language. Users benefit from a better trading experience, avoiding any losses brought on by misunderstandings.

What Is Matcha Token?

At the time of writing, it has yet to be confirmed that Matcha has released a token. Although, there are rumors about a possible airdrop.

How Does Matcha Crypto Work?

We must examine three of Matcha’s internal ingredients to understand how Matcha works. Matcha searches all decentralized exchange (DEX) networks and individual market makers first to determine what price is best for you at that precise moment. Matcha uses intelligent order routing to ensure your trade is carried out quickly and effectively after the best price has been determined. Finally, we leverage meta transactions and gas tokens to further lower transaction costs for traders, saving you money on Ethereum gas fees.

Matcha collects liquidity from increasing sources, including 0x, Uniswap, Balancer, Curve, Kyber, Oasis, and others, in contrast to other exchanges that only employ one source of liquidity. Matcha gathers pricing information from all liquidity sources at the time of your trade, much like a media aggregator would (for instance, Google News or HuffPost for news, and MetaCritic or Rotten Tomatoes for reviews). 

To give you the best price/least amount of slippage, Matcha divides your transaction among various sources of liquidity via an automated procedure known as “smart order routing.” Larger trades benefit the most from smart order routing, where a single source is unlikely to provide you with the best value. 

DEX Aggregation & Smart Order Routing

To find the most affordable pricing, Matcha combines all of these networks. As soon as the optimal rate is found, Matcha’s order routing algorithm automatically distributes transactions throughout these several DEXs to maximize the overall return for traders. Smart order routing is the name of this procedure.

To help travelers find the greatest offers, Matcha goes one step further by executing a transaction instantly after the best price is identified, relieving customers of the burden of worrying about price shopping when they wish to trade.

Meta Transactions & Gas Tokens

For traders to trade without being concerned about Ethereum network congestion, 0x Labs has been experimenting with a number of various techniques to lower fees. Meta transactions, commonly referred to as gas-less deals are the first.

Meta transactions make it possible for traders to communicate with Ethereum without paying gas fees, which results in a seamless trading experience since customers no longer need to comprehend how blockchains operate or the workings of the fee market. To help traders pay their gas fees, Matcha can sign and authenticate transactions on their behalf.

The use of gas tokens, which enables Matcha to harvest tokens and lock in low gas prices to be used when gas prices rise, has also been investigated by 0x Labs. Matcha does not apply these methods to every deal — it is important to keep this in mind.

Is Trading on Matcha Safe?

It is quite safe to trade on Matcha. The 0x v4 smart contracts Matcha employs have undergone auditing by ConsenSys Diligence and comprehensive testing by 0x Labs. 

Additionally, when you do a deal on a decentralized exchange like Matcha, as opposed to a centralized exchange, where your tokens may be mismanaged or lost, you maintain full custody of your tokens throughout the whole trading process.

Bottom Line

Matcha makes the process simple, even if decentralized finance can be intimidating for some individuals, especially when trying to ensure you’re receiving the best bargain possible. Finding the best trading price on Ethereum is now achievable with just a few clicks, thanks to Matcha’s integration of the top decentralized exchanges on one straightforward interface.

Matcha wants its users to always feel knowledgeable and in charge when using the platform. In addition to protecting you and your money, Matcha ensures full transparency about fees and the current state of the market.

Nowadays, being connected and immersed in the digital world is part of everyday life. From hours of trawling through the internet, watching cat posts on Instagram or Ask Me Anything (AMA) Videos on YouTube, and stalking well-known celebrities’ Facebook or Twitter accounts, we’re all living our lives behind a screen.  However, whilst the internet helps us stay connected with friends, make money online, or enjoy our free time, sometimes we genuinely want to step away from the screen of our mobile phone or iPad for a little bit of digital detoxing, helping us pursue our life goals, enjoy our relationships, and much more. Moreover, we often face lengthy app interruptions or internet connection problems forcing us to re-imagine life without our smartphones or other tech devices.

So, the next time you’re faced with the impossibility of staying productive when dealing with these difficulties or you have no clue how to kill time when your Wi Fi is down, don’t worry or feel lost, instead check out our backup plan for staying on top of your game when your favorite apps go down.

So without further delay, let’s look into fun things to do on your phone or other devices while waiting for the Internet connection to be back!

1. Read Articles Offline

If you enjoy reading articles, you can prepare by installing Pocket, which allows you to save your favorite articles, tweets, recipes, etc., to read later. While coming across an item on your smartphone that you might want to read later, select Pocket from the share option and store it. Additionally, you can use the app’s Discover feature to access a curated selection of articles depending on your interest. Download Pocket’s browser extension if you’re working on a PC.

Newsstand app, available for both iOS and Android, is another good app for downloading newspapers and magazines, which you can read when you don’t have an internet connection. It’s a single place where you can keep your free and paid subscriptions. Moreover, it saves entire publications and downloads new content when you have internet for offline reading later.

2. Go for a Walk

Going for a long walk may sound obvious, but it’s basically one of the simplest (and cheapest) things you can do when you want to give up your mobile phone, computer, and other devices for a brief time. Getting outside for some fresh air, whether it’s a leisurely stroll around your neighborhood park or a fast walk to a friend’s house nearby, will be helpful for letting go of the stress that stems from constant connectivity. Moreover, you can go for a walk with your mom or friend and take advantage of real-life social interactions while simply talking or discussing ideas with them. Some other great digital detox ideas are to play with your dog in the nearby park or go for a bike ride to get lost in nature or the city.

3. Make Some Phone Calls

Consider all the calls you need to make but haven’t had the time to prioritize. Do you need to book a haircut? A doctor’s visit? A veterinary examination for your dog? When was the last time you called your parents? Surprise your friend with a call and talk about your next meet-up or lend an ear and listen to what they have to say instead of DM-ing or tweeting them. If your internet is down, but you still have cell service, take a few minutes to cross a couple of these numbers off your list.

4. Make a To-Do List

You may be disconnected right now, but your internet connection will, of course, be restored sooner or later. So, this is a perfect moment to grab a pen and a piece of paper and make a to-do list of tasks to complete, including effectively organizing and prioritizing the tasks. You can also plan a get-together to never forget, such as a party with friends or a picnic or a meal plan for the week.

Alternatively, several to-do-list applications, such as Google Calendar and Evernote, can still be used while you are offline. You simply need to be logged in to Evernote before you lose your internet connection, and whatever you enter while offline will be synchronized the next time you connect.

Any.do is another task management app that provides the best tools for perfectly organizing to-do lists and managing your calendar. It has a great offline productivity app that makes any tasks you’ve already synced with your phone or computer available, and any changes you make will be uploaded to your account whenever you next have a connection. So make it a point to take control of your to-dos by keeping track of them.

5. Listen to Podcasts Offline

Podcasts are one of the most popular ways to get information or entertainment these days, as you can listen to them in the car, at the gym, etc. However, if you don’t have an internet connection, you can still listen to podcast episodes; it just requires a little planning.

Individual podcast episodes can be downloaded (or “saved”) to your iOS device using Apple’s Podcasts app (which you can get through iTunes if it isn’t already on your device). This allows you to listen to podcasts even when you’re offline. So, to prepare for your commute or other times with no access to the internet, we recommend downloading a large number of podcast episodes in advance.

To store an episode on the Podcast app, follow these steps: Find your podcast episode, click the three dots to the right of the title, and select “Save episode.” The download may take a few minutes to complete. Once the podcast is downloaded, you can listen to it online or offline from the “My Podcasts” tab.

If you have an Android smartphone, you can listen to podcasts both online and offline with the Stitcher app. To listen to previously downloaded podcast episodes without an internet connection, use the “offline mode.” You can either download these episodes individually or configure Stitcher to download new episodes of podcasts you’re subscribed to whenever you have internet access.

6. Take a Break

Why not take a break and relax when you don’t have internet access? Taking breaks has been proven to increase productivity by enhancing alertness, focus, and work speed.

Take a stroll, nap, meditate, spend a little time reading, or meet a coworker for coffee and speak about something other than work. We propose the free software Headspace (available for iOS and Android), which will walk you through the fundamentals of meditation in just 10 minutes.

During detoxing from digital devices, you can also cook new things, write a blog post on paper, practice your forgotten skills, learn a new language, or how to play the piano, etc.

7. Hold an Unscheduled Staff Meeting

Did your internet go down when everyone was at work? If you enjoy engaging with other people but want to keep things work-focused, an internet outage might be the ideal moment to gather the team to brainstorm, check up on the progress of everyone’s projects, or discuss scheduling or concerns that you might not usually have time to catch up on.

8. Download Apps to Watch Offline

When it comes to entertainment, video games aren’t your only option. You can also download apps to your phones for practically every streaming service available to watch your favorite shows wherever you are. Some services will allow you to download episodes of your favorite series to your device so you can watch them without internet connectivity or after exhausting your data plan.

9. Write Thank-You Notes

While you’re disconnected, why not be thankful for all the beautiful things in your life or handwrite a few thank-you cards to folks who’ve made a difference in your life?

Even if you don’t have any stationery on hand, you can write down the thank-you notes on a piece of paper to transcribe into a finer piece of stationery once you get it. Here’s a Hallmark thank-you note template to get you started.

10. Organize Your Space

What better opportunity than now to finally get that cluttered drawer under control or look through old stuff and donate old clothes to charity? Keep your mind (and hands) busy for at least an hour by cleaning out and arranging your room/drawer, kitchen, etc.

No matter how well-organized you are, chances are you still have a mountain of outdated documents cluttering up your home office/office desk. Pull out your paper shredder and help yourself by decluttering your desk (and mind). Unsubscribe from mailing lists to free yourself from the burden of deleting emails, update your contact list and delete listings you don’t ever contact, connect your email accounts to send and receive email from your smartphone, etc.

11. Make a Playlist

While you may not be able to access the songs individually when you’re offline, depending on how you listen to music, you can still create a playlist to enjoy when the internet is down. If you use iTunes and have already downloaded the music you wish to listen to, you can create a new playlist at any time, whether you’re connected or not. Spotify’s “offline mode” function available to premium customers enables you to create and listen to playlists offline; however, you must connect to the internet at least once every thirty days to save your offline music preferences.

Are you ready to take control of your crypto investments and make the most out of them, even during the crypto winter? Cryptocurrency investing can be stressful during market downturns, but understanding tax-loss harvesting may help you reach the next…

More than 10 years have passed since the introduction of Bitcoin. During these years the segmented cyberpunk and cryptographic movements evolved into the Crypto community. Nowadays, the Crypto community has a prophet – Satoshi Nakamoto – symbols and slang – a specific language generated by crypto supporters.

Words such as mooning, shilling, funding, “pump and dump”, FOMO, and DYOR –  the list goes on  – are commonly used as the slang of crypto enthusiasts. However, HODL is by far the most common of these terms and one to which almost all crypto traders can relate.

HODL is a term used by crypto investors which means they’re holding Bitcoin or other digital assets for an extended period, focused on the long-term outlook and regardless of the short-term market fluctuations. If you’re wondering whether HODL is a rewarding investment strategy helping you navigate extreme fluctuations in the crypto market, we’ve got you covered. This article will give you an in-depth understanding of the HODL meaning and answer such questions as “what does HODL mean” and whether you should use it as an alternative to profiting from short-term trades.

Let’s get right to it!

What Is HODL?

HODL originated from an almost decade-old typing mistake. On 18th December 2013, a user with the name “GameKyuubi” posted on the Bitcointalk online forum titled “I AM HODLING.” In the crypto forum, GameKyuubi described what a bad trader he was and how he planned to “hold” his Bitcoin (BTC) investments. He concluded that the best course was to hold since “You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.” 

This four-letter typo embodies the idea that blockchain and crypto will transform society and unlock huge resources for the people who continue to trust in crypto even during the moments of difficulties. The term “HODL” now jumps up whenever the crypto market drains and sends the message to holders not to sell.

In no time, the HODL meme spread among crypto traders throughout crypto markets. The HODL community encourages other investors not to sell their crypto when prices rise or even when crypto prices fall during a bear market. As the Bitcoin price in 2013 was notoriously volatile, Bitcoin investors found the buy-and-hold strategy rewarding. New investors are the ones most likely to profit from this type of crypto strategy, giving them enough time to explore the crypto industry.

Crypto enthusiasts have taken what was clearly a misspelling of the word “holding” and described it as an acronym for “hold on for dear life,” referring to the cryptocurrency strategy of not selling your digital assets even amid market volatility. While this is not how the term originated, this explanation expresses the real investment strategy HODL represents.

It’s also worth noting that HODLing works the same way it has traditionally worked for investing in the stock market when the guideline is to HODL stocks for at least five years to benefit from your investments.

Is HODL A Good Investing Strategy?

Now that we have a good idea of what HODL means let’s discuss whether it’s the right approach for you. Investing in digital currencies is risky due to their price volatility, and the risk becomes even greater because the crypto market is unregulated. In this sense, HODLing crypto has proven to be very profitable for long-term gains in popular cryptocurrency tokens such as BTC, ETH, DOGE, etc.

However, this isn’t the case for most cryptos with no long-term prospects. No matter how hard crypto investors might hold on for the dear life of these tokens, they might still end up becoming worthless, generating a loss for investors who employed the HODL strategy.

Additionally, many crypto investors apply the HODL strategy toward their trades because they believe that blockchain technology and blockchain assets will eventually replace fiat money — and that HODLing their assets will lead to value appreciation in the long term.

As you can see, HODLing crypto is not a one size fits all investing strategy, and you must make a well-informed decision about which tokens to invest in and whether to HODL tokens or sell them when the price increases.

When Should Crypto Investors Use HODL Strategy?

Whether HODLing is a promising approach for you depends on your experience and goals as an investor. If you’re a day trader hoping to profit from the rapid price swings in short-term trades, then HODLing will mean missing the opportunities to benefit from short-term price fluctuations in the crypto market.

However, we’ll suggest HODLing if you wish to build wealth in the long term, given you choose the right cryptocurrency tokens for long-term investment. Moreover, you can HODL based on the belief in the cryptocurrency’s mass adoption.

HODLing also has several benefits if you’re new to the cryptocurrency market. It will save you from the risks of short-term investing strategies that might make money faster but at the cost of a steep learning curve. It will also help you make money from your crypto investments while taking your time to get trading experience.

The disadvantage of HODL is the amount of time needed to make a profit and the fact that the investors miss the opportunities to benefit from short-term price fluctuations in the crypto market.

What Is the Best Crypto Investment Strategy?

The high volatility of cryptocurrency prices and the recent collapses of LUNA, FTX, etc. make crypto investment a risky endeavor, so what investment strategy is best for cryptocurrency investors to adopt?

The answer is investing in a diversified portfolio to mitigate risks and reduce losses. Once you build your portfolio, you can lend your crypto to a liquidity pool to earn more tokens, earn rewards through staking, etc. HODLing will also give you time to get investing experience required for short-term trading. And, in case you decide to simply HODL, thoroughly research the token you’re investing in and ensure it has long-term value.

Crypto Acronyms You Need to Know

Here are some of the acronyms widely used by the crypto community and associated with HODLing:

FUD: Fear, Uncertainty, and Doubt. HODL investing can help investors control the emotions associated with FUD.

FOMO: Fear Of Missing Out refers to people jumping into trades when a crypto price is at its highest. HODL investing can help investors control the emotions associated with FOMO.

Diamond Hands: Extreme form of HODLing.

Paper Hands: Refers to people without diamond hands.

Final Thoughts

HODL strategy helps crypto investors to escape from the crypto market’s high volatility and not move with the market sentiment.

In the cryptocurrency market, prices alone can be a misleading indicator for evaluating a project’s true potential and value. Cryptocurrency prices may rise and fall dramatically based on factors such as changes in circulating supply, public enthusiasm, etc. This is why investors use market capitalization as a crucial measure for evaluating and ranking assets and determining their growth potential. Larger market caps generally indicate more investors, relatively more stability, and more influence in the crypto space. 

This article will delve into the question of “what is crypto market cap” and how to use it to compare the total value of one cryptocurrency with another to make more informed investment decisions.

Let’s get right to it!

What Is Crypto Market Cap?

Cryptocurrency market cap measures the market value of a cryptocurrency and is determined by the current market price of a token or coin multiplied by its circulating supply. Investors can rely on the market cap as a reliable and crucial piece of data that can significantly increase their chances of success.

Market cap indicates data on any given cryptocurrency, including its market position and dominance compared to other cryptocurrencies. That’s why it’s considered a more precise metric than the cryptocurrency price and is used when ranking cryptocurrencies.

https://youtu.be/ziQwtcNUIaU

High market cap cryptocurrencies are more reliable and give you more confidence, while low market cap coins are seen as speculative and risky, yet potentially lucrative projects.

Pro-tip: It’s crucial to differentiate whether one uses FDV or circulating supply as a metric. FDV, or a fully diluted market cap, is calculated based on the total number of coins, not just the ones in circulation.

Another alternative method includes the maximum supply, where market capitalization is calculated by multiplying an asset’s current price by the maximum number of coins that could ever exist. However, not only a higher circulating supply does affect the price of cryptocurrencies, but also some coins have no upper limit.

Factors Affecting the Market Cap

The factors that affect market capitalization are supply and price. 

Supply

The cryptocurrency market cap is affected by the supply of the given cryptocurrency. When demand increases faster than supply, the price increases, potentially impacting its overall market cap. Bitcoin, for example, has a fixed supply of 21 million bitcoins – its supply is scarce, and this scarcity drives its value up. Others, like Ethereum, don’t have a fixed total supply, but some ETH is burnt or sent to an unrecoverable address on the blockchain to prevent the circulating supply from growing too large. As a result, the supply of Ethereum in circulation is now declining. Some other cryptocurrencies created by companies have an unlocking schedule. To create scarcity and maintain value, only a portion of their total supply goes into circulation at the time of their initial coin offering, and the rest will unlock over a set period.

Price

Even when a small number of coins is in circulation for a given cryptocurrency, its market cap will rise significantly if the price is high. A cryptocurrency’s high price, even with a low circulating supply, leads to a large market cap. Conversely, if a cryptocurrency has a high circulating supply but its price is low, it may not have a large market cap.

How to Use Crypto Market Cap as an Investment Tool?

Now that you know everything about the crypto market cap let’s understand how to use it to your advantage to make well-informed investment decisions. 

Cryptocurrency Market Cap Classification

If you’re looking to invest in a relatively stable cryptocurrency, then select the ones with the highest market cap. We can break down cryptocurrency market cap sizes into three categories:

Large-Cap Cryptocurrencies

Digital currencies with a market cap of more than USD 10 billion are considered large-cap cryptocurrencies. These are considered low-risk investments because they’ve demonstrated sustainable growth and have higher liquidity. Their prices are also less likely to rise or fall drastically. Some examples are BTC, ETH, USDT, BNB, USD Coin, etc. 

Mid-Cap Cryptocurrencies

These are cryptocurrencies with market caps between USD 1 to 10 billion. The medium-cap segment is considered high-risk and high-reward due to its untapped potential. Some examples include Polygon (MATIC), Internet Computer (ICP), Axie Infinity (AXS), Stellar Lumen (XLM), VeChain (VET), Dogecoin (DOGE), Shiba Inu (SHIB), Litecoin (LTC).

Small-cap cryptocurrencies

These are cryptocurrencies with market caps of less than USD 1 billion. While these projects carry the highest levels of risk, they can also be extremely rewarding. eCash (XEC), NEO, USDD, Bitcoin Gold (BITG), and  Nord Finance (NORD) are some of the exciting small-cap cryptocurrencies.

Crypto Weighted Market Cap Strategy

A weighted market cap strategy means you put a proportional investment into each asset based on market cap. So, for example, to invest $100 in the two biggest cryptocurrencies, Bitcoin and Ethereum, you must take the total market capitalizations of both, then divide out the percentages each crypto holds in that total (71% Bitcoin and 29% Ethereum). Accordingly, you’d invest about $71 in Bitcoin and $29 in Ethereum.

Final Thoughts

A crypto market cap is an important metric that indicates the asset’s market value and the investors’ trust in the project. Along with such basic parameters as the cryptocurrency’s price, circulating supply, hashrate, and trading volume, a market cap enables you to assess the cryptocurrency’s performance before investing.

Please compare the total value of cryptocurrencies, the market trends, a cryptocurrency’s stability, and your own financial situation when weighing the risks of any investment. Cryptocurrency is a highly volatile market sensitive to secondary activity, do your independent research, obtain your own advice, and practice due diligence before interacting with smart contracts.

You can find the current price, charts, price statistics, market cap, total supply, max supply, circulating supply, 24h trading volume, etc., of different cryptocurrencies, including new coins, and get updates in real-time on CoinStats, one of the best crypto platforms around.

You’re welcome to visit our CoinStats blog to get a broader perspective on decentralized finance and how it seeks to empower people. You can also read our articles, such as What Is DeFi, explore our in-depth buying and staking guides on various cryptocurrencies, such as What Is DeFi Staking, How to Stake MATIC, How to Stake Ethereum, How to Buy Cryptocurrency, and learn more about wallets and exchanges, portfolio trackers, etc.                                                  

The crypto industry is continuously gaining popularity due to such notable advantages over traditional money as decentralization, privacy, security, accessibility, fast transaction speed, low charges, and more. You might be engaging with cryptocurrencies as a vehicle for exchange or a store of value; or benefiting from DeFi’s transparent, secure, and inclusive financial services. Whether you’re receiving cryptocurrency as payment, exchanging different cryptocurrencies, selling assets, staking, trading, and mining crypto to make life-changing money, achieve financial freedom, and earn passive income, or simply collecting NFTs, understanding your crypto taxes is paramount for avoiding an IRS audit and substantial fines related to tax fraud. The taxation policies differ depending on your location, the type of digital assets you’re holding, your profit and losses, etc. 

For example, U.S. law deems cryptocurrencies as capital assets subject to capital gains and capital losses, just like stocks or bonds.

So how much is crypto taxed? If you’re wondering which transaction is considered a taxable event and trying to figure out the complex tax landscape marked by digital currencies, we’ve got you covered. This article will tell you everything you need to know about your crypto taxes, how your gains and losses in crypto transactions affect your taxes and demonstrate how to navigate cryptocurrency tax implications successfully.

Let’s get right to it!

What Are Crypto Taxes?

The crypto economy achieved a market capitalization of more than US $3 trillion in 2021, i.e., more significant than Microsoft’s market valuation at $2.52 trillion and Apple’s $2.47 trillion market cap. DeFi introduces decentralized low-cost, high-speed transactions, but it also makes it difficult for tax authorities to come to grips with the exponential growth in digital assets. While precise guidelines on crypto taxes on the purchase, ownership, and sale vary widely between jurisdictions, in the U.S., the IRS treats virtual currencies as property and classifies cryptocurrency transactions as taxable by law. Therefore, users must report any taxable event, with failure to do so resulting in penalties.

You owe taxes when you sell, trade, exchange virtual currency, or make a profit through crypto in any way. The different types of taxable events for cryptocurrency transactions are purchasing goods or services using crypto, trading different kinds of cryptocurrency, or selling crypto for fiat currency. Additionally, if you send crypto to your friends, family, or loved ones as a gift, you’ll need to file a gift tax return if it exceeds $15,000 per recipient. However, these are only considered taxable income if your crypto’s value has increased. To determine if you must pay taxes, you need the cost basis, i.e., the total amount paid to purchase your crypto, and compare it to the crypto’s sales price. If you recognize a loss, you can deduct that to lower your taxable income by a maximum of $3,000, with additional losses to be carried over to future years. You can also offset your capital losses against your capital gains to reduce your overall tax bill.

Crypto tax rates depend on your income, tax filing status, and the length of time you owned your crypto before selling it. If you held it for 365 days or less, then you generally pay short-term capital gains taxes, which are equal to income taxes, i.e., the same tax rates you pay on all other income – 10% to 37% for the 2022-2023 tax filing season, depending on your income level. If you have owned it for longer, you pay less, i.e., long-term capital gains taxes ranging from 0% to 20%, depending on your income level.

These taxes apply even if you use crypto to make purchases. Learn more with this IRS worksheet and the IRS website for the latest information about virtual currency gains.

Since 2021, IRS Form 1040 asks recipients if they have received, sold, exchanged, or disposed of another financial interest through virtual currency at any point throughout the year. It has also been clarified to specify only taxable events, including receiving cryptocurrency as payment, airdrops, exchanging different cryptocurrencies, selling assets, and earning from mining and staking. It’s important to note that if you’re self-employed and running a crypto mining business, you’ll also need to pay Self Employment Tax to cover your Medicare and social security contributions.

What Is Crypto Income?

Crypto income is taxed as ordinary income at its fair market value on the date the taxpayer receives it. You must keep records of all your cryptocurrency transactions, including how much you paid for crypto, how long you held it, and how much you sold it for, as well as receipts for each transaction and note the fair market value of the cryptocurrency when it was used to get an idea of how much tax you owe. While buying cryptocurrency isn’t a taxable event, selling it is considered a taxable transaction. Here are the most common examples of what is considered crypto income:

• Mining or staking rewards. 
• I am receiving crypto as a mode of payment for goods or services. 
• Airdrops
• Earning through play-to-earn games.
• Financial interest earned through lending pools. 
• Earning through liquidity pools, etc. 

Crypto Transactions That Will Not Incur a Tax Liability

While you must pay taxes on personal income, capital gains, and business income from crypto, here are a few crypto transactions that will not incur a tax liability:

Buying Cryptocurrency Using Fiat Currency

Purchasing virtual currency using fiat currency and keeping it within the crypto exchange doesn’t incur a tax liability. You don’t have to file crypto taxes based on the guidance listed on your Form 1040 tax return. Unless you sell or trade the virtual currency, no cryptocurrency taxes must be paid.

Moreover, even if the virtual currency you’re hodling goes up in value, you’re not liable to pay taxes on your crypto gains unless you sell it for fiat currency or trade it for another crypto. 

Transferring Crypto to Another Wallet

Hodling your digital asset in custodial wallets provided by crypto exchanges or non-custodial wallets, like hardware or software wallets, is not taxed. Moreover, you can transfer your crypto between the wallets you own without worrying about paying taxes on them.

Donating Cryptocurrency

If you choose to donate a crypto asset to a qualified charity or non-profit organization, then the transaction does not incur a tax. You must simply record the transaction at the fair market value of the coins at the time of the donation. However, the donation can also be tax deductible, so it’s essential to take note of your donations’ cost basis properly. 

Gifting or Receiving Crypto as a Gift

In 2021 alone, according to a survey by BlockFi, one in 10 people received crypto as a gift during the holiday season. There is no tax on cryptocurrency gifts under $15,000. If you decide to sell a crypto gift valued over $15,000, you will use the same cost basis as the person who originally purchased it.

Capital Gains Tax

Capital gains is a tax on the profit made from buying and selling property or assets like stocks, and real estate, including crypto. A capital gain occurs if you sell a cryptocurrency for more than your initial investment. Capital gains taxes are considered short-term if held for less than a year and long-term gain if held for more than a year. Short-term capital gain tax rates correspond to an individual’s ordinary income tax bracket, while long-term rates also depend on an individual’s filing status and taxable income.

Additionally, you’re taxed on net capital gains, i.e., the difference between gains and losses. 

The type of activity will determine which tax forms you may need. The tax forms include Form 1040, Form 8949, Schedule C, Schedule D, and Schedule SE. If you find it confusing to calculate capital gains on your own, you may use crypto tax software such as CoinTracker or TokenTax to generate crypto tax reports.

Here are cases when you must report cryptocurrency trades on your tax return:

• Trading Cryptocurrencies
  You must pay capital gains tax when you use crypto as a means of exchange, including selling your crypto for fiat currency such as U.S. dollars or swapping crypto for another. You must also pay tax for paying for goods and services with crypto.
• Trading or Minting NFTs
  If you’re creating or minting NFTs, knowing what events are taxable and how they’re taxed is essential. The specific tax implications of an NFT depends on whether you’re an NFT creator or investor and if you’re interacting with NFTs as a hobby or a business. Once you sell an NFT for crypto or swap it for another NFT, that triggers another taxable event. Any royalties you earn for an NFT you created would also be taxed as income.

Short-Term Capital Gains Tax Rates

Short-term capital gains tax rates are given below:

For the year 2022:

Tax Rate	Single	Head of Household	Married filing jointly	Married filing separately
10%	$0 – $10,275	$0 – $14,650	$0 – $20,550	$0 – $10,275
12%	$10,276 – $41,775	$14,651 – $55,900	$20,551 – $83,550	$10,276 – $41,775
22%	$41,776 – $89,075	$55,901 – $89,050	$83,551 – $178,150	$41,776 – $89,075
24%	$89,076 – $170,050	$89,051 – $170,050	$178,151 – $340,100	$89,076 – $170,050
32%	$170,051 – $215,950	$170,051 – $215,950	$340,101 – $431,900	$170,051 – $215,950
35%	$215,951 – $539,900	$215,951 – $539,900	$431,901 – $647,850	$215,951 – $323,925
37%	$539,901+	$539,901+	$647,851+	$323,926+

For the year 2023:

Tax Rate	Single	Head of Household	Married filing jointly	Married filing separately
10%	$0 to $11,000	$0 – $15,700	$0 – $22,000	$0 – $11,000
12%	$11,001 – $44,725	$15,701 – $59,850	$22,001 – $89,450	$11,001 – $44,725
22%	$44,726 – $95,375	$59,851 – $95,350	$89,451 – $190,750	$44,726 – $95,375
24%	$95,376 – $182,100	$95,351 – $182,100	$190,751 – $364,200	$95,376 – $182,100
32%	$182,101 – $231,250	$182,101 – $231,250	$364,201 – $462,500	$182,101 – $231,250
35%	$231,251 – $578,125	$231,251 – $578,100	$462,501 – $693,750	$231,251 – $346,875
37%	$578,126+	$578,101+	$693,751+	$346,876+

You can use the data given above to calculate your short-term capital gains tax. 

Long-term Capital Gains Tax Rates

The tax rates on long-term capital gains are shown in the table down below:

For the year 2022:

Tax Rate	Single	Head of Household	Married filing jointly	Married filing separately
15%	$41,676 – $459,750	$55,801 – $488,500	$83,351 – $517,200	$41,676 – $258,600
20%	$459,750+	$488,500+	$517,200+	$258,600+

For the year 2023:

Tax Rate	Single	Head of Household	Married filing jointly	Married filing separately
15%	$44,626 – $492,300	$59,751 – $523,050	$89,251 – $553,850	$44,626 – $276,900
20%	$492,301+	$523,051+	$553,851+	$276,901+

Using the data given above, you can easily calculate your capital gains and losses and file your federal tax returns.

How To Calculate Cost Basis?

There are multiple ways to calculate the cost basis for your capital asset and use that to figure out your tax liability. If you hold multiple assets, then finding the most suitable cost basis for your holdings will decide whether you end up paying higher taxes or a fair amount. Four cost-basis methods are allowed by the IRS, and you can only use one during one financial year. The methods are as follows:

• FIFO (First In, First Out): The first asset bought is the first asset being sold. 
• LIFO (Last In, First Out): The last asset bought by you is the first one to be sold. 
• HIFO (Highest In First Out): The asset bought at the highest price is sold first.
• Specific Identification (Spec ID): Choosing the assets sold by you along with the complete records. 

Conclusion

The tax season is right around the corner, and it would be wise for you to start filing your taxes for your crypto trades. Remember to include all your capital gains and losses, including the capital loss you might have had during the crypto winter of 2022, to claim a tax deduction. It’s also important to know that you can’t deduct losses for lost or stolen crypto on your return. You can simply write those off and disregard them from your tax calculations.

In summary, cryptocurrency trading is considered a taxable event, and failure to file taxes can attract penalties.

Are you from a country that requires you file crypto taxes? Or even NFT taxes? Don’t fret, we have it all covered.

Crypto tax report generation can be, as the song goes, better, faster, stronger – okay, in this case  easier, faster, and more secure. Luckily for all overwhelmed tax filers, CoinStats has partnered with CoinLedger to bring you effortless crypto tax reporting at a 10% discount.

Let’s go over the why and the how of the process!

Why Is It Easier to Generate Your Taxes on CoinStats? 

Here are a few reasons why you should consider doing your taxes on CoinStats via CoinLedger:

🕒 You will save time on crypto tax reports

Wanna finish your crypto taxes before you finish your coffee? That’s what we thought. Since most CoinStats users have already connected their portfolios to CoinStats, they won’t have to connect APIs anew to generate their tax reports.  And the fastest way to handle your crypto taxes is the best one for sure!

🔒 You do your crypto taxes securely via the best 3rd party provider

We thought that CoinLedger is the perfect partner if we wanna bring you secure & easy tax report generation: Trusted by over 300,000 crypto enthusiasts all around the world, CoinLedger prioritizes simplicity and user-friendliness every step of the way. Plus, both CoinStats and CoinLedger get only read-only access to selected portfolio items, so your transaction data will never be compromised.

🏷️ You’ll get 10% OFF

As a CoinStats user, you get 10% OFF crypto tax report creation. This one’s a bit self-explanatory: We like you so much we have also thrown in a discount 🧡

💰 You can save money on crypto and NFT tax loss harvesting

Have you lost some money on crypto or NFTs this year? Who hasn’t. Although it is quite unpleasant, capital losses come with tax benefits. You can take full advantage of this loophole when you do your crypto taxes with us. 

How to Generate Your Crypto Tax Report With CoinStats?

Follow these steps if you want to generate your tax report on desktop 💻

And here are the instructions if you want to do your crypto taxes on mobile 📱

Note: Make sure you have updated your CoinStats app, otherwise it might not have this new feature. 

Closing Remarks

As crypto gains wider adoption, more and more countries around the world introduce legislation requiring crypto taxes where cryptocurrency is treated like any other digital asset, such as stocks or bonds. Soon enough crypto taxes – or even NFT taxes – will inevitably become the norm. 

Foreseeing this development, we have partnered with #1 crypto tax tool on the market CoinLedger to facilitate tax reporting for all CoinStats users. Stay tuned for more updates because at CoinStats crypto expansion never stops!