It should be no surprise that crypto and digital assets are up big time in 2021. Compared to last year the increase is a whooping 583% for 2021 according to The Giving Block, a crypto donation and fundraising platform for nonprofits and individuals. On Crypto Giving Tuesday this year The Giving Block processed $2.4 million in gifts with the average donation being $12,600 USD!
When looking back to 2020 approximently 45% of cryptocurrency owners gave $1,000 or more to charity that year. With the price of crypto's skyrocketing this year it stands to reason that the amount that crypto owners would give this year would increase in dollar amount. The total number however could fall due to further crypto adaptation but nothing in for certain. In 2020 when 45% of crypto owners gave $1,000 USD or more only 33% of all investors across sectors did this.
Naturally there is not going to be one single reason for this but generally speaking younger investors and younger people are much more idealistic and thus are primed to be doners to causes to help the common good. The other big reason is going to be tax treatment and one of the reasons why by the time the data for the year has been processed should be a ton higher. Why you might wonder? Well that is because since crypto is thought of as an asset by the IRS which means that it is subject to capitol gain taxes. To help combat high tax rates one can donate the asset, in this situation crypto, and you will get a deduction at the cryptos fair market value.
You also do not have to use the whole deductions this year. If the gifts exceed 30% of adjusted gross income you can carry the deductions forward up to 5 years. With uncertainty in how crypto will be taxed in the future I would expect that individuals who have generated large profits this year might be tempted to take the tax hit this year but lock in future tax rightoffs for the next few years. This provides them some clarity on the situation during a time where there has not been all that much.
Due to these factors it is not surprising to see that crypto owners have been previously, and I think it is safe to assume this year as well, donate to charity at a higher rate then traditional investors. With age comes changing priorities and with youth comes a much more idealistic and optimistic individuals. Since it can also help lesson the tax hit it makes sense for the higher rates especially since crypto prices increased so much hitting the $1,000 threshold with the data is much easier to do then with trading stocks will say.
Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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