91% of Bitcoin Holders Now Profitable: Crypto Rally Fuels Charitable Giving

by | Feb 20, 2024

With Bitcoin’s price reaching about $48,000 last week, a recent study found that 91% of Bitcoin holders are now in profit. Because so many of these investors have unrealized gains in their portfolios, we expect many of them to become charitable cryptocurrency donors during the current bull cycle that we seem to be entering. 

In the sections below, we unpack the significance of this report, plus what investors and charities alike should know about donating crypto. 

Why Are 91% of Bitcoin Investors “In Profit” Today?

According to crypto data firm Into the Block, 91% were now “in the money” as Bitcoin’s price settled at roughly $48,000 last week. So how did we get here?

From January 1 to December 31, 2023, Bitcoin’s price rose a staggering 154%. And the price continues to rise.

At the time of writing this article, only a limited number of Bitcoin holders—those who bought at the very top of the previous cycle—do not have unrealized Bitcoin gains. Of course, if and when Bitcoin’s price reaches a new all-time high, those investors will also be “in profit.”

Bitcoin isn’t the only crypto asset that saw major gains during 2023—popular cryptocurrencies like Ethereum and Solana also went way up in value.

Major crypto assets up in 2023, including BTC, SOL and ETH.

Should Investors Donate Some of Their Crypto to Charity?

Charitable giving is a highly personal decision, but we think this news is a major positive signal for Crypto Philanthropy’s impact in the coming year or so.

Because at the end of the day, many crypto investors will take profits at some point, and maybe re-invest elsewhere when the right opportunity comes along.

Here’s why crypto investors eager to maximize profits and lower taxes are increasingly excited about donating crypto to charity:

1. Long-term capital gains tax rates

Crypto transactions are taxable in most jurisdictions. In the US, anyone who sells or exchanges appreciated crypto assets held for at least one year will owe long-term capital gains taxes on those assets. At a federal level, these rates can climb as high as 20%, plus a 3.8% net investment tax for high income taxpayers and any state-imposed taxes.

2. Tax treatment of crypto donations

The IRS treats charitable donations of cryptocurrencies like stock donations. Crypto donors won’t owe capital gains taxes on long-term held assets that they donate directly to registered charities. In short, donating crypto is a highly tax-efficient way to make a difference that results in lower taxes and a greater philanthropic impact.

3. Crypto adoption among nonprofits

Crypto users no longer have to run a deep search on Google to find charities that accept crypto donations. Thousands of nonprofits use The Giving Block to accept all sorts of cryptocurrencies, from Bitcoin to Shiba Inu. It’s never been easier to support a charity of any type with crypto.

4. The hope of making a difference

Above all, crypto donors are just like any other donor: they give because they care. For example, the anonymous donor behind The Pineapple Fund gave $86 Million to charities told news site Hackernoon that the initiative “is purely for the charity’s benefit; I am not taking any tax deductions.”

How Do Profitable Bitcoin Holders Donate BTC?

Factors like gift timing and donation amount depend on the financial situation of each individual.

But when a crypto investor is ready to realize gains on their investment, donating crypto can be a smart way to lower their tax burden while making a difference in the world.

Most crypto donors can follow these 5 easy steps:

  1. Pick an asset to donate.
  2. Choose a cause to support.
  3. Make your donation.
  4. Keep your tax receipt.
  5. File your tax return.

Note: The Giving Block does not give tax or financial advice. This article is for informational purposes only. We recommend speaking with a qualified advisor about your financial situation.

Get More Resources on Crypto Philanthropy

Explore our blog’s extensive library of articles, guides and reports on crypto philanthropy and non-cash asset fundraising. 

Our pick for donors: Explore causes to support with crypto, stock or DAF donations.

Our pick for nonprofits: Discover crypto fundraising highlights and case studies. 

Our pick for everyone: Meet the Faces of Crypto Philanthropy

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