Giving The Gift Of Crypto
2021 has been a big year for cryptocurrency. What was, a mere decade ago, considered a possibly-fleeting financial experiment has grown into a household name: an inescapable, undeniable player in the investment world. In fact, it’s very possible that discussion of crypto made its way to your Thanksgiving table. As we have explored previously, there are many reasons to buy crypto for yourself, but what about for someone else? With the holiday season in full swing, and Christmas fast approaching, there is no better time to give the gift of crypto to someone on your list this year.
Coin Considerations
There are currently over 14,000 cryptocurrencies in existence, so choosing which to give may seem a bit daunting at first blush. Bitcoin is of course the largest cryptocurrency by market value, but a striking number of altcoins have risen to prominence in recent years as well. Cryptocurrencies are able to be divided up to eighteen decimals, so buying Bitcoin as a gift does not mean dropping almost $50,000 on a whole coin. Bitcoin’s particular benefits as a currency are numerous and although its value has fluctuated over the years, its prominence and market share make it a great choice. It’s also a valuable hedge against inflation and has the most liquidity of any cryptocurrency, so you can give with confidence that your recipient will have surely heard of it before.
Ethereum and Litecoin are also great options. Stablecoins are tied to hard currency like gold or the US Dollar (a reserve asset) and are heralded for their ability to safely store value and easy conversion to any other cryptocurrency that the buyer or gift recipient may choose. What are widely considered to be the safest cryptocurrencies are those offered on apps where new investors can buy, like Venmo, such as Bitcoin, Ethereum, Litecoin and Bitcoin Cash.
Cryptocurrencies like Ethereum, and the less well-known Solana and Avalanche have garnered attention for advancing blockchain technology, and all of the associated potential therein. If you’re likewise unfamiliar with Solana and Avalanche (AVAX) here are some benefits to consider:
Solana and AVAX are some of the best performing cryptocurrencies this year.
Solana is one of the fastest blockchains and has the cheapest transaction fees.
AVAX's ecosystem is growing very fast and hundreds of decentralized applications are currently being built on top of AVAX.
If the special someone on your list loves memes, Dogecoin and Shiba Inu coin were both born from internet jokes that became popular some years ago. However, most experts agree that whether you are a beginning investor or buying as a gift, it’s more advisable to err on the side of caution and keep with the more established cryptocurrencies.
Should you want to do your own research comparing and contrasting each coin to decipher which is right for your gift, CoinMarketCap is a great place to start.
How to Give Crypto as a Gift
Giving cryptocurrency as a gift is virtually no different from buying it for yourself, with a few exceptions. It can function as a speculative investment or as a cash equivalent. First, you would need to help your recipient set up a wallet if they do not already have one. If you’re at the stage of buying crypto as a gift for someone else, you are likely already an investor familiar with the ins and outs of the process. CoinFlip has made it easy to buy crypto even for the greenest Fintech beginner with the advent of the new CoinFlip Preferred, where a member of our team of experts personally guides the buyer through every step of the process, tailoring the experience in real time to the buyer’s needs.
You can also use a cryptocurrency exchange like Coinbase, which has its own proprietary method of sending to the gift recipient. Though not an exchange, it is also possible to send Bitcoin via CashApp. Some best practices of buying cryptocurrency as a gift are, again, identical to those you would follow yourself, such as storing the information needed to access your gift in a safe place offline.
Another option is gifting a cryptocurrency wallet, whether that be a hardware wallet (such as Trezor or Ledger) that physically plugs into a computer via a USB thumb drive, or a software wallet accessible through an app downloaded to your smartphone or computer.
Gifting NFTs
Non-fungible tokens have been a hotly-discussed topic in mainstream media over the past year, and they are likewise a natural part of any discussion of gifting cryptocurrency. If your recipient doesn’t already have one, it will be necessary to first set up a crypto wallet for them, then purchase Ethereum (the only currency with which most NFTs can be purchased) on an exchange to move into that wallet. Once Ethereum is acquired and the wallet is established, head over to an NFT marketplace like OpenSea and start browsing. NFT Marketplaces operate similarly to an auction site like eBay, making them reasonably user-friendly.
Once you have purchased the desired NFT, transfer it to the recipient’s wallet. Most NFT marketplaces make this process fairly easy to execute. You will likely be charged a “gas fee” for doing so to cover processing and validating, so be sure to read the fine print and remain aware of all associated fees.
Final Thoughts
As it has been with the currency itself, giving crypto as a gift will undoubtedly become increasingly mainstream in the years to come. So if you’re thinking about giving crypto as a gift this year, do your research, avoid possible scams, and take all the necessary care and consideration (if not more than) you would if you were buying for yourself. Ultimately, generosity and showing someone you care should be joyful, not stressful, so have fun, and happy holidays!
