Bitcoin vs ‘Tiger King’: Learn Why Donating Bitcoin Is More Popular Than You Think
Today, there are 70 million people using cryptocurrencies like Bitcoin. This is two times larger than the total number of people who watched “Tiger King” on Netflix (34 million). There are two reasons I draw this comparison. The first reason is the all-too-obvious fact that “Tiger King” still carries with it some residual power to compel a reader to click. The second, and more important reason, is that though your Millennial donors do not invest in and ultimately donate tax-incentivized assets associated with “Tiger King,” they are increasingly likely to invest in, and support nonprofits with, Bitcoin and other cryptocurrencies.
So, how popular is Bitcoin really?
Coinbase Is Bigger Than Charles Schwab, Fidelity or E-Trade
Coinbase is the largest cryptocurrency exchange in the U.S. Since 2017, they have had more active users than the top stock exchange platforms in the country. So, why haven’t you heard about it? Well, for one thing, most of their users are Gen Zers or Millennials. The other important reason this fact often goes unnoticed is because so many own these assets, but rarely spend them on traditional consumer products.
Bitcoin Is for Donations, Not Purchases… for Now.
Bitcoin and other cryptocurrencies are rarely used for day-to-day purchases. Though easy to transfer, cryptocurrencies have appreciated greatly over the last decade. For this reason, most cryptocurrency users prefer to hold (or, as crypto users say, HODL) their cryptocurrencies while spending their USD. The one time it makes sense for them to release their death grip on the precious digital assets is when they donate to charities. This is due to the tax incentive I’ll explain below.
Bitcoin Eliminates Capital Gains Taxes (Only When Nonprofits Accept Them Directly)
Bitcoin and other cryptocurrencies are classified as “property” by the IRS. This means that when a Bitcoin investor donates their cryptocurrency to a 501(c)(3) nonprofit, they not only get a deduction, they owe no capital gains tax on the appreciated crypto they donate to the charity. Because there are thousands of people in the U.S. with millions of dollars invested in cryptocurrency — mostly Millennials — anytime those individuals cash out of their positions, they have the opportunity to support a nonprofit instead of paying taxes. For most, that decision is an easy one.
Bitcoin has been around for over a decade. The user base tends to double every 1.5 years or so, regardless of upward or downward price movement. Bitcoin and other cryptocurrencies are here to stay and, thankfully, they are escorted by a Herculean tax incentive for those who choose to donate them directly to nonprofits.
Pat Duffy, co-founder of The Giving Block, began as a federal consultant for pharmaceutical companies, focused on collaboration with nonprofits. He then shifted to the nonprofit sector, focusing on executive leadership and fundraising for voluntary health associations. Merging his nonprofit experience and passion for Bitcoin trading, The Giving Block was born, creating the turnkey solution for cryptocurrency donations now used by charities around the world.