Knowing how to gift bitcoins to friends or family can actually be a lot trickier than it first might seem. What if they lose their private key? What if they end up throwing out the card you wrote their seed phrase on? Where do they store their new found sats? Today you’ll learn the ins and outs of what you need to consider when gifting (including taxes), what not to do and how at the end of the day, gifting bitcoin might not really be the best thing sometimes.
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How To Gift Bitcoins
We’re going first assume you’ve already got the bitcoin that you’re going to gift in your possession. If not, there’s many ways to buy, exchange or earn Bitcoin with the main one being via a private and secure Crypto Exchange. Once you have the bitcoin, the actual giving crypto method can be done in a few different ways.
>> Learn More: How To Buy Bitcoin
Note: Never use paper wallets. They promote poor security and have a very high chance of loss!
Send The Gift To An Existing Software Wallet (Easy)
One of the easiest ways of gifting crypto is to just send some bitcoin directly to the recipient’s digital wallet. Obviously for this to work the receiver has to already have their own Bitcoin Wallet and generally understand Bitcoin, but it’s usually perfect for like minded friends or family members that are already onboard with the new Bitcoin Standard.
We advise waiting until the Mempool is nice and cheap, then sending it through to their wallet and letting them know of your gift. You can do this through third party apps such as Strike or Cash App, but we’d recommend doing it directly peer-to-peer as Satoshi intended it to be done.
Have them send you a new receive address and if the gift is for a large amount, also verify the address through a secondary communications channel like Signal or in person. Then open your own wallet and send it through making sure to double check the address before broadcasting!
Use A New Software Wallet (Easy)
If the receiver doesn’t have their own wallet, or they’re completely new to Bitcoin then you can not only gift them some bitcoin, but an entirely new software wallet with the bitcoin already in it!
We’d recommend using Sparrow Wallet to generate the new software wallet seed phrase, or if you have a hardware wallet you can also use that to generate the new, separate, seed phrase too for added security. Once you open Sparrow, click on the receive tab to generate a new bitcoin address and send your funds through to it.
Finally write down the seed phrase in whatever form best suits the gift and you’ve got a fantastic bona fide gift! We’d also recommend only gifting them the seed phrase (not a saved wallet file or anything), as this is just simply 12 or 24 words that you can give in many forms. For example you could write it in the card, print it out as QR codes or even engrave it on something if you really want.
Use An OPENDIME Or Ballet (Medium)
If you want to actually give physical coins or some other physical manifestation of “bitcoin” then there’s a few options available. You can put some bitcoin on an OPENDIME and give it to them. These are little USB drive like devices that have special hardware on board that ensures the integrity of the digital assets. Do keep in mind that they are Bitcoin only though.
Another option is a physical card or coin from Ballet. Their shop has a number of fantastic looking items that come with the private key sealed and stored on the item itself. They look the part and are much more similar to a traditional gift like giving a troy ounce of gold.
We’d recommend making the recipient aware that while these are very simple storage types, they can get lost or damaged, meaning they’d then lose the bitcoin held within. As such, if it’s for a significant amount, they would be better off buying a proper Hardware Wallet and having multiple secure backups of their seed phrase.
While there’s also a number of cryptocurrency gift cards out there that can make for similar gifts, we’d recommend staying away from them as they’re usually associated with crypto exchanges, which isn’t something anyone should be encouraging brand new bitcoiners to go sign up for. Instead the first thing new crypto investors need to do is study Bitcoin at least for a few hours, specifically what Exit Liquidity is.
Use A New Hardware Wallet (Hard)
Finally one of the slightly harder, but potentially more rewarding, options is to not just buy your recipient some bitcoin, but a brand new hardware wallet as well! Hardware wallets will ensure that your bitcoin gift, as well as any future funds they add to it, stay much safer from hackers or loss.
We have rated and reviewed over 45 hardware crypto wallets over the years and now have basically every one in the world in our huge comparison list. Once you’ve chosen one you think they’d like, make sure you follow our guide on How To Buy A Hardware Wallet to make sure your security and privacy is protected.
Once you’ve got it in your hand, we’d recommend you give it to them unopened, then sit with them and help them go through the full setup process. Answer any of their questions and once it’s setup, send them the cryptocurrency gift to their new wallet.
Doing it this way ensures that they not only get to verify that everything is above board and hasn’t been tampered with by someone, but also helps them to learn all the technical aspects of setting up the hardware wallet and backing up their seed phrase.
Crafting Your Crypto Gift
Broadly speaking, giving the gift of Bitcoin usually occurs in one of two ways:
- As a long term gift that the receiver keeps as a Store Of Value
- As a short term gift that’s essentially just like giving someone any currency (USD, EUR etc) where they go and spend it straight away on goods or services
How you give someone the gift of Bitcoin heavy depends on which one of these two scenario’s you’re targeting. The first will likely involve introducing that person to the world of Bitcoin, educating them a bit on proper long term storage knowledge and other bits and pieces. The second one is much simpler and the receiver likely already knows a lot about Bitcoin and uses it regularly.
Both cases can also suffer (or benefit) from Bitcoin’s Volatility, depending on how long it is between when you purchase the actual bitcoin, gift it to them and what bitcoin’s price is doing in that time window. You might buy $100 USD worth and by the time they receive it, it’s worth $50, or $200! As such, we’d recommend to always try and buy, then gift your present as quickly as is reasonably possible to help mitigate this.
Consider Your Recipient
Next you also should be aware that not everyone will share your enthusiasm for Bitcoin. While you may be hugely excited about it (and it is a hugely exciting technology!), many others either aren’t ready or just don’t care.
If this is the case, and you know that they really don’t care, then it’s probably best not to force the matter and simple come up with another gift. If you’re not sure where they stand, another option to consider is giving bitcoin as half the gift, with a more traditional gift as the other half.
This way the recipient still gets introduced to bitcoin and the world of digital money, but if in the moment they’re not too excited about the bitcoin, they still get something else as a gift.
Always Include Instructions!
Another aspect of gifted crypto that many overlook is instruction and/or documentation. One part of this is for crypto taxes which we’ll get into a bit more below, while the other is simply so the new person can really understand the gift they’ve received properly.
Try as we might, we’re not the first Google search result for every Bitcoin query! As a result, if the new recipient tries to search for good quality Bitcoin education it’s very likely they’ll end up on scammy exchange websites that try at every turn to sell them altcoins and trick them into gambling their fiat currency away.
Instead, think about including an extra print out or card with a few “starter resources” such as books or good educational websites. You can choose them yourself from other sites, or you can use some of our articles listed below.
- A Beginners Guide To Bitcoin Security
- A Beginners Guide To Bitcoin Privacy
- How To Invest In Bitcoin
- Why Should People Learn About Bitcoin?
- Dollar Cost Averaging Crypto
- Is Bitcoin Real? And Is It Safe?
- What Is Exit Liquidity & Why Learning About It Will Save You Thousands
Consider Keeping A Copy
Finally, give considerable thought to whether or not you should hold a copy of their private keys. People that are completely new to Bitcoin can and almost certainly will loose their private key or seed phrase. Then, much later, once Bitcoin has increased in price by a bunch they’ll see the value of it and realize it’s too late to fix their carelessness.
If you hold a secondary copy safely for them, there’s a strong chance you will save their present a few years later. Obviously this isn’t required for all bitcoin gifts, but it’s just something to think about a bit when you’re planning how much crypto to give and how to give it.
Tax & Capital Gains Tax Considerations
Obviously tax considerations are going to be vastly different depending on where you live. For those in the USA, crypto gifts are taxed just like other monetary gifts such as a stock or bond meaning they’re generally tax free up to a point.
Cryptocurrency gifts aren’t taxable events unless the gift exceeds the annual gift tax exemption amount. The annual exclusion amount for the 2025 tax year is $19,000 according to the IRS. For 2024 it was $18,000.
Annual exclusion for gifts increases to $19,000 for calendar year 2025
IRS
Once the recipient sells the bitcoin gift, there will be a Capital Gains Tax (CGT) event and they will need to pay capital gains tax if they’re selling it for more than what their cost basis is. If the receiver keeps their gift for a number of years and the fair market value of the Bitcoin increases substantially in that time, the capital gain can be a decent amount resulting in a significant tax bill.
This is why it’s very important to properly document your gift to them, ensuring you note the fair value paid for the bitcoin, the date it was gifted on and from whom and what wallet address it came from and went to. This can all just be written on an extra piece of paper when the gift is given.
The larger the amount, the more important this becomes. You should also be sure to make it explicitly clear that it’s a gift, not a loan or payment for any type of service. This ensures excellent and clear tax records for any future crypto tax queries that might come up.
FAQ
How To Gift Crypto To Spouse?
Giving bitcoin to your spouse could be a fantastic idea, or a really bad one. Before buying anything first be honest with yourself and really ask if they truly will appreciate it. If you’re certain the will value it, then there’s a few ways to be a Bitcoin gift giver. You can simply transfer funds from your crypto wallet to theirs, for something more physical you can use an OPENDIME or Ballet coins, or you can buy them a secure and private hardware wallet.
Do You Have To Pay Tax On Gifted Bitcoin?
Different countries and even states have different crypto gift tax laws, but generally in the USA the gift recipient doesn’t have to pay any tax on bitcoin that is gifted to them, so long as it’s under the annual exclusion for gifts, which is $19,000 for 2025.
Can I Gift Crypto To My Parents?
Giving Bitcoin to ones parents is often a bit trickier than gifting it to other friends and family, as parents tend to be older and thus, not as technically capable. Maybe your parents are crazy good with technology, but if not, a few options include using more physical coins or cards such as from Ballet or taking self custody of the funds for them on their behalf. This way the technology load is greatly reduced and there’s less risk of loss.
