Growing Popularity of Crypto Could Spur Charitable Giving: Fidelity

“This offers advantages both for the donors, who can minimize their capital gains tax owed, and for nonprofits, who will be the beneficiaries of larger gifts and who often have a hard time accepting these assets directly,” he said.

Artemis Strategy Group conducted the study conducted in July and August among 1,216 investors in the U.S. who have a minimum of $25,000 in investable assets outside of an employer retirement plan.

Working Out the Kinks

The full financial implications of investing in cryptocurrency are not yet widely understood, according to Fidelity Charitable, even among those who have invested. 

Thirty-eight percent of cryptocurrency investors were not aware that selling digital assets is a taxable event. And 55% were not sure whether digital assets can be donated to charity.

Fidelity Charitable noted that donating digital assets to charity is a tax-savvy strategy that can potentially minimize the investor’s tax burden. 

The study found that despite this knowledge gap, one-third of cryptocurrency owners said they have donated digital assets to charity. But challenges still exist in transacting in cryptocurrency. 

Forty-six percent of those who had made crypto donations said it was hard to find charities that accept cryptocurrency donations. Moreover, half said the recipient charity required a larger amount than they wanted to give, and 44% said the process was cumbersome.

“As the cryptocurrency market expands and matures, we would expect to see that many of the transactional processes that investors find clunky or difficult today become smoother, including the ability to donate these assets for charitable purposes,” Oommen said. 

He said advisors can help, not only by educating clients on the implications of investing in cryptocurrencies, but also in looking across all assets they hold to determine the most effective way to support their charitable giving.