Looking for a holiday present that won’t fall victim to any supply-chain snafus? If so, there’s always crypto.
The vast majority of Americans have never invested in or traded a cryptocurrency, but buying crypto is easier than you might think—and, as a gift, offers the potential of a big upside.
Although cryptocurrency prices have recently plunged, crypto is predicted to keep growing in the coming years, and is (slowly) becoming popular with more online retailers—two factors that have led many analysts to view it as a promising asset.
“There are a group of consumers who really believe crypto, and digital assets in general, are where we’re headed, and many of those folks are really evangelizing the uptake of crypto,” says Angela Fontes, founder of investment consultancy Fontes Research. “Gift-giving may be a great way for them to spread the crypto gospel, as it were.”
There are thousands of crypto coins out there, but assuming you’re buying a gift for a novice, it’s probably best to stick with one of the more mainstream coins, like Bitcoin or Ethereum. Services like Coinbase and Binance make the purchasing process relatively painless, and you don’t need to buy a whole coin to gift crypto. Even though one Bitcoin costs about $47,000 at the moment, $100 can net you about 0.0021% of a Bitcoin.
Both Coinbase and Binance can even send gift cards straight to recipients via email—though the giftee will need to create an account to receive the crypto. Another money transfer service, Cash App, also allows you to give crypto, though its services are limited to Bitcoin. (Paypal and Venmo made waves when they added crypto purchasing features earlier this year, but neither yet allows you to send that crypto to a third party.) On Thursday, Robinhood announced that it would introduce a crypto gifting feature on Dec. 22 that would allow users to gift one of seven different cryptocurrencies.
If your recipient has no means to store their new digital assets, you could also get them a cryptocurrency wallet, which stores the currency and will note transactions on a blockchain ledger. There are two types of wallets: hot wallets and cold wallets. Hot wallets store the private key—a string of numbers that supply an address for the wallet—online and are easy to use but are also more vulnerable to cyberattacks. (Coinbase makes a well-regarded hot wallet.) Cold wallets keep the private key offline via hardware like a USB drive. (For example, check out the Ledger Nano X.)
Of course, anyone giving the gift of crypto should be comfortable with the currency’s unpredictable nature—meaning that your gift could potentially decrease in value. For instance, in just the past month, the value of Bitcoin has plunged about 30% from its high of $68,000 on November 10. “My big concern with crypto is the potential for volatility,” says Fontes. But that shouldn’t be an issue in something as low stakes as a holiday present, she notes. “Since sending or receiving a gift is different from putting your entire retirement savings into crypto,” she says, “I think giving or receiving a gift of crypto is pretty cool.”
One final route gifters might want to explore: Non-fungible tokens (NFTs), which are basically pieces of digital art that are typically purchased with crypto and tracked using blockchain technology. You can browse the NFT marketplace via sites like OpenSea, and the easiest (and safest) way to buy NFTs is again through a wallet.
“I think NFTs definitely lend themselves for better gifts,” says Les Borsai, cofounder of crypto-wealth management firm Wave Financial. “You have a variety of NFTs that will satisfy the interests of different people. If you like sneakers, you could obviously give them the CloneX. If they’re a sports fan, you can get them something from Top Shot.”
And whether you’re buying an NFT or Bitcoin, be prepared to field a few questions. In the event that the recipient is confused why you opted for, say, an NFT of a basketball game highlight instead of just getting tickets to a basketball game, you’ll just need to calmly explain that, if the market picks up steam, their gift could potentially become even more valuable. (Or not.)
“I bought my niece an NFT called a Pudgy Penguin for $1,300, and she sold it six days later for $11,000,” Borsai says. “That kind of appreciation in such a short amount of time, that’s a pretty good gift.”
Update: This article has been updated with information about Robinhood’s crypto gifting feature.
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