If you’re wondering how to gift bitcoin or other cryptocurrencies for the first time, it may seem daunting at first, but it can be as easy as buying someone a gift card to their favorite department store. Cryptocurrency makes a unique and unconventional gift as it offers the opportunity for asymmetric value appreciation which traditional gifts don’t typically provide.
There are multiple ways you can gift cryptocurrency, these include creating a crypto wallet for them, helping them open an account on a well-known exchange, or even buying them a gift card that can be redeemed for cryptocurrency.
Whether you’re buying bitcoin as a gift for the holidays or for someone’s birthday, read on to learn about the ways you can gift cryptocurrency to your friends.
How to buy cryptocurrency to gift to others
If you don’t already own the cryptocurrency you wish to transfer, you can buy bitcoin & other cryptocurrencies using one of the many well-established cryptocurrency exchanges currently on the market. If you already own the cryptocurrency you wish to gift, feel free to skip onto the next section.
While there are many cryptocurrency exchanges in existence, we recommend that you take a discerning approach when selecting the right exchange due to the security risks that some exchanges have experienced in the past.
Some of the most popular and trusted exchanges in existence at the time of this writing include:
|Coinbase||Supports bitcoin and wide-variety of other cryptocurrencies||Most established and widely trusted cryptocurrency exchange within the U.S.|
|CashApp||Only supports Bitcoin||Established mobile-first peer-to-peer transaction app|
Regardless of which cryptocurrency exchange you choose, you should ensure that the exchange you opt for allows you to both withdraw cryptocurrencies and transfer those cryptocurrencies into wallets.
Both Coinbase and CashApp allow you to trade fiat currency (e.g. US Dollars), deposited from a bank account, directly for the cryptocurrency of your choosing. They will also allow you to transfer those cryptocurrencies directly into a crypto wallet or other account of your choosing, provided you have the recipient account’s address.
Bear in mind that cryptocurrencies are historically a highly volatile asset class, so the value of your investment between your purchase and when you gift it to your loved one may change drastically.
What’s the best way to gift bitcoin & other cryptocurrency?
Assuming that you already own the cryptocurrency that you wish to gift, now you’ll need to find the best vehicle for transferring that cryptocurrency over to the intended recipient. The best option will depend on how much cryptocurrency you intend to give and how experienced with cryptocurrency investing the recipient may be.
We cover some of the most popular options for how to gift bitcoin and other altcoins below, sorted from lowest-maintenance to most advanced.
The paper wallet is one of the simplest and cost-effective ways to gift cryptocurrency while allowing you to keep the gift a secret up until the point it’s given. Paper wallets are an excellent choice for transferring low to moderate amounts of a single cryptocurrency as a gift.
Keep in mind that paper wallets generally do not allow for the transfer of multiple types of cryptocurrency (e.g. Bitcoin, Ethereum and Cardano) using a single paper wallet, you’ll need to create separate paper wallets for each cryptocurrency if you intend to transfer more than one type of coin.
Paper wallets hold all the information that allows the recipient to gain access to their newly acquired cryptocurrency, including public and private keys, usually in the form of a printable QR code.
Some exchanges and wallets allow you to print out paper wallets that you can transfer your existing holdings onto. If your wallet or exchange does not allow for that, you can alternatively generate your own paper wallet using a trusted open source paper wallet generator.
Once created, you’ll need to print out the paper wallet onto a durable print medium. You can then scan the QR code and use the underlying key to access and transfer cryptocurrency from your live account onto the paper wallet.
It’s a good idea to wrap the newly created paper wallet in a non-transparent form of gift wrapping that’s also water-proof and safe from environmental hazards for gifting to the intended recipient.
|Pro Tip: Paper wallet safety|
Due to the obvious vulnerabilities of using paper as a storage method for cryptocurrency accounts, some users choose to store their paper wallets in waterproof files or laminate their paper wallet creation to protect it from damage.
Whatever you do, don’t allow anyone else to see the QR code or keys contained on your wallet to avoid possible theft. Always remember that anyone who has access to the paper wallet has access to the cryptocurrency held within.
An exchange transfer of cryptocurrency is probably the easiest and most direct way of gifting cryptocurrency if you’re not concerned about surprising the recipient.
The great thing about this method is that most exchanges, like Coinbase, Kraken and Gemini, all support multiple cryptocurrencies. This makes it a great way for someone with a well-diversified portfolio to quickly gift multiple cryptocurrencies of their choosing from one centralized location.
This can also serve as a learning opportunity if you wish to guide the recipient through setting up an account and then transferring cryptocurrency to their newly established account. You will need the recipient’s participation for this to work.
To gift cryptocurrency through an exchange, you’ll need the intended recipient’s exchange address (addresses if you intend to transfer multiple coins). You can transfer your cryptocurrency directly to their account by using the “transfer” or “send token” option featured within the dashboard of most exchanges.
Once entered, most transfers are completed quickly (within 15 minutes) if not instantaneously.
|Pro Tip: Exchange address for multiple crypto coins|
When asking the recipient for their exchange address, make sure they provide you with the address for the exact type of cryptocurrency that you intend to send. It’s important to verify that the target address is meant for the correct cryptocurrency or you risk losing the entire transfer.
Crypto coins feature unique addresses and operate on distinct blockchains. This means that different cryptocurrencies cannot be sent to other blockchains. For example, you will not be able to send bitcoin to an ethereum-based address or vice versa. If you were to transfer cryptocurrencies to the wrong address type, you will permanently lose access to that entire amount with no chance of recovery.
Giving someone a hardware wallet is the cryptocurrency equivalent of handing them the keys to a shiny new car. Hardware wallets are an excellent high-tech and secure way to transfer large quantities of cryptocurrencies to recipients using a sleek and compact package.
Popular and well-established hardware wallets like Ledger are compatible with multiple types of cryptocurrencies, making them an excellent one-stop shop for transferring multiple coins onto a single storage drive.
Hardware wallets are renowned as one of the most secure storage methods for sophisticated cryptocurrency investors on the market. They hold your cryptocurrency keys offline in cold storage rather than leaving them exposed via a hot wallet or exchange on your desktop or mobile device that might be vulnerable to hackers.
However with the added security comes a price tag; hardware wallets are the most expensive option for gifting cryptocurrency. Prices for hardware wallets offered by top manufacturers can range anywhere from $59 for a starter pack to as much as $194 for more advanced offerings.