How do LIFO and FIFO methods affect the average cost calculation for cryptocurrencies?

1 answers

• Mar 22, 2022 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, utilizes the FIFO method for calculating the average cost of cryptocurrencies. This method ensures that the oldest purchases are sold first, which can have tax advantages for investors. By using FIFO, investors can potentially lower their tax liabilities by selling cryptocurrencies that were purchased at a lower price. However, it's important to note that the choice between LIFO and FIFO ultimately depends on the individual investor's preferences and circumstances. It's recommended to consult with a tax professional or financial advisor to determine the best method for calculating the average cost of cryptocurrencies.
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