What is FIFO in cryptocurrency trading and how does it work?

3 answers

• Mar 18, 2022 · 3 years ago
  FIFO, or First In, First Out, is a method used in cryptocurrency trading to determine the order in which trades are executed and settled. It means that the first cryptocurrency asset bought will be the first one sold. This method is important because it ensures fairness and transparency in trading. It prevents traders from manipulating the order of their trades to gain an unfair advantage.
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• Mar 18, 2022 · 3 years ago
  In simple terms, FIFO means that if you buy Bitcoin first and then Ethereum, when you sell, you will have to sell your Bitcoin before you can sell your Ethereum. This is the default method used by most cryptocurrency exchanges to calculate gains and losses for tax purposes as well.
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• Mar 18, 2022 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, follows the FIFO method to ensure a fair and transparent trading environment. FIFO is important because it prevents market manipulation and ensures that trades are executed in the order they are received. This method is widely accepted and used by many reputable exchanges in the industry.
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