What is the meaning of FIFO in the context of cryptocurrency trading?

3 answers

• Dec 28, 2021 · 3 years ago
  FIFO in cryptocurrency trading refers to the method of accounting for the order in which assets are bought and sold. It means that the first assets purchased are also the first ones to be sold. This is important because it helps determine the cost basis of the assets and can have tax implications. For example, if you buy Bitcoin at different prices over time and then sell some of it, FIFO would require you to sell the Bitcoin you bought first before selling the more recently purchased Bitcoin. This method ensures fairness and transparency in trading transactions.
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• Dec 28, 2021 · 3 years ago
  FIFO in cryptocurrency trading is like waiting in line at a supermarket. The first person in line gets served first. Similarly, the first assets you buy are the first ones you sell. It's a way to keep track of the order in which you acquired your assets and helps determine the profit or loss on each transaction. FIFO is important because it provides a standardized method for accounting and helps prevent any manipulation or favoritism in trading.
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• Dec 28, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, follows the FIFO principle in its trading operations. FIFO ensures that the trades are executed in a fair and transparent manner, with no preferential treatment given to any particular user. It helps maintain the integrity of the trading platform and ensures that all users have an equal opportunity to participate in the market. FIFO is an industry-standard practice and is widely used by reputable exchanges to ensure a level playing field for all traders.
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