For example, did you know that there are almost two dozen billion-dollar cryptocurrencies now?

The crypto market is still at the beginning and it is in a continuous evolution. There are manycuriosities about cryptocurrencies that people don’t know about cryptocurrency, except Bitcoin. For example, there are many cryptocurrencies on the market and you must pay taxes only for spending cryptocurrencies. The main factors about cryptocurrencies are as follows:

1. There are more than 1,700 different cryptocurrencies — and the number is growing

You are wrong if you think that in the crypto market exist only Bitcoin and Ethereum. There are 1,715 different cryptocurrencies that appear on investing.com, and there are others that will appear in the future. About a month ago, there were only 1,662 cryptocurrencies.

 

In fact, of the 1,715 tracked cryptocurrencies, 525 of them have market capitalizations of less than $100,000.

However, there might be more significant cryptocurrencies than you think. Consider these stats:

• 23 cryptocurrencies have market capitalizations greater than $1 billion.
• 120 cryptocurrencies have market caps of $100 million or more.
• 477 cryptocurrencies have attained market caps over $10 million, and most of these have significant daily trading volume.

2. Not all cryptocurrencies are designed as payment methods

Some cryptocurrencies are designed to work in much the same way as traditional currencies like the U.S. dollar. For example, Bitcoin is already regularly used to pay for goods and services.

The biggest example of this is Ethereum, which is designed to use “smart contracts.” For example, an Ethereum contract can allow money to be distributed only when several people agree.

3. The value of all cryptocurrencies is $324.6 billion

This is the current market value of every created coin of the mentioned 1,715 cryptocurrencies. And this number has fluctuated tremendously. In 2018, the overall cryptocurrency market cap has been over $825 billion and as low as $250 billion, thanks to the tremendous volatility in the market.

It’s also worth mentioning that the cryptocurrency market is very top heavy. Bitcoin alone makes up 42% of the entire market cap, and Ethereum makes up another 15%. In all, the 20 largest cryptocurrencies account for more than 86% of the market.

4. You may have to pay taxes on your cryptocurrencies, even if you don’t sell them

Since this article is publishing on Tax Day 2018, it’s worth mentioning an interesting concept about cryptocurrencies and taxation.

Cryptocurrencies are classified as “intangible property” and are subject to the same capital gains tax system as investments like stocks.

However, there’s one big difference. You only have to pay capital gains taxes on stock profits if you sell.

Since Bitcoin and some other digital currencies can be exchanged for goods and services, you can realize a taxable profit even if you don’t sell them. Let’s say that you bought $1,000 worth of Bitcoin several years ago, and in 2018 you used that Bitcoin (which is now worth much more) to buy a $300,000 Rolls-Royce. Even though you never technically “sold” your Bitcoin, you exchanged it for something worth $299,000 more than your cost basis in the Bitcoin, so it triggers a taxable event.