When you buy cryptocurrency, the crypto cost basis, the original price you paid for a crypto asset including fees. Also known as purchase price, it’s the foundation for calculating your taxes, profits, or losses when you sell. This isn’t just accounting jargon—it’s the difference between paying the right amount in taxes and getting hit with a surprise bill from the IRS or your local tax agency.
Most people think their cost basis is just the price they saw on the screen when they bought Bitcoin or Ethereum. But it’s more than that. It includes transaction fees, gas costs, and even the value of any crypto you traded to get there. If you swapped 0.5 BTC for SOL, your cost basis for that SOL isn’t the SOL price at that moment—it’s the dollar value of the 0.5 BTC you gave up, plus the gas fee. This matters because the tax system doesn’t care how you got your crypto. It only cares about what you paid for it. And if you’re using multiple exchanges, wallets, or doing frequent swaps, tracking this manually is a nightmare. That’s why tools like Koinly, CoinTracker, and even spreadsheets become essential. Without accurate cost basis data, you can’t properly report capital gains or losses. And if you’re selling crypto in a rising market, even a small mistake can turn a $500 tax bill into a $5,000 one.
Some people think memecoins like PENGY or HACHI don’t need cost basis tracking because they’re "just fun." But the tax authorities don’t care if your token is a dog or an AI rap album. If you bought it and later sold it for more, you owe tax. Same goes for tokens like MTRM or ETHX—whether it’s a utility token, a staking reward, or a meme, your cost basis still applies. Even if you got crypto through an airdrop like CELT or WELL, you still need to assign it a cost basis—usually zero at receipt, but that changes the moment you sell it. And if you’ve ever used a P2P platform like in Russia or Myanmar to buy crypto with cash, that cash amount is your cost basis, not the market price.
What you’ll find below isn’t a list of coins to buy. It’s a collection of real stories about people who got burned by ignoring cost basis, misunderstood what counted as a taxable event, or assumed their exchange gave them the right numbers. You’ll see how FRED, VORTEX, and PVC Meta all had price swings that triggered tax events no one planned for. You’ll learn why Deribit traders need to track cost basis differently than those buying on Crypto.com. And you’ll see how someone who bought crypto in 2020 and held through 2025 might owe more tax than they ever imagined—not because they made a bad trade, but because they never tracked their original cost.
Learn how to calculate crypto transaction fees on Bitcoin, Ethereum, and Polygon, plus how to track cost basis for taxes. Avoid overpaying network fees and reduce your tax bill with HIFO accounting.