Do People Lose Money in Crypto? Risks, Stats, and How to Protect Your Investment
Explore why many investors lose money in crypto, see real loss data, compare risks with traditional assets, and learn practical steps to protect your investment.
Crypto Tax: What You Need to Know About Reporting Cryptocurrency in the UK
When you buy, sell, or earn cryptocurrency, digital assets like Bitcoin or Ethereum that operate independently of banks. Also known as crypto, it can be traded, held as an investment, or used to earn passive income through staking or lending. The UK tax rules treat it like property—not currency. That means every time you trade one crypto for another, sell it for pounds, or even use it to buy coffee, you might owe tax. It’s not just about big profits; even small trades can trigger a tax event.
There are two main ways crypto can create a tax bill: capital gains, the profit you make when you sell or trade crypto for more than you paid, and crypto income, earnings from staking, mining, or airdrops that count as taxable income. The annual capital gains allowance for 2024/25 is £3,000. If your total gains from all crypto trades hit that number, you pay tax on anything above it. For income, you pay income tax at your normal rate—whether you’re in the 20%, 40%, or 45% bracket. HMRC tracks crypto transactions through exchanges, so hiding trades isn’t an option. You’re legally required to report them.
Many people think if they don’t cash out to pounds, they don’t owe tax. That’s not true. Swapping Bitcoin for Ethereum? That’s a taxable disposal. Getting rewarded in USDT for staking your Cardano? That’s income. Even sending crypto to a friend as a gift can count as a disposal if it’s worth more than you paid. The key is tracking your purchase price, date, and the value in pounds at the time of every transaction. Tools can help, but the responsibility is yours.
What you’ll find below are real, practical guides that break down exactly how crypto tax works in the UK. No jargon. No fluff. Just clear answers on when you owe money, how to calculate it, what records to keep, and how to avoid common mistakes. Whether you’re new to crypto or have been trading for years, these posts give you the facts you need to stay compliant—and keep more of your money.
