Cryptocurrency Donations Are on the Rise As Bitcoins Price Continues to Surge
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Bitcoin continues to reach new heights. Notable technology leaders like Elon Musk and large corporations like MicroStrategy and Square are pouring their support and money behind Bitcoin, the digital currency. Visa announced it will add cryptocurrency to its payment network, opening up cryptocurrency to their 70 million merchants around the world. PayPal already allows its 346 million users to buy, sell, and hold cryptocurrency.
You might be surprised to hear that the cryptocurrency market is now worth more than $1 trillion with over 100 million users. Bitcoin alone has a market capitalization of $680B, that has surpassed Visa, Disney, and Facebook. Momentum keeps building. Every week, if not day, Bitcoin gets bigger and with it future cryptocurrency donations for nonprofits.
Why donate cryptocurrency?
Similar to stock donations, crypto offers a more tax efficient way to donate because cryptocurrency is classified as property. For donors, that means no capital gains tax and a fair market value deduction. That can often mean a 20-30%+ larger donation and deduction. Donating bitcoin directly can benefit both the donor and the nonprofit, by bypassing the capital gains tax.
Bitcoin’s rising price means increasing future donation dollars for nonprofits. Widespread adoption of Bitcoin means new potential donors for nonprofits.
Crypto donation volume is hitting record highs
During the month of December, The Giving Block facilitated a record $2.1 million in cryptocurrency donations to nonprofits. This was part of their end of year BAG Season campaign. The biggest names in cryptocurrency come together with the biggest names in philanthropy for the biggest month of cryptocurrency giving.
This strong tax incentive to donate crypto is only now becoming common knowledge in the crypto-verse. This combined with all-time high prices has resulted in a massive increase of cryptocurrency donations in December 2020, and is currently trending toward a parabolic growth of donations for 2021.
Who donates cryptocurrency?
With over 100,000,000 users, Bitcoin has become more popular than Venmo among Millennial and Gen-Z donors. And, the user-base is doubling every 1.5 years. Bitcoin is a rising star among young donors, with nearly half of Millennial and Gen-Z investors owning cryptocurrencies. Over 60% of cryptocurrency users are under the age of 40.
Nonprofits can diversify their revenue streams by accepting cryptocurrency donations and open themselves up to a whole new pool of donors. Most crypto donors only donate in crypto so they tend to be new donors. These nonprofits stand out to the crypto community, stake their claim as early supporters and adopters, and as a result receive crypto donations.
What nonprofits should accept cryptocurrency donations?
Accepting cryptocurrency donation is the perfect solution for organizations whose fundraising has been affected by COVID and 2020 overall. It’s a low effort and low resource way to grow your revenue without needing to hire more staff. However, it is important to have the right guidance to set up your account and reach the right audience.
The Giving Block makes accepting cryptocurrency donations easy for nonprofits, with the #1 crypto solution for universities, faith-based, and other charities. They walk you through opening an account, receiving donations, automatically converting them for cash, and issuing automated tax receipts. With 100,000,000 users, crypto has become more popular than Venmo among Millennial and Gen-Z donors.