How Are Capital Gains Typically Classified for Crypto Spot Trading?

Capital gains from crypto spot trading are classified as either short-term or long-term for tax purposes. This distinction is based on the holding period of the asset.

If the cryptocurrency is held for one year or less, the resulting profit is a short-term capital gain, typically taxed at ordinary income rates. If held for over one year, it is a long-term capital gain, which generally benefits from lower tax rates.

Taxable events include selling for fiat or trading one crypto for another.