How Is Mining Income Taxed Differently from Capital Gains on Crypto?

Cryptocurrency received from mining is taxed as ordinary income at its fair market value on the day it is received. This income is also potentially subject to self-employment tax.

Capital gains, on the other hand, arise only when the mined crypto is later sold or exchanged, and the gain is calculated based on the difference between the sale price and the cost basis (the FMV at receipt).