CoinLedger, a crypto tax software provider, has revealed that crypto investors made an average of nearly $900 in net gains from selling crypto in 2023. This is a significant improvement from the previous year, which saw billions of dollars wiped out due to the collapse of several crypto firms.
According to CoinLedger’s analysis of data from 500,000 users, the average crypto investor earned $887.60 in realized gains in 2023 as the industry started to recover. Realized gains and losses occur when investors sell crypto at a different price than what they initially acquired it for. In the United States, this is considered a disposal event and is subject to tax.
CoinLedger CEO David Kemmerer believes that these results indicate a possible resurgence in the cryptocurrency market. In 2022, the total crypto market cap plummeted by over $1.5 billion due to collapses in the crypto industry, including the Terra ecosystem, FTX crypto exchange, and crypto lenders Celsius and Voyager.
Ether sales accounted for most of the realized losses in 2022. However, the tides turned in 2023, driven by multiple U.S. bank collapses and optimism surrounding the launch of spot Bitcoin exchange-traded funds, which were eventually approved in January.
CoinLedger noted that the data supports the notion that Bitcoin holders are less likely to sell their coins compared to investors of other cryptocurrencies. The majority of CoinLedger’s users are based in the U.S., making up 80% of the user base, although the data also includes users from Australia, Canada, and other countries.
Overall, the crypto market capitalization significantly increased in the fourth quarter of 2023, signaling a positive trend for the industry.