The Giving Block, a cryptocurrency donation and fundraising platform, has recorded a 583% increase in digital asset donations in 2021. The platform, through its initiative Crypto Giving Tuesday, handled $2.4 million in contributions. The average donation amount was $12,600, up by 20% over 2020.
The total donation volume was made up of five cryptocurrencies:
I. Ethereum (ETH)
ii. Bitcoin (BTC)
iii. USD Coin (USDC)
iv. Uniswap (UNI)
v. Tezos (XTZ)
Ethereum was the most preferred cryptocurrency for donation. More than USD1.2 million worth of ETH was donated, compared to USD885 worth of bitcoin. A little over 1,000 NGOs participated in Crypto Giving Tuesday.
The organization was able to surpass its goal of processing $100 million in donations this year. Pat Duffy, Co-Founder of The Giving Block, said their collection shows that crypto is undeniably one of the most powerful forces for good. He said it has motivated hundreds of conversations with donors, companies, and projects. The Giving Block also runs the Bag Season and NFTuesday.
45% of the cryptocurrency owners, according to Fidelity Charitable, donated $1,000 or more to the charity in 2020. It said the majority of cryptocurrency investors are not aware that their crypto assets can be donated to charity. The positive side is that they can bypass the capital gains tax. Donors have the advantage of tax deductions upfront. They would be subject to the tax if they convert the cryptocurrencies into cash.
Tony Oommen, a vice-president and charity planning consultant, Fidelity Charitable, said they have come across situations where someone donates a cryptocurrency, and it could lose 20% of its value in a day if they don’t sell it right away.
Due to the digital assets’ high volatility, donor-advised fund sponsors, convert it into cash right away. But there are some NGOs that prefer to hold the cryptocurrencies as it is, without converting them into traditional currency.