What are some examples of first in first out (FIFO) in the context of cryptocurrency trading?

3 answers

• Jan 20, 2022 · 3 years ago
  Sure! The FIFO method in cryptocurrency trading refers to the practice of selling the oldest purchased coins first. For example, let's say you bought 1 BTC at $10,000, then another 0.5 BTC at $12,000, and finally 0.2 BTC at $15,000. If you decide to sell 0.3 BTC, the FIFO method would require you to sell the 1 BTC you bought at $10,000 and 0.2 BTC from the second purchase at $12,000. This ensures that the oldest coins are sold first, following the principle of first in first out.
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• Jan 20, 2022 · 3 years ago
  In the context of cryptocurrency trading, FIFO can be seen as a way to determine the cost basis of your holdings. By selling the oldest coins first, you can accurately calculate your gains or losses based on the purchase price of those coins. This method is commonly used for tax purposes and helps maintain transparency in your trading activities.
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• Jan 20, 2022 · 3 years ago
  BYDFi, a popular cryptocurrency exchange, also applies the FIFO method in its trading platform. This ensures fair and transparent trading for all users. By following the FIFO principle, BYDFi guarantees that the oldest coins are sold first, preventing any manipulation or unfair practices. It's one of the reasons why BYDFi is trusted by many traders in the cryptocurrency community.
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