Only 49% of respondents correctly answered that cryptocurrency triggers a tax event upon any sale.
According to the joint “2026 Crypto Tax Readiness Report” from Coinbase and CoinTracker, more than half of American crypto investors do not understand when a taxable event occurs with digital assets.
The survey polled 3,000 US crypto users in late 2025. Nearly a quarter of investors mistakenly believe that simply transferring coins between wallets is also taxable.
The Cost Basis Calculation Problem
Most investors intend to comply with tax laws but face serious difficulties. On average, users operate across 2.5 platforms or wallets. 83% hold assets in self-custodial wallets. Only 35% of respondents have ever adjusted their cost basis.
The introduction of new Form 1099-DA adds further complexity. Coinbase expects to send more than four million such forms in 2026 to users whose transaction volume exceeded $600.
More than 60% of the exchange’s clients have incomplete cost basis data. This results from moving assets between platforms and DeFi protocols. Even routine actions—paying gas fees on Ethereum or making stablecoin payments—technically count as taxable events.
What This Means for the Market?
Coinbase notes that high tax burdens and reporting complexity could slow crypto adoption and innovation. Industry representatives believe standardized reporting will benefit the market long-term by bringing crypto into alignment with traditional financial instruments.
However, during this transition, many users risk overpaying, making errors on filings, or reducing their on-chain activity.
Related: Cryptocurrency for Beginners—Ultimate Guide Without Extra Theory
