Because the IRS treats cryptocurrency as a capital asset, you must track your basis in the currency and record it as a capital gain or loss at disposition. That means if you bought $100 worth of Bitcoin in January 2020 and sold it for $1,000 in February 2021, you will have a long-term capital gain of $900 ($1,000 sale price – $100 basis).
When first launched on Coinbase in 2012 for a price of $22 per USD for $1 million worth of the token, the currency quickly jumped over 311,000% in under a decade (at its all-time high of $68,543).
In November 2021, Bitcoin’s market capitalization rested above $1.2 trillion. Earlier in the year, it exceeded $1 trillion for the first time. Meaning, if you wanted to buy every Bitcoin in existence, you would need at least $1.2 trillion to purchase them all.