Cryptofolio

Most crypto investors have no idea if they’re actually profitable. They check their portfolio balance, see a number, and assume that’s what they made. It’s not. Here’s why, and what we’re building to fix it. 🧵👇

AI can file your return. It can't fix the data going into it. If your cost basis is wrong because transfers weren't linked, fees weren't tracked, or staking income wasn't classified, AI will just file those wrong numbers faster and more confidently than a CPA would. The bottleneck was never the filing. It's the data underneath it. We automate this, so you can plug it into your model of choice.

CPAs think we DIY our taxes to save money. - We do it because AI will answer your 15th question about a deduction without watching the clock. - We do it because AI won't punt your return to October and act like it's normal. - We do it because AI doesn't bill you for asking "wait, why?" - We do it because AI explains what it's doing instead of just doing it. - We do it because AI doesn't have 200 other clients ahead of you in March. - We do it because AI doesn't disappear from February to April. - We do it because AI won't judge you for not knowing what a 1099-NEC is. - We do it because AI gives you the expertise without taking away the understanding. - We do it because AI lets you file at 11pm on a Sunday. - We do it because AI doesn't charge you more for having multiple income streams. - We do it because AI turns "just sign here" into "here's what you're signing and why." - We do it because AI doesn't file an extension on your behalf and call it a strategy. - We do it because AI makes you smarter about your taxes every year. Your CPA makes you more dependent every year. - We do it because AI doesn't sigh when you ask what quarterly estimated payments are for the third time. - We do it because AI doesn't care if your situation is "complicated." - We do it because you can ask AI "what if I made more this year" and get an answer in 5 seconds instead of scheduling a call. - We do it because AI won't tell you in April that you're actually filing in October.

@jussy_world Highest alpha play is to set up your toolbox for the next bull cycle. Find your research pipelines, trading platforms, and P&L tracking apps

Memes are down bad NFTs are dead ICOs dumping InfoFi shut down completely DeFi lost a lot of trust Prediction markets are Insider Trading so wtf are we actually supposed to do here everyone's losing money and nothing is working what's still making sense to you right now?

We wrote the full breakdown. What your app is missing, why the number on your screen is wrong, and what it actually takes to answer “how much did I make.” cryptofolio.ai/blog/what-your…

A real profit number requires six metrics, not one: 👉Net worth 👉Cost basis 👉Net profit 👉Realized gains 👉Income earned 👉Fees paid If your app only shows net worth, you’re seeing one piece of the picture.

Your portfolio app shows $15,000. That’s your balance, not your profit. It could mean that you invested $10,000 and made $5,000. Or you invested $18,000 and are down $3,000. Same screen. Completely different outcome. Your app shows the same number for both. 🧵👇

Options on multi-crypto trusts means investors can now hedge or gain exposure to baskets of crypto assets through regulated instruments on NYSE. The tracking side gets interesting. Options on a trust holding multiple cryptos create cost basis calculations tied to the underlying basket composition, not just the option price. If the trust rebalances, the basis shifts. If you exercise, the tax treatment depends on the underlying assets. More instruments, more taxable events, more reasons to track from day one.

🇺🇸 JUST IN: US SEC approves listing of options on multi-crypto commodity trusts on NYSE.

@Slamma5284 @coinbase Better tools coming soon. We launch this month and track your portfolio + cost basis year round so come tax time, no need to reconstruct your P&L. Sign up for beta cryptofolio.ai

After my experience filing crypto taxes this year it’s safe to say I’ll never buy crypto again. Ibit, ETFs, or stocks. Thanks @coinbase

It’s an interesting point. The cross-exchange enforcement problem is the same one that already exists with cost basis. Brokers don’t coordinate. Each exchange sees its own transactions. Nobody has the full picture except the taxpayer. If wash sale rules come to crypto, the burden of tracking falls entirely on the individual. Your exchange won’t know you rebought the same token on a different platform 3 days later. You’d need to track every buy and sell across every wallet and exchange yourself, with dates and amounts that prove the 30-day window wasn’t violated. That’s already what accurate cost basis tracking requires. The infrastructure gap is the same either way.

Another part of the Digital Asset Parity Act proposal is the idea of applying wash sale rules to cryptocurrency. Right now, wash sale rules apply to stocks, but not to crypto. A wash sale happens when you sell an asset at a loss, claim that loss, and then buy the same asset back within 30 days. Under current stock rules, that loss is disallowed. Investors in traditional markets are very familiar with this rule, usually because they have been burned by it at some point. In practice, the system has a loophole. Wash sales are reported through 1099 forms, and different brokerages do not coordinate with each other. So investors can sell on one platform and rebuy on another, avoiding detection. If similar rules are applied to crypto, the same workaround would likely exist. You could simply trade across multiple exchanges. That raises the real question: what is the purpose of the wash sale rule? It is meant to change behavior. But if it is easy to bypass, it ends up mostly affecting inexperienced investors who do not know how to work around it. In that sense, it becomes less of a meaningful tax rule and more of a penalty on beginners. The only real justification for applying it to crypto is that it already exists for stocks. But that is not a strong argument. Just because one group deals with it does not mean it should be expanded. A stronger argument would be to remove the wash sale rule entirely, for both stocks and crypto. If someone wants to reset their cost basis by selling and rebuying, the IRS will still collect taxes when the asset is eventually sold at a gain.

The full guide covers: income recognition timing, cost basis rules, unclaimed airdrops, tokens with no market price, hard forks vs promotional drops, and the five most common airdrop tax mistakes. cryptofolio.ai/blog/crypto-ai…

Claimed an airdrop through a smart contract? The income event happens at the time of the claim transaction, not when the airdrop was announced. The gas fee on that claim is also a separate taxable disposal of $ETH through your FIFO lot queue.

Airdrops aren’t free. They’re taxed twice. Once as income when you receive them. Once as capital gains when you sell. Most people miss the first one entirely. Here’s how it actually works. 🧵👇

The CLARITY Act defines which agency regulates what. It doesn't change how individual holders need to track their portfolios. Whether your token's classified as a digital commodity under the CFTC or an ancillary asset under the SEC, you still need to know what you paid for it, what it's worth now, and what you owe when you sell. The reporting obligations on the individual side stay the same: cost basis, realized gains, income from staking and airdrops, all tracked per wallet. Regulatory clarity is overdue. But the tracking problem exists regardless of which agency oversees the market.

The Clarity Act and the future digital asset market reut.rs/3PyV4Vs reut.rs/3PyV4Vs

The wallet-by-wallet transition is what catches people off guard. Even if you use one of those tools to calculate your cost basis now, the numbers are only right if the tool correctly allocated your existing holdings across wallets under the safe harbor before January 1, 2025. Most people connected their wallets to a tax tool this month and assumed it handled everything. But if the tool started tracking from the connection date instead of importing full history back to wallet creation, the cost basis it assigned to each wallet's lot queue is based on incomplete data. The tool matters. But when the tool started tracking matters more.

If you received a 1099-DA and still need to calculate your cost basis, I'd recommend using a crypto tax software like Cointracking, Summ, Koinly, etc. if your transaction history is simple, or working with a crypto-friendly CPA if it's complex. I wish it wasn't so complex, but with the safe harbor reallocation to move to the wallet-by-wallet accounting method, the 1099-DAs, and the taxpayer-provided cost basis in 2025, reconciling your crypto transactions incorrectly could cause you to overpay on your taxes/expose you to more audit risk.

We wrote the full walkthrough with worked numbers at every step. Covers Aave deposits, yield accrual, withdrawals, DEX swaps, Lido staking, LP positions, and bridges. cryptofolio.ai/blog/defi-cost…

Step 4: Swap half for USDC on Uniswap. Taxable disposal. Stake the other half on Lido. Possibly taxable (the IRS hasn’t ruled on liquid staking tokens). Then stETH rebases daily, each increment creating more income and more tax lots. One DeFi cycle. Six cost basis events. Miss any one and everything after it is wrong.

You buy 10 ETH for $20,000. Deposit it into Aave. Earn yield for 3 months. Withdraw. Swap half on Uniswap. Stake the rest on Lido. When you sell, what’s your cost basis? If you can’t answer that with a specific number, your P&L is a guess. 🧵👇