Cryptocurrency for Financial Advisors: The Season of Giving with Bitcoin

As we conclude our final Crypto for Advisors newsletter of 2024, we reflect on a year of significant growth. With 51 newsletters published, our readership has nearly doubled from 24,000 to 44,000 active subscribers. We appreciate the engagement and feedback from our readers and look forward to continuing the conversation in 2025. This issue features Phil Geiger from Unchained, who explains the concept of bitcoin donor-advised funds and their functionality. Additionally, Eric Tomaszewski from Verde Capital Management addresses questions about funds and tax implications in our 'Ask an Expert' section. The rise of donor-advised funds has been notable, with over 2 million accounts in the United States holding a combined value of over $250 billion. These funds offer donors the flexibility to contribute assets, receive an immediate tax deduction, and recommend grants to charities over time. The tax benefits of donor-advised funds are a primary reason for their popularity, allowing donors to take an immediate charitable deduction for the full value of their contribution. Bitcoin donor-advised funds combine the flexibility and tax benefits of traditional funds with the unique advantages of on-chain bitcoin, enabling donors to contribute bitcoin directly and receive the same tax benefits as donating appreciated securities. The emergence of bitcoin donor-advised funds has seen early success, with the world's first bitcoin grant from a donor-advised fund going to the Base58 School of Engineering and a one-bitcoin grant gifted to the Human Rights Foundation. In our 'Ask an Expert' section, Eric Tomaszewski discusses how financial advisors approach conversations about charitable giving, highlighting the importance of purpose and selflessness. He also recommends resources such as The Giving Block and Endaoment for donors and charitable organizations. Tomaszewski notes that giving is particularly relevant in today's accelerating markets, as it allows donors to reduce tax liabilities and mitigate volatility risks while creating opportunities for legacy and multi-generational giving.