Who Sells Cryptocurrency?

49 Pages Posted: 7 Nov 2022

See all articles by Jeffrey L. Hoopes

Jeffrey L. Hoopes

University of North Carolina (UNC) at Chapel Hill - Accounting Area

Tyler Menzer

University of Iowa

Jaron H. Wilde

University of Iowa - Henry B. Tippie College of Business

Date Written: October 27, 2022


Cryptocurrency has become a major force in the financial system in the last decade. However, even as regulators and policymakers across the globe deliberate on how to account for, regulate, tax, and oversee digital assets and cryptocurrency marketplaces, there is little population-level empirical evidence on cryptocurrency users. Providing broad-based evidence on cryptocurrency sellers and activities is critical to policy deliberations because the nature of regulation is often predicated on who is involved in particular activities. Using administrative data, we provide information on the general characteristics of cryptocurrency users who report their sales to the government, focusing on those individuals who own cryptocurrency directly on the blockchain or through cryptocurrency exchanges. Among the insightful patterns we document are ages, incomes, professions, geographic residences, student and marital statuses, and reported income from gambling of cryptocurrency sellers. The average income of cryptocurrency sellers has declined over time, suggesting the base of sellers has expanded in recent years; the average cryptocurrency seller is just under 33 years old—much younger than the average non-crypto investor at 56—-and this gap has grown over time. Moreover, from 2013 to 2020, the population of individuals selling cryptocurrency evolved from small clusters of people largely working in related industries and residing in coastal states (e.g., California and New York) to an expansive population employed in a broad range of industries and spread out across the country. By documenting compelling patterns of increasingly broad-based use of cryptocurrencies, this study contributes timely evidence to the significant regulatory deliberations and towards an innate understanding of these relatively new financial products.

Keywords: Cryptocurrency, Bitcoin, IRS, Accounting, Finance, Individual Taxation

JEL Classification: M49, G11, H20

Suggested Citation

Hoopes, Jeffrey L. and Menzer, Tyler and Wilde, Jaron H., Who Sells Cryptocurrency? (October 27, 2022). Available at SSRN: https://ssrn.com/abstract=4261066 or http://dx.doi.org/10.2139/ssrn.4261066

Jeffrey L. Hoopes

University of North Carolina (UNC) at Chapel Hill - Accounting Area ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Tyler Menzer (Contact Author)

University of Iowa ( email )

108 Pappajohn Business Building
Iowa City, 52242-1000
United States

Jaron H. Wilde

University of Iowa - Henry B. Tippie College of Business ( email )

5020 Main Library
Iowa City, IA 52242-1000
United States

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