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Holding Crypto
Holding, or HODLing, is the most common form of cryptocurrency investment. Simply buying crypto assets and holding them for extended periods of time, is a sure fire way to be classified as an investor and not a trader by SARS.
Holding is universal and can be done through a centralized exchange, or your own self-custodial hot or cold wallet, such as a ledger.
By simply holding cryptocurrency you are avoiding disposals and therefore capital gains tax, but you may still be prone to income tax if you are making a gain from any held cryptocurrency.
Since 2017 Dan has been a Bitcoin Maximalist, strongly believing cryptocurrency is the future of finance. Ever since he has been purchasing R300 of Bitcoin every week, accumulating a total of R78,000 in his Bitcoin fund, which he keeps in cold storage on his ledger.
As Dan has never sold his Bitcoin, and only plans to in five or more years, he has never made a disposal.
Therefore, Dan has a tax liability of zero for holding his cryptocurrency.
[Image representing an investor holding cryptocurrency safely in storage]
Only when you sell, exchange or gift your cryptocurrency will you have to pay any capital gains or record capital losses.