Definition ∞ Bitcoin cost basis is the original purchase price of Bitcoin, used for tax and investment calculations. This metric represents the average price at which an investor acquired their Bitcoin holdings, including any associated fees. It serves as a crucial reference point for determining realized gains or losses when Bitcoin is sold. This impacts tax liabilities and investment performance assessments.
Context ∞ Bitcoin cost basis is a central concept for digital asset investors, particularly for regulatory compliance and financial reporting. Discussions in crypto news often pertain to the varying cost bases across different investor cohorts. This provides insight into potential selling pressure or market support levels as prices change.
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