Definition ∞ The original purchase price of a digital asset, including any associated fees or commissions. This value serves as a baseline for calculating capital gains or losses when the asset is eventually sold. Accurately determining ‘Cost Basis’ is essential for tax reporting and investment performance evaluation.
Context ∞ The ‘Cost Basis’ for many digital assets acquired during earlier market cycles is a significant factor in current investor decision-making. Discussions frequently address its implications for taxable events, particularly when assets are moved between wallets or exchanged. Clarity on this metric is paramount for compliant and informed financial management within the digital asset ecosystem.
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