Definition ∞ ETF Cost Basis refers to the original price or value of an Exchange-Traded Fund unit, including any commissions or fees, used to calculate capital gains or losses for tax purposes. For cryptocurrency ETFs, this metric is crucial for investors to determine their taxable profit or loss when selling their shares. Accurate record-keeping of the cost basis is essential for compliance with tax regulations.
Context ∞ The introduction of spot Bitcoin and Ethereum ETFs has brought the ETF cost basis into sharper focus for traditional investors entering the digital asset space. Ongoing discussions involve the complexities of tracking cost basis across various purchase dates and potential tax implications of different accounting methods. Regulatory clarity and standardized reporting tools are critical for simplifying tax obligations for these investment vehicles.
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