How to Give Bitcoin as a Gift to a Child

A savings bond from grandma was the classic move. Now you're thinking about giving a kid Bitcoin instead. I get it. A $50 savings bond earns basically nothing.¹ $50 in Bitcoin has at least a shot at being worth something meaningful in 15 years. Here's how to actually do it.

The simplest way to give Bitcoin as a gift to a child is to buy it on an exchange like River and hold it in your custody until the child is old enough to manage their own wallet. For a physical gift, use a Ballet card ($30) or an OpenDime ($20). Your cost basis transfers to the recipient when you gift it, and gifts under $18,000/year don't require a gift tax return.⁶

Option 1: Buy it on an exchange and hold it for them

The simplest approach. Buy Bitcoin on River, Strike, or Cash App in your own account. Mentally earmark it for the kid. Transfer it when they're old enough to manage their own wallet.

• Pros: Takes 5 minutes. No extra setup. You keep control.
• Cons: Not very gift-like. Hard to wrap and put under a tree. The kid doesn't get to see or touch anything.

This is what I do for birthdays when the kid is under 10. I buy the Bitcoin, text the parents a screenshot of the purchase, and keep it in my custody until the kid is older.

Option 2: Load a physical Bitcoin card

Companies like The Bitcoin Company and Coinkite sell gift cards and physical items you can load with Bitcoin. The Ballet wallet is a physical card with a private key hidden under a scratch-off.² It feels like a real gift.

• Pros: Tangible. Kids love unwrapping something physical. The Ballet card costs about $30.
• Cons: The private key is on the card. If the kid loses it, the Bitcoin is gone. You're trusting the manufacturer didn't keep a copy of the keys (Ballet claims they don't, and their two-factor key generation process is auditable).

Option 3: Paper wallet (old school, works for small amounts)

Generate a Bitcoin address and private key offline using a tool like bitaddress.org (on an air-gapped computer, never online). Print it. Fold it into a card. Send Bitcoin to the address.

• Pros: Free. No third-party trust. You can put it in a birthday card.
• Cons: If the paper is lost, damaged, or thrown away, the Bitcoin is gone. Kids lose things. A lot. I'd only do this for small amounts ($10-25) with a backup copy stored somewhere safe.

Option 4: OpenDime (a physical Bitcoin bearer instrument)

An OpenDime is a small USB device made by Coinkite.³ You plug it in, load Bitcoin onto it, and hand it to someone. They can verify the balance but can't spend it until they physically break a seal on the device. It's basically a physical Bitcoin bearer instrument.

• Pros: Very cool. Feels like handing someone a gold coin. About $20 per stick.
• Cons: If it breaks or gets lost before the Bitcoin is swept to a proper wallet, the funds could be gone. Best as a gift for a teenager who'll actually use it, not a 6-year-old who'll put it in the washing machine.

What are the tax rules for gifting Bitcoin to a child?

Giving Bitcoin as a gift is a taxable event for the recipient when they sell (not when you give it). Your cost basis transfers to them.⁴

• If you bought $50 of Bitcoin and it's worth $200 when you gift it, the kid's cost basis is $50. They owe capital gains on $150 when they sell.
• You can gift up to $18,000/year per recipient (2024) without filing a gift tax return.⁶ Bitcoin gifts count toward this limit at fair market value on the date of the gift.
• If you're giving to someone else's kid (niece, nephew, friend's child), make sure the parents know about the tax implications before the kid sells it in 15 years and gets a surprise.

For a deeper look at how minors own Bitcoin legally, including UTMA accounts and kiddie tax rules, check our dedicated guide.

What gift method works best by age?

• Under 8: Buy it in your account, hold it for them. Give a printed “Bitcoin Certificate” as the physical gift (make one yourself, it's more fun).
• Ages 8-12: Ballet card or paper wallet with a small amount ($10-50). Keep a backup of the keys yourself.
• Ages 13+: OpenDime or a direct transfer to their own wallet (if they have one set up). This age group can handle the responsibility of not losing a USB stick. Probably.

Saylor's take on this is worth hearing: “Say you actually wanted to take a million dollars and give it to your daughter or your granddaughter in 30 years, how would you do that? I can't do it with real estate, they tax it away from you. Now we have a better idea: you can buy a bar of bitcoin and put it in your hard self-custody wallet and no one can take it away from you.”⁸ The scale is different for a birthday gift, but the principle is the same.

How do I explain a Bitcoin gift to a kid?

• “Why is Grandpa giving me internet money?” Because he thinks it might be worth a lot more by the time you're grown up. It's like someone giving you Apple stock in 1997. Maybe it works out huge, maybe it doesn't. But the bet is interesting. (Here's what Bitcoin actually is in plain English.)
• “Can I spend it now?” You could, but the whole point is to save it. It's like a tree that someone planted for you. Give it time to grow.
• “What if I lose the card?” That's why we keep a backup. But this is a good lesson: with Bitcoin, you're responsible for keeping it safe. Nobody else will do it for you. (More on staying safe in our safety guide.)

Try this at home

DIY Bitcoin birthday card (20 minutes, ages 8+). Buy $10-25 of Bitcoin. Make a card that says “I gave you [amount] sats on [date] when Bitcoin was $[price].” Inside, include a QR code of the wallet address (you can screenshot it from your wallet app and print it). Write on the back: “Check this price on your 18th birthday.” It costs almost nothing to make and could be the most valuable birthday card they ever get.

Materials: Card stock, a printer, $10-25, a wallet app. Time: 20 minutes.

Sources

1. TreasuryDirect, I Bond Interest Rates
2. Ballet, How Ballet Wallets Work (Two-Factor Key Generation)
3. Coinkite, OpenDime: Bitcoin Bearer Instrument
4. IRS, Frequently Asked Questions on Virtual Currency Transactions (cost basis transfer rules)
5. IRS, Topic No. 409: Capital Gains and Losses
6. IRS, Frequently Asked Questions on Gift Taxes (2024 annual exclusion: $18,000)
7. Nakamoto, Satoshi. Bitcoin: A Peer-to-Peer Electronic Cash System (2008)
8. Saylor, Michael. Hedgeye Interview, discussing Bitcoin as a generational wealth transfer vehicle