Yes, your Bitcoin, Ethereum, and other cryptocurrencies are taxable. The IRS considers cryptocurrency holdings to be “property” for tax purposes, which means virtual currency is taxed in the same way as any other assets you own, like stocks or gold.

However, to be accurate when you're reporting your taxes, you'll need to be somewhat more organized throughout the year than someone who doesn't have investments. For example, you'll need to ensure that with each cryptocurrency transaction, you have a log of the amount you spent and its market value at the time you used it.