Yes, cryptocurrency profits are treated like capital gains and are therefore subject to tax. Please note that you are responsible for paying taxes on your cryptocurrency winnings even if you do not receive cash from your winnings.

The IRS treats crypto assets like traditional investments, so they are considered assets and are taxed as such. To calculate cryptocurrency profits tax, subtract the cost from the asset’s selling price. The resulting amount is the profit that could have been earned by trading or holding an asset over a period of time. Cryptocurrency tax liability will then be calculated based on the aforementioned tax rates and holding period.