Accounting

Fair Market Value

The price an asset would sell for on the open market; the benchmark used for calculating crypto income and gains globally.

World

Quick answer

Fair market value is the price crypto would fetch between a willing buyer and seller — and it's the starting point for every tax calculation.

Understanding Fair Market Value on crypto

Fair market value (FMV) is the price at which a crypto asset would change hands between a willing buyer and a willing seller, neither under compulsion to transact and both having reasonable knowledge of the facts. For cryptocurrency, FMV is typically determined by reference to the spot price on reputable exchanges at the time of the transaction. FMV is used to value crypto income (staking rewards, mining, airdrops, salaries) at the point of receipt, and to determine disposal proceeds when crypto is exchanged for goods, services, or other assets rather than sold for fiat.

What this means for your crypto activity

FMV on every event

Every income event and non-fiat disposal requires an FMV calculation in your local currency at the time of the transaction.

Timing precision

Using end-of-day prices vs precise transaction-time prices can create material differences for active traders.

Illiquid tokens

For illiquid or newly issued tokens, FMV may be difficult to determine — document your methodology.

Price API sources

Tax software typically pulls FMV from price APIs (CoinGecko, CoinMarketCap) at transaction timestamp.

Income valuation

Staking rewards, mining income, and airdrop income are all valued at FMV on receipt.

Every income event and non-fiat disposal requires an FMV calculation in your local currency at the time of the transaction.
Using end-of-day prices vs precise transaction-time prices can create material differences for active traders.
For illiquid or newly issued tokens, FMV may be difficult to determine — document your methodology.
Tax software typically pulls FMV from price APIs (CoinGecko, CoinMarketCap) at transaction timestamp.
Staking rewards, mining income, and airdrop income are all valued at FMV on receipt.

Seeing it in action

Example scenario

Anna receives 100 MATIC as a staking reward when MATIC is trading at $0.85. Her taxable income is 100 × $0.85 = $85, valued at the FMV at the moment the reward is received. This $85 also becomes her cost basis in the 100 MATIC — used for CGT when she later sells.

How this works across jurisdictions

World
FMV is the universal benchmark for crypto valuation across all jurisdictions; reputable exchange spot prices at transaction timestamp are the standard reference; document the source used for all FMV determinations.