Coinpanda calculates the acquisition cost (cost basis) for an asset bought from the price of the asset sold by default. This means that if you are trading a coin for another, and we don't have prices for the coin sold, the cost basis for the coin bought will be zero (or equal to the fee in case you paid a fee). This can therefore result in unnatural high gains when you later sell the coins that were bought. Let's look at an example:

  • January 15: 150 USDC → 1000 ABCDE (eg. on Uniswap)

  • March 18: 1000 ABCDE → 200 USDT + 0.0025 ETH fee

  • March 20: 200 USDT → 0.015 ETH

Since the token ABCDE is not supported and we don't have any price data, the cost basis value of 200 USDT acquired on March 18th is simply equal to the fee value. As a result, when the 200 USDT is sold at a later time, the capital gains will be calculated with a very low (or zero) cost basis which in this example equals $4.50. This is why we have a realized gain of $196.38 for USDT sold on March 20th. All the transactions and calculations can be seen here:

What is important to notice is that the 1000 ABCDE sold on March 18th does realize a capital loss of $150.41 since the proceeds value is zero due to missing price data for ABCDE. As a result, the gain for USDT sold on March 20th is canceled out by the loss for ABCDE sold on March 18th.

In other words: The net gain is NOT affected by the fact that price data for ABCDE is missing.

Let's understand this better by replacing ABCDE with Crypto.com (CRO) token that we do have price data for:

Example 1 - ABCDE

  • March 18: $150.41 loss

  • March 20: $196.38 gain
    = $45.97 net gain

Example 2 - CRO

  • March 18: $59.02 gain

  • March 20: $13.05 loss
    = $45.97 net gain

As we can see, the net gain in both examples is the same! This means that your net gains are not affected by the fact that you might see high capital gains for stablecoins like USDT and USDC.

Can I avoid realizing gains on stablecoins?

Coinpanda lets you manually change the value of any coin either bought or sold on the Transactions page. With the example above in mind, you can change the cost basis of the 200 USDT bought by selecting Edit cost basis (USDT) from the transactions menu. You can also change the proceeds value of 1,000 ABCDE sold by selecting Edit proceeds (ABCDE) so that the gains are calculated correctly for this transaction.

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