Only 6.5% of crypto users report taxes to the IRS, research reveals that the crypto "tax-paying culture" is very weak.

About 12%-21% of adults in the United States have held cryptocurrencies, but only 6.5% of taxpayers report sales to the IRS—after three scholars studied hundreds of millions of tax filings from 2013 to 2021, they found that crypto bros aren’t just radically different in their trading patterns from traditional investors; they’re also quite unfamiliar with the very idea of “remembering to file taxes.”
(Background: Is it highly unlikely for Americans to buy Bitcoin in bulk? Arthur Hayes: the debt abyss + stereotypes become stumbling blocks)
(Additional background: 800 Sheetz convenience stores across the U.S. accept crypto payments: 50% discounts on purchases with BTC, ETH, USDC)

Table of Contents

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• Analyzing the full picture of tax filings from 2013-2021 through millions of records
• Menzer: These are investors with fundamentally different compliance characteristics
• 836 transactions, a loss of $636: CoinTracker’s 2025 tax-year snapshot
• After ETFs, the landscape has changed; but the structural gaps remain

How many people hold crypto in the United States? So many that the IRS can’t keep up. But the number of people who obediently put their profits into a tax return is, surprisingly, far smaller.

Bloomberg reporter Olga Kharif noted in the latest Crypto Newsletter that an academic paper published in March 2026 in Springer Nature’s accounting research journal revealed a shocking figure: other surveys estimate that about 12% to 21% of American adults had held cryptocurrencies before 2021; but the number of taxpayers actually reporting cryptocurrency sales to the IRS is only 6.5%.

In other words, the rough estimate is that more than half of the holders have never reported any transaction to the tax authorities.

Analyzing the full picture of tax filings from 2013-2021 through millions of records

The paper titled “Who reports cryptocurrency to the IRS?” was co-authored by three scholars: Tyler Menzer, an assistant professor of accounting at Neeley School of Business, Texas Christian University; Jeffrey Hoopes, a professor at Kenan-Flagler Business School, University of North Carolina; and Jaron Wilde, a professor of accounting at Tippie College of Business, University of Iowa.

Menzer obtained millions of de-identified IRS tax records through academic channels. The study period spans 2013 to 2021, with the main focus on sales reporting behavior for Bitcoin and Ether. Notably, this research period is earlier than the approval and listing of spot ETFs in early 2024—the emergence of ETFs has completely changed the investor composition in the crypto market, with institutional funds flooding in. The profile depicted in the study represents the era dominated by “grassroots retail investors.”

Menzer: These are investors with fundamentally different compliance characteristics

In an interview with Bloomberg, the paper’s author Menzer directly laid out a profile of these crypto investors:

“Cryptocurrency owners are more likely to own meme stocks than other investors. They are younger, they may be a little bit lower income. But the takeaway from our paper is this is a distinct group of taxpayers, of investors. They were trading differently, maybe had different compliance characteristics. A lot of people were probably not reporting their holdings to the IRS.」

(Crypto holders are more likely to own meme stocks than typical investors. They are younger, and their income may be a bit lower. But the core conclusion of our paper is: this is a group of taxpayers and investors that is completely different. Their trading patterns are different, and their compliance characteristics may also differ. Many people likely have never reported their holdings to the IRS.)

The study also observed that crypto traders tend to sell their holdings more frequently and appear to pay less attention to tax implications—this “lack of tax awareness in high-frequency trading” is another key feature that sets them apart from traditional stock investors.

836 transactions, a loss of $636: CoinTracker’s 2025 tax-year snapshot

CoinTracker, a crypto tax compliance software company, provided 2025 tax-year data that further fills in the details behind this picture. According to its data, crypto investors on average need to report as many as 836 transactions per year—just organizing those records alone is enough to make people hesitate.

Profitability shows a significant split: short-term traders (holding for less than one year) average a loss of $636; long-term holders (holding for more than one year) average a profit of $2,692. The frequent in-and-out trading by short-term traders not only involves higher rates, but also leads to worse actual returns—yet that apparently doesn’t scare off traders who are eager to trade quickly in and out.

After ETFs, the landscape has changed; but the structural gaps remain

At the end of the article, Kharif quoted a classic post-game line from former NFL coach Dennis Green—“they are who we thought they were” (“they are exactly the kind of people we thought they were”)—to describe how crypto bros apparently, as expected, have brought their stereotypes to life when it comes to paying taxes. The line came from an emotionally charged post-game statement in 2006, and in American sports culture it has long since become a widely known meme. Kharif uses it to mock the crypto community’s compliance culture, in a dry tone with a hint of dark humor. The IRS did not provide an immediate response to Bloomberg’s request for comment.

Crypto Watch: The timeframe of this study stops before ETF approval, before institutional money had entered on a large scale. It depicts an ecosystem dominated by retail investors. After 2024, the compliance infrastructure (such as making exchange 1099 forms mandatory, and the widespread adoption of tax software) and the structure of investors have both changed. However, the structural problem Kharif pointed out—namely that the IRS’s tracking ability still lags far behind the pace of market expansion—probably hasn’t disappeared as a result. The tension between the crypto industry’s “libertarian culture” and tax obligations has persisted from 2013 to today, and that 6.5% reporting rate is the most direct numerical answer.