[stakecounter]

Thanks - given your comment it sounds like option 1 mentioned above where gains are calculated based off of USD value even if the currencies are traded directly. But as another commenter mentioned, I don’t see how this can work because the trade doesn’t involve USD at all, and the exchange rate for USD/ETH may vary widely between exchanges. And for more niche cryptocurrencies, a USD value may not even exist because there are no trades between USD and that currency.

[newfoundglory]

> the trade doesn’t involve USD at all

Neither does buying pounds in euros, but you'll still calculate your taxes in USD.

[Spooky23]

This is where the magic of crypto money starts falling down. Normal money is legal tender, commodities are not.

[teawrecks]

At the end of the day, you're going to pay your taxes in USD. So yeah, the USD value does matter.