
Cryptocurrency is considered property, not currency, for US tax purposes. Therefore, the taxation of cryptocurrency exchanges will be treated. The IRS specifically referred to Bitcoin as a type of convertible virtual currency that can be digitally traded. In addition, you can buy or exchange virtual convertible. For example, is Bitcoin a currency, like the US dollar? Or is it property, like a car or a stock certificate? With Notice 2014-21, the Internal Revenue. Service (IRS).