Majority of Bitcoin holders use FIFO because it's the default. Their exchange or tax software picks it automatically and they never change it.

That's often the most expensive option they could have chosen.

FIFO (first in, first out) pairs your oldest coins with each sale. If you've been buying since 2020, those are your cheapest coins — lowest cost basis, highest taxable gain.

HIFO (highest in, first out) pairs your highest-cost lots with each sale first. You're selling your most expensive coins on paper, so your recognized gain is smaller. Same number of bitcoin sold. Smaller tax bill.

The math is the same for everyone. The result isn't. It depends on your purchase history, current price, and whether you're in short- or long-term territory.

The catch: you have to actually elect HIFO. It doesn't get selected for you. And you have to track specific lots — which means your records need to be precise enough to support it. Most people's aren't.

If you've been buying for 3+ years and you haven't looked at this, it's worth running the numbers before your next sale. The difference between FIFO and HIFO on a $50k sale can easily be $4,000–$8,000 in recognized gain depending on your purchase history.

It won't change your long-term BTC position. It just changes how much goes to taxes vs. how much stays in your stack.