All gains on cryptocurrencies are capital gains. However, not all losses are deductible. A taxpayer’s losses are not deductible on cryptocurrencies if the taxpayer’s activities are infrequent and do not rise to the level of investment activities. Instead, the taxpayer’s virtual currency transactions may be treated as “personal” transactions, a hobby or for recreational use. There are a variety of “personal use” transactions including, buying and selling for personal use, buying goods or services with cryptocurrency, and exchanging cryptocurrencies into other cryptocurrencies or a fiat currency.