Yes, zakat is due on cryptocurrency if you hold it for one lunar year and its value exceeds the minimum threshold (called nisab). You’ll owe 2.5% of your total crypto holdings once per year, whether you own Bitcoin, Ethereum, or other coins. The calculation is straightforward—treat your digital assets like currency and pay based on their market value on your zakat anniversary date.

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Key Takeaways

✅ Zakat applies to all cryptocurrencies – Bitcoin, Ethereum, altcoins, and tokens are all zakatable wealth if held for investment
✅ The threshold is ~$4,800–$5,100 USD – This is based on the current price of gold (85 grams). Check your local currency equivalent
✅ Rate is always 2.5% – Same as zakat on cash and gold
✅ Timing matters – You pay once per lunar year, starting from when your crypto holdings first exceeded the threshold
✅ You can pay in crypto or cash – Convert to your local currency or donate directly to charities that accept digital payments
✅ Track multiple wallets together – Add up all your crypto across exchanges and personal wallets for one total
✅ Staking rewards are zakatable too – Income from lending or staking counts as additional wealth that needs zakat

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What Does “Zakat on Crypto” Actually Mean?

Let me explain this simply.

Zakat is a form of financial responsibility—a purification of wealth. It’s an annual obligation for Muslims with a certain amount of money. Think of it as giving 2.5% of your eligible wealth to help those in need.

For centuries, Muslims calculated zakat on gold, silver, cash, and business inventory. Today, wealth looks different. Many of us hold digital assets—Bitcoin, Ethereum, and other cryptocurrencies.

The question: Do the same zakat rules apply to crypto?

The answer is yes, they do. Here’s why.

Cryptocurrency meets all the conditions for zakatable wealth:​

• It has real value that people buy and sell
• You can own and control it
• You can exchange it for other things
• It can be stored and transferred

Just like gold has value and requires zakat, so does crypto. Most Islamic finance scholars now agree that if you own crypto that exceeds the minimum wealth threshold and keep it for one full Islamic year, you must pay zakat on it.​

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Why This Matters (And It’s More Important Than You Think)

You might wonder: “Does my small Bitcoin holding really matter?”

It does. Here’s what I’ve seen happen in real life.

Many Muslims in Western countries hold cryptocurrency but don’t know they have a financial obligation tied to it. Some hold significant wealth in Bitcoin or Ethereum but haven’t calculated their zakat properly. This can leave people feeling confused and uncertain about their financial responsibility.

Here’s what matters:

1. You Might Already Owe Zakat

If you’ve held crypto for over a year and its value is above the minimum threshold (~$4,800–$5,100 USD), you likely have a zakat obligation right now. Not paying it when you’re supposed to creates a spiritual and financial debt.​

2. Crypto Wealth Grows Quickly

Cryptocurrency prices change rapidly. Someone who bought Bitcoin five years ago might have wealth worth tens of thousands of dollars without realizing how much zakat they owe. The earlier you understand the rules, the easier it is to plan.

3. Paying Zakat Brings Peace

Once you understand how to calculate and pay your zakat correctly, you can fulfill this responsibility confidently. No more guessing. No more worry.

4. Help People in Real Need

Zakat money goes to people struggling financially. In our Western communities, there are families facing rent issues, medical bills, and education costs. Your 2.5% contribution genuinely changes lives.​

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What Type of Crypto Counts as Zakatable?

Not all cryptocurrency is treated the same way. Let me break down the different types so you understand exactly what you need to calculate.

Type 1: Payment Coins (Bitcoin, Ethereum, Litecoin)

These are ALWAYS zakatable.

Bitcoin and similar payment-focused coins are treated like currency. This means zakat is due on 100% of your holdings, no matter whether you plan to trade them or hold them long-term.​​

Why? Because these coins function like digital money. You can use Bitcoin to buy real things in the real world. That makes them a form of wealth subject to zakat.​

Zakat Rate: 2.5% of total value

Example: You hold 0.5 Bitcoin worth $20,000. Your zakat = $20,000 × 2.5% = $500

Type 2: Altcoins & Lesser-Known Tokens (Bought to Trade)

These are zakatable IF you bought them to resell for profit.

If you actively trade altcoins—buying low and selling high—then zakat is due on the full market value of every coin you hold on your zakat anniversary date.​

The key question: Did you buy to trade, or did you buy to hold long-term? If you’re a trader, you pay zakat. If you hold indefinitely without trading intent, different rules apply (see Type 3 below).

Zakat Rate: 2.5% of total value at zakat due date

Example: You hold $5,000 worth of various altcoins that you actively trade. Your zakat = $5,000 × 2.5% = $125

Type 3: Utility Tokens (Governance, Platform Tokens)

These may NOT be zakatable if you’re NOT trading them.

If you own a utility token just to use within a blockchain platform (for voting, access, or services), and you never plan to sell it, then zakat might NOT apply.​

The rule: Zakat is due only if:

• You bought it to resell for profit, OR
• The underlying asset it represents is zakatable

If you just use the token for its intended purpose (voting, access, etc.) and never trade it, you’re likely safe.

Example: You hold governance tokens worth $2,000 that you use for voting power only. You never trade them. Zakat likely does NOT apply.

Type 4: Stablecoins (USDT, USDC)

These are ALWAYS zakatable.

Stablecoins are pegged to regular currency (like the US Dollar). They function like digital cash. Zakat is due on 100% of their value.​

Zakat Rate: 2.5%

Example: You hold $10,000 in USDC stablecoin. Your zakat = $10,000 × 2.5% = $250

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Step-by-Step: How to Calculate Your Crypto Zakat

Ready to do the math? Follow these steps exactly, and you’ll have your answer.

STEP 1: Find Your “Zakat Anniversary” (Your Starting Date)

Your zakat year starts from the moment your total wealth first exceeded the minimum threshold.

Here’s how to find it:

• Look back at when you first owned crypto worth more than the nisab (~$4,800–$5,100 USD)
• That date is your Zakat Anniversary
• Every year on this same date, you calculate and pay zakat

Pro Tip: If you don’t remember the exact date, pick a date that’s convenient (like January 1st or the start of Ramadan) and use that going forward consistently.

STEP 2: Check the Current “Nisab” (Minimum Threshold)

The nisab is the minimum wealth you must own before zakat becomes obligatory. It’s based on the price of gold.

Current Nisab (as of December 2025):

• Based on Gold: 85 grams of gold at current market price
• Approximately: $4,800–$5,100 USD (varies based on gold prices)
• In the UK: Around £8,200–£8,500
• In AUD: Around $11,000 AUD

To calculate the exact nisab in your currency:

Find today’s gold price per gram → Multiply by 85 → You get your nisab​

Example: Gold price = $60/gram × 85 grams = $5,100 nisab

STEP 3: List All Your Crypto Holdings

Write down every cryptocurrency you own across all your accounts:​

• Personal wallets
• Exchange accounts (Coinbase, Kraken, etc.)
• Staking accounts
• DeFi platforms

Create a simple list like this:

Cryptocurrency	Quantity	Market Price (on zakat date)	Total Value
Bitcoin	0.3	$43,000	$12,900
Ethereum	2	$2,500	$5,000
USDC	5,000	$1	$5,000
Altcoin	10,000	$0.50	$5,000
TOTAL			$27,900

STEP 4: Check If Your Total Exceeds Nisab

Look at your total crypto value on your zakat anniversary date.

• If it’s MORE than nisab: You owe zakat ✅
• If it’s LESS than nisab: You don’t owe zakat (yet)

In our example above: $27,900 > $5,100, so zakat IS due.

STEP 5: Subtract Any Debts

If you have short-term debts or financial obligations you need to pay soon, you can subtract them from your total.​

Debts that can be deducted:

• Personal loans you borrowed
• Credit card debt
• Bills due this month
• Money you owe friends

Debts that CANNOT be deducted:

• House mortgages
• Long-term loans spread over years
• Future obligations

In our example: If you have $2,000 in debts, subtract it:
$27,900 − $2,000 = $25,900 (new total)

STEP 6: Calculate 2.5%

Multiply your total by 0.025 (which is 2.5%)​

Formula: Total Crypto Value × 0.025 = Your Zakat Amount

In our example:
$25,900 × 0.025 = $647.50 (your zakat obligation)

STEP 7: Pay Your Zakat

You have two options:​

Option A: Convert to Cash & Donate

• Sell enough crypto to cover the zakat amount
• Donate to a trusted charity or zakat organization
• Keep a receipt for your records

Option B: Pay Directly in Crypto

• Some charities now accept Bitcoin, Ethereum, and stablecoins
• Send the crypto value to their wallet
• Make sure you use a reputable organization

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⚡ Pro Tip Box: The “Staking Income” Mistake

Here’s a common mistake I see people make.

The Problem:

You stake your Ethereum and earn 5% annual rewards. Or you lend your crypto on a DeFi platform and earn interest. Many people forget these rewards are additional income that needs zakat too.

The Solution:

When you calculate zakat, include:

• Your original crypto holdings
• PLUS any rewards or income earned from staking/lending

If you earned $1,000 in staking rewards over the year, add $1,000 to your total before calculating 2.5%.​

Why it matters: Forgetting staking income means you’re not paying full zakat. It’s an easy oversight, but it matters.

Read more: 5 Key Islamic Rulings on Buying Fake Luxury Brands (Halal or Haram?)

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How to Handle Multiple Cryptocurrencies & Wallets

Many people ask: “Do I calculate zakat on each coin separately, or together?”

Answer: ALWAYS calculate together.

Add up the value of EVERY cryptocurrency and token you own, then pay 2.5% of the combined total.​

Example: A Complete Multi-Wallet Scenario

Let’s say you own crypto in three different places:

Wallet A (Personal Hardware Wallet):

• 0.25 BTC = $10,750
• 5 ETH = $12,500
• Subtotal: $23,250

Wallet B (Exchange Account):

• 50,000 USDC = $50,000
• 8,000 of Altcoin = $4,000
• Subtotal: $54,000

Wallet C (Staking Platform):

• 10 ETH (staked) = $25,000
• Staking rewards earned = $1,500
• Subtotal: $26,500

Total Across All Wallets: $103,750

If your total exceeds nisab (it does here), your zakat calculation is:

$103,750 × 0.025 = $2,593.75 (total zakat due)

You pay this amount once per lunar year from ANY of your wallets—whichever is most convenient.​

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Different Scenarios & Real-Life Examples

Let me walk you through common situations so you know exactly how your circumstances apply.

Scenario 1: You Just Started Crypto (Less Than 1 Year)

Your situation: You bought $6,000 worth of Bitcoin three months ago.

Do you owe zakat? No, not yet. Zakat only becomes due after you’ve held the wealth for a full Islamic lunar year (354 days).​

What happens next: Mark the one-year anniversary in your calendar. On that date, if your Bitcoin is still worth more than the nisab, you then owe zakat.

Scenario 2: You Hold Multiple Coins, Some Zakatable, Some Not

Your situation:

• Bitcoin: $15,000 (zakatable—it’s a payment coin)
• Governance tokens: $8,000 (held for voting only, NOT to trade)
• USDC stablecoin: $6,000 (zakatable—it’s like digital cash)
• Total: $29,000

How much zakat?

Add only the zakatable coins:
$15,000 (Bitcoin) + $6,000 (USDC) = $21,000

$21,000 × 0.025 = $525

(The governance tokens don’t count because you don’t trade them)

Scenario 3: You’re a Crypto Trader

Your situation: You actively buy and sell altcoins for profit. Your holdings on your zakat date include:

• Ethereum: $8,000 (held long-term)
• Various trading altcoins: $12,000

How much zakat?

Because you trade, ALL your holdings are zakatable:
$8,000 + $12,000 = $20,000

$20,000 × 0.025 = $500

Scenario 4: Your Crypto Dropped Below Nisab

Your situation: Last year you had $6,500 in crypto. This year, due to market downturn, it’s now worth only $3,000.

Do you owe zakat? No. Your holdings fell below the minimum threshold. You don’t owe zakat this year.​

But going forward: If your holdings rise above the nisab again and stay above for a full year, you’d start a new zakat cycle from that point.

Scenario 5: You Earned Staking Rewards

Your situation:

• Original Ethereum holding: $20,000
• Staking rewards earned over the year: $2,000
• Total: $22,000

How much zakat?

Include the staking rewards as additional zakatable wealth:​

$22,000 × 0.025 = $550

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How to Actually Pay Your Zakat (3 Methods)

Now you know how much you owe. Here’s how to actually pay it.

Method 1: Convert to Cash & Use a Charity

Step-by-step:

1. Sell your crypto – Convert enough to cover your zakat amount plus any trading fees (usually 1–2%)
2. Transfer to your bank – Move the cash to your checking account
3. Find a trusted charity – Search for a zakat organization in your area or online
4. Donate the amount – Give your calculated zakat amount
5. Keep a receipt – For your records and peace of mind

Best for: People who want simplicity and peace of mind​

Cost: 1–3% in conversion fees

Method 2: Pay Crypto Directly to Accepting Charities

Several organizations now accept crypto directly. Examples include:​

• NZF (UK) – Accepts Bitcoin and Ethereum
• Islamic Relief Worldwide – Accepts multiple cryptocurrencies
• HADI (USA) – Crypto-enabled zakat donations
• Blossom Finance – Specializes in crypto zakat

Step-by-step:

1. Choose a charity that accepts your cryptocurrency
2. Get their wallet address – Ask them directly; never assume
3. Send the correct amount – Use their zakat calculator to confirm
4. Keep transaction records – Save the blockchain transaction ID
5. Request a receipt – For your records

Best for: Tech-savvy donors who want to avoid conversion fees​

Cost: Usually 0–2% network fees (minimal)

Method 3: Use an Automated Zakat Platform

New platforms like Sharlife and Sahal Wallet now simplify crypto zakat:​

1. Download the app (e.g., Sahal Wallet on Android)
2. Input your crypto holdings
3. Calculate your zakat automatically
4. Donate directly through the platform
5. Receive a receipt instantly

Best for: People who want a streamlined, app-based experience​

Cost: Optional platform fees; full amount goes to recipients

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Expert Tips & Best Practices

I’ve seen thousands of Muslims navigate this, and here are the patterns that work.

Tip 1: Track Your Zakat Date Clearly

Pick one specific date each year to calculate zakat—and stick with it.

Why? Cryptocurrency prices change constantly. If you pick a random date, your calculation will be inconsistent. Pick Ramadan, January 1st, or your birthday—anything consistent.​

Action: Set a phone reminder for your zakat date every year.

Tip 2: Use Reliable Price Sources

When calculating your zakat, use prices from established sources:

• CoinMarketCap – Comprehensive crypto prices
• CoinGecko – Alternative to CoinMarketCap
• Your exchange – Coinbase, Kraken, or your main trading platform
• Live gold prices – For calculating the nisab

Why it matters: Using inflated or outdated prices could lead to paying too much OR too little zakat.

Tip 3: Document Everything

Create a simple spreadsheet for each year:

Date	Holdings	Price/Unit	Total Value	Nisab	Zakat Due	Amount Paid	Charity
Dec 19, 2024	[list]	[prices]	$X	$5,100	$Y	$Y	[org]

Why? You have a clear record. You know what you calculated. You can answer questions later.

Tip 4: Account for Market Volatility

Crypto prices swing wildly. Bitcoin might be $40,000 on your zakat date but $35,000 a week later.

Solution: Calculate your zakat on your chosen anniversary date and pay immediately. Don’t wait, hoping prices will change in your favor.

The principle: Use the price on your actual zakat anniversary, not the best/worst price of the year.

Tip 5: Include ALL Wallets

Many people forget holdings on secondary exchanges or old wallets.

Action: Before calculating, make a checklist:

• ✓ Main exchange
• ✓ Secondary exchanges
• ✓ Hardware wallets
• ✓ Staking platforms
• ✓ DeFi lending accounts

Missing even one wallet means you calculated zakat wrong.

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Common Mistakes to Avoid

Here are the errors I see repeatedly. Learn from others’ mistakes.

Mistake 1: Forgetting the One-Year Rule

The error: Assuming zakat is due immediately after buying crypto.

Reality: Zakat only becomes due after holding the wealth for a full Islamic lunar year (354 days). If you bought Bitcoin last month, you don’t owe zakat yet.

The fix: Mark your one-year anniversary carefully.

Mistake 2: Using Cost Price Instead of Market Price

The error: “I bought Bitcoin at $30,000. Now it’s $43,000. Can I use $30,000 for my calculation?”

Reality: Always use the current market price on your zakat date, not what you paid. If it rose, your zakat is higher. If it fell, your zakat is lower.

The fix: Check the live price on your anniversary date.

Mistake 3: Only Counting “Main” Coins

The error: Calculating zakat only on Bitcoin and ignoring small altcoin holdings.

Reality: You must add up EVERY cryptocurrency, regardless of size.

The fix: Before calculating, list every single coin across all wallets.

Mistake 4: Ignoring Staking Rewards

The error: You stake Ethereum, earn $2,000 in rewards, but don’t include this in your zakat calculation.

Reality: Staking rewards are income. They’re zakatable.

The fix: When you calculate zakat, include original holdings + all rewards earned.

Mistake 5: Paying Late

The error: Your zakat is due on June 15, but you pay on August 15 because you were busy.

Reality: Zakat should be paid as soon as it becomes due. Unnecessary delays are discouraged.

The fix: Set your zakat date to a time when you know you can pay (like Ramadan, when giving is top-of-mind).

Mistake 6: Paying to Untrustworthy Organizations

The error: Sending your zakat to a random organization with a nice website.

Reality: Not all organizations are legitimate. Some misuse funds. Research before donating.

The fix: Use well-known, established organizations (Islamic Relief, HADI, NZF, etc.).

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FAQ Section: Your Questions Answered

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Final Thoughts: Make Your Crypto Count

Here’s the bottom line.

Cryptocurrency is wealth. Real, valuable wealth. And just like any wealth, it comes with responsibility—including zakat.

You now understand:

✅ What’s zakatable – Payment coins (Bitcoin, Ethereum) always are. Tokens depend on intent and type.

✅ When it’s due – After one full Islamic year, if your holdings exceed the nisab (~$5,100 USD).

✅ How much you owe – Exactly 2.5% of your holdings on your zakat anniversary.

✅ How to calculate it – List all crypto, check the price, multiply by 0.025.

✅ How to pay it – Convert to cash, pay to a charity. Or donate crypto directly. Or use a zakat platform.

✅ Common mistakes to avoid – Don’t use cost price. Don’t ignore small holdings. Don’t forget staking rewards. Don’t delay payment.

Your Next Steps:

1. Pick your zakat anniversary date – Choose a date that’s easy to remember (January 1st, start of Ramadan, your birthday—anything consistent).

2. List all your crypto holdings – Check every exchange, wallet, and staking account you use.

3. Check the current nisab – Calculate 85 grams of gold at today’s market price.

4. Calculate your zakat – Use the formula: (Total Holdings) × 0.025

5. Choose a payment method – Charity, direct crypto transfer, or a zakat platform.

6. Pay immediately – Don’t delay. Mark it done in your records.

7. Set a reminder for next year – Make zakat a yearly habit.

Fulfilling your zakat obligation brings peace. You know you’re meeting your responsibility. You know your wealth is helping real people. And you know you’re doing it correctly.

That’s what matters.

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Conclusion

Cryptocurrency zakat might seem complex at first. But once you understand the basic principle—**2.5% annually on wealth above the minimum threshold—it becomes straightforward.

Whether you hold Bitcoin worth thousands or a few altcoins, the process is the same. Calculate the total value. Pay 2.5%. Sleep well knowing you’ve honored your responsibility.