Bitcoin Ordinals and Inscriptions: NFTs in Bitcoin and taxation
In January 2023, Casey Rodarmor launched the Ordinals protocol, which allows data to be enrolled in individual Bitcoin satoshis. This makes it the first NFT system native to the Bitcoin blockchain. In 2024-2025 the Ordinals market exploded, creating a new tax ecosystem to analyze.
What are Ordinals?
The Ordinals protocol assigns a unique number to each satoshi (the minimum unit of Bitcoin) based on the order in which it was mined. Inscriptions are built on this numbering system: arbitrary data (images, text, JSON, code) inscribed directly in the Bitcoin blockchain using the "witness" field of SegWit transactions.
An Ordinal inscribed with an image = native NFT in Bitcoin, no need for smart contracts.
The Ordinals market in 2024-2025
Collections such as Bitcoin Punks, Taproot Wizards, NodeMonkes or Pizza Ninjas have reached prices of tens of thousands of dollars. The primary market (minteo) and secondary market (purchase and sale) generate taxable events.
Ordinals Taxation: Mint an Enrollment
When registering (minting) an Ordinal:
- You pay Bitcoin to pay the fee to the miner.
- The fee paid in BTC = BTC transmission. If that BTC has an acquisition cost lower than the current price → capital gain.
- The resulting Inscription has an acquisition cost = the fee you paid + market price of the inscribed satoshi if it has special value.
The "special" satoshi: In Ordinals there are rare satoshis (like those in the first block of a halving). If you own one of these rare satoshis and register it, the acquisition cost is the price you paid for that satoshi when you acquired the BTC.
Buy and sell Ordinals on the secondary market
Markets like Magic Eden (with Bitcoin support), OKX Ordinals Market, or Gamma.io allow you to buy and sell Ordinals with BTC.
When purchasing an Ordinal with BTC:
- Transmission of the paid BTC → tax gain/loss on the BTC.
- Ordinal acquisition cost = price paid in BTC × EUR exchange rate at that time.
When selling an Ordinal:
- Sale price (in BTC) × EUR exchange rate at that time.
- Difference vs. Ordinal acquisition cost = capital gain/loss.
BRC-20: fungible tokens on Ordinals
The BRC-20 standard (not ERC-20) allows creating fungible tokens on Bitcoin using text Inscriptions in JSON format. Popular tokens: ORDI, SATS, MEME.
Taxation of BRC-20:
- Deploy a BRC-20: fee in BTC (transmission).
- Mint (free in many cases): the free tokens received are equity gains at the market price at the time of mint.
- Buy/sell BRC-20: same as any cryptocurrency → profit/loss based on savings.
Runes: the successor to BRC-20
Runes is the Bitcoin fungible token protocol launched with the 2024 halving, designed by Casey Rodarmor as a more efficient alternative to BRC-20.
Tributation of Runes:
- Identical to BRC-20. Free Mint → wealth gain. Purchase and sale → profit/loss.
The problem of UTXO and registration
In Bitcoin, addresses do not have "accounts" like in Ethereum. UTXOs (Unspent Transaction Outputs) are the basic units. An Ordinal exists "within" a specific UTXO.
Tax issue: If you accidentally spend the satoshi containing your Ordinal (an "enrolled" UTXO) in an ordinary transaction, you destroy the NFT. This could be interpreted as a transmission at price 0. Use Ordinals-specific wallets (Xverse, Unisat) to avoid this error.
Tools for Ordinals
- Ordiscan.com: Ordinals Explorer. View registrations of a wallet.
- Unisat.io: Wallet and marketplace for Ordinals and BRC-20.
- Gamma.io: Alternative Marketplace.
- Koinly: Limited support for Ordinals; may require manual registration.
Are Ordinals "NFTs" for the purposes of Model 721?
Form 721 declares "crypto assets" abroad. Ordinals/Inscriptions are cryptoactive, therefore, if the total value exceeds €50,000 → obligation to declare in 721.
Updated: April 2026 | Fiscal year: 2025