If I buy something with cryptocurrency is that taxed?

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Probably, but it depends on the rules of your country/jurisdiction. If it is considered a taxable event in your country, then you would be paying tax on the capital gains (the amount that the asset appreciated while you held it).

For example let’s say you bought one bitcoin for $1,000 and then you bought a car with that bitcoin. At the time of the purchase, the bitcoin was worth $20,000. The $19,000 of capital gains are taxable.