FIFO (First-In, First-Out) assumes that when you dispose of part of a holding, you sell the earliest acquired units first. That determines which cost basis lots are matched to the disposal.
Some jurisdictions mandate a method (FIFO, average cost, share pooling, etc.); others allow a choice. Crypto tax software usually lets you select a method — but it must match what your tax authority expects.
Why it matters: method choice can change reported gains significantly on volatile assets.
Educational definition — not tax advice. Rules vary by country.
