FIFO and LIFO are short hand names for inventory systems. In a FIFO system, inventory is sold on a first in, first out basis. This means old stock is sold first. Your grocery store (hopefully) does this, rotating stock so that the fresher milk is on the back of the shelf and gets sold after the older milk. In a LIFO system, the last in is the first out. The same holds true for cryptocurrency. Most traders use a FIFO inventory, selling their oldest crypto first. Although you can use either system, FIFO typically offers the most tax benefit. A FIFO system allows you to sell long-term assets before short-term ones, since long-term gains are taxed at a lower rate.