Gift tax exists to stop people from emptying their estates before death and escaping estate tax that way. It reaches any transfer where you give something and receive less than its value back — cash, property, an interest-free loan, a house sold to a child at a friendly price. The giver is responsible for the tax, not the person receiving, which reverses what most people expect.
In practice very few people ever pay it. An annual exclusion lets you give a set amount to each recipient every year with no filing and no consequence, to unlimited recipients. Above that, the excess is reported rather than paid — it counts against your lifetime exemption, reducing what passes tax-free at death. Both figures adjust over time.
Several categories sit outside the system entirely. Tuition and medical expenses paid directly to the institution or provider are excluded regardless of amount, gifts between spouses who are both US citizens are generally unlimited, and charitable gifts have their own treatment. The direct-payment requirement matters: writing the check to your grandchild rather than to the university changes the analysis.
Digital assets follow the same logic as anything else. Sending crypto to someone is a gift measured by its fair market value at the moment of transfer, and volatile assets make that timing consequential. If a transfer might exceed the annual exclusion, document the date and the value contemporaneously — reconstructing it later from a block explorer is unpleasant.