How do I identify a specific unit of virtual currency

You can identify a specific unit of virtual currency by documenting the unit’s unique digital identifier, such as a private key, public key, and address. Alternatively, you can use records that show the transaction information for all units of a specific virtual currency held in a single account, wallet, or address. These records must include:

1. The date and time each unit was acquired.
2. Your basis and the fair market value of each unit at the time it was acquired.
3. The date and time each unit was sold, exchanged, or otherwise disposed of.
4. The fair market value of each unit when sold, exchanged, or disposed of, and the amount of money or the value of property received for each unit.

If you do not specifically identify the units, they are deemed to have been sold, exchanged, or otherwise disposed of on a first-in, first-out (FIFO) basis, starting with the earliest unit of the virtual currency you purchased or acquired.

Sources:
Rev. Rul. 2019-24
Notice 2014-21
Publication 544 (2023)
Everything We Know — and Don’t — About Taxing Cryptocurrency