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Bitcoin holders are taking advantage of higher prices and year-end tax planning to give away millions of dollars in the cryptocurrency. In 2017 through November, givers donated $11 million in bitcoin to Fidelity Charitable, earmarking the cash for their donor-advised funds. Those are accounts that you can fund with highly appreciated assets, and use over time for making grants to charities. Since the beginning of December, charitable bitcoin holders have doubled that amount — and have now given $22 million of the cryptocurrency so far through 2017.

People are getting smarter about donating appreciated assets, and bitcoin is the epitome of appreciated assets this year. Matt Nash Fidelity Charitable

Fidelity doesn't hold cryptocurrency donations. Rather, it processes the gifts through Coinbase, a currency exchange company, and then deposits the cash after conversion into benefactors' donor-advised funds. "This is giving season, after all, starting in late November and running through Dec. 31," said Matt Nash, senior vice president of donor engagement at Fidelity Charitable. "People are getting smarter about donating appreciated assets, and bitcoin is the epitome of appreciated assets this year," he said. Here's why donating bitcoin is a clever tax play this year.

Spiking values

Bitcoin has experienced a meteoric rise in value over the last couple of weeks. One unit of the cryptocurrency is valued at more than $17,000 as of Dec. 15.

Bitcoin holders may be on the hook for steep capital gains taxes if they were to cash out of the cryptocurrency now, particularly if they acquired their holdings back in 2010 when one bitcoin was worth less than a dollar.

Give it away