You haven't been "taxed in the initial 5k investment", you will only be taxed on your gain.
Your exchange of half your original purchase of crypto currency is a "sale" for income tax purposes. The "proceeds" of the sale is is:
(# of new crypto coins received) x (spot price in US Dollars at the time of the transaction of the new crypto coins)
From that you subtract your basis in the coins given up, which is about $2,500 according to what you've posted.
You are taxed on the resulting gain only, which seems to have been right around $2,500, in your example.
When and if you sell your remaining "original" crypto coins, either exchange them for US Dollars or some other crypto coin, you'll go through the same exercise of determining your gain, (or loss), by deducting the remaining $2,500 basis in your original crypto coin from the proceeds of this second sale.
All in all when you get rid of all your original crypto coin you'll deduct that original $5k basis and only pay tax on any actual GAIN.
Tom Young
