Every time you receive a bitcoin payment for a product or service, you report that as income using the US$ exchange rate at the time. It’s no different than accepting payment in barter or in a foreign currency. You report the revenue at the days US exchange rate.
Then, if you make payments from your cryptocurrency wallet for “ordinary and necessary business expenses“, you can deduct the business expenses at the day’s exchange rate in US$.
Whenever you sell the cryptocurrency or convert it to US dollars, you report a capital gain.
