Finding your way on the crypto market

May 2, 2018

If you haven't heard about crypto-currencies, you must be living in another dimension! I have read so much about Bitcoin and Ethereum that it got me curious and wanting to give it a go. I strongly believe in diversifying your assets from having some money on a savings account to owning shares, crypto-currencies, properties and more. Leaving your money to stagnate at the bank seems like the worst idea a person could have when you're actually trying to prosper.  So today, I am going for crypto-currencies, a bit late but hey...There are still some cards to be played.

Crypto-currencies have been around for some years now but the number of investors was much less than it is today. The pioneers who invested in Bitcoin and Ethereum made a great move by putting their money in a niche market that had a lot of potential. They probably saw the breakthrough associated with the blockchain technology hidden behind the Bitcoin when nobody else would believe in it. A lot of people tend to see crypto-currencies as the new speculation tool, I kind of agree with them, but blockchain shouldn't be forgotten along the way. And now most of these pioneers are probably rich! 

 

Today we can still play our cards and make some money if we are smart. Starting can be tricky if you really are not familiar with everything crypto (like me!) because if in essence it is very similar to stock trading....There are still many differences: Which platform to use? How to buy currencies if not with EUR/USD? Exchange rate? What about Security? How to get your money back? I asked myself these questions and thanks to Google, I found answers rather fast but I did have my doubts about:

 

  • Finding a trustworthy platform;

  • Security issues;
     

In order to start, I had to make a bunch of research to find answers to my questions and to get started half decently! Here are some of my findings, feel free to correct me if I am wrong or suggest better ideas, I am still learning ;)
 

  1. One of the platforms that I would recommend to start with crypto-currencies is BitPanda. This platform is user-friendly, easy to figure out and secure with a bunch of authentication processes (SMS code, Google Authentication, ID verification, etc.). The down-side is the fees per transactions. They offer various methods of payment (SEPA, Credit card, etc.) so you will definitely find a way to buy currencies! Currently, 5 of them are available for purchase which is more than enough to start (Bitcoin, Ethereum, LItecoin, Dash, Bitcoincash & Ripple). 

  2. Depositing money in your wallet on a chosen platform. Once you have chosen a platform, created an account and validated it, it is time to deposit money. To do this, you need to verify your identity with a phone number, address and a webcam authentication via IDnow or VerifyU. This last step takes something like 10 minutes to be completed and you are good to go! On platforms like BitPanda, you need to be verified before being allowed to deposit money in your Wallet. Now just wire some or use a credit card (note that fees are associated with this last deposit method).

  3. Buying crypto-currencies to invest in small-ones. Platforms don't always sell the same currencies, some only have bitcoins, some sell up to 20 currencies, it really varies. But no worries, you can purchase currencies like Bitcoin or Ethereum and use them to invest in smaller ones such as Ripple or WaBi on other platforms. For example, BitPanda only offers 5 currencies (Bitcoin, Ethereum, Litecoin, Dash, Bitcoincash & Ripple) but this is already enough to start! 

  4. Getting started! Once you have some money in your Wallet, use it buy Bitcoins or Ethereums and send them to an encrypted deposit address on the platform selling the currencies you're eyeing! Binance seems like a good start in my opinion, Kraken is another one (Note that you need a verified account on that other platform as well). Once this is done, you can start waiting or trading! Make sure to research a currency and to understand the tech behind before investing though!

  5. Be smart: Don't buy in a hurry, watch the market and patterns for the right moment. Stay informed and read the news to make the best decisions when selling. Use websites like CoinMarketCap to assess the potential of a currency!

  6. Join a Forum or Discussion Group: when you are new and still figuring crypto-currencies out, it is good to be able to ask for advice to someone used to trading. That's why joining a group is smart! More people = more knowledge and wisdom.

  7. Profit: Whether you make small or bigger profit, you are learning and earning! Way to go and to grow!

  8. Taxes: Yes the Belgian government is cooking some taxes on crypto-currency trading, so when declaring incomes, crypto-currency profit could be declared as "Revenus Divers" and be taxes at 33% so don't spend all your earnings yet! So far it seems that 3 cases have been examined and subjected to taxes. It really depends whether the government considers your activity to be personal (bon père de famille) or trader-like (read more here). Also, make sure to keep a proof of all your tradings: money wiring, transactions, withdrawing in case the bank suspects you to launder money^^' It did happen in the past, so it is better to be safe than sorry!

  9. Vaults & Ledgers: Finally, you will hear a lot about Vaults and Ledgers...While platforms are somewhat safe for trading, if you are looking to keep your currencies on the long term, you might want to keep them offline on a Ledger, or two (for backup in case you loose the 1st one) or in a Vault like this one: Xapo. I am not at this step yet but who knows...One day maybe...

 

If you know more or want to share some wisdom, please go ahead! 

 

 

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