the essentials in brief

• There are many different trading venues on the Internet where investors can buy bitcoins
• The respective crypto exchanges and trading places for digital assets have advantages and disadvantages
• Recommended brokers with crypto trading: Etoro , justtrade.com , finanzen.net zero

Crypto enthusiasts like to refer to bitcoins as “digital gold”. The fact that there are similarities between gold and bitcoins cannot be denied.

In contrast to state currencies, both are finite – gold is a raw material with limited reserves, bitcoins are limited to 21 million pieces: the inventor of bitcoins, Satoshi Nakamoto, wanted to ensure their value stability. This, in turn, is particularly important in times of crisis.

At the beginning of the Corona crisis, however, Bitcoin did not seem to be able to live up to its reputation as a crisis-proof currency: the price collapsed massively and fell below 5,000 US dollars.

However, Bitcoin recovered relatively quickly and the curve has been steadily rising ever since. More than half a year later, Bitcoin is at over 15,000 US dollars and more and more investors are investing their money in the cryptocurrency leader.

Three ways to invest in Bitcoin

In the meantime, not only daring private individuals are buying coins, but also institutional investors have discovered digital currencies for themselves. Many of them put their money into the two most popular cryptocurrencies, Bitcoin and Ethereum. Taken together, their market capitalization corresponds to around 60 percent of all digital currencies. No wonder, then, that almost every trading place for cyber currencies has Bitcoin and Ethereum in their repertoire.

Even if the two can actually be bought on every crypto platform, the differences between the trading venues are enormous. Some offer real bitcoin, others offer ETPs from bitcoin on a securities exchange, and still others use bitcoin derivatives.

1. Real Bitcoins

Investors can buy real bitcoins on classic exchanges and marketplaces such as Binance . Exchanges sell the coins directly to the customer – the price depends on supply and demand. Marketplaces, on the other hand, are intermediaries, they only provide the platform for a transaction between buyer and seller. The price there also depends on the market, but the exact amount is determined by the seller.

If you buy real Bitcoins, you really own the digital coins. It is up to him whether he leaves it on the respective crypto platform or transfers the crypto currency to an external wallet, for example to use it as a means of payment in an online shop.

Tip: Depending on the crypto exchange , the current prices for a bitcoin differ. Websites like cryptowat.ch help to compare offers from different exchanges and to find the currently best possible price.

High demand from online brokers

Investors can also buy real Bitcoins from some online brokers. Young brokers such as Justtrade or Trade Republic have included some cryptocurrencies in their product range – including Bitcoin.

But there is a catch: the cryptocurrencies can be traded easily and cheaply there, but it is not possible to pay out Bitcoin to an external wallet. The private key, which grants exclusive access to the storage location of the cryptocoins, remains in the hands of an external custodian.

Bitcoin is only suitable for speculation with these brokers. This is usually sufficient for most investors, as the options for paying with bitcoins are currently still limited. But if you want to keep this option open, you have to look for another provider.

By the way, investors don’t have to buy a whole bitcoin – with a value of more than 50,000 US dollars, that should be difficult for many. If you want to invest less money, you can only buy fragments.

2. Bitcoin ETPs

Another so-called neo-broker, namely Scalable Capital , offers to trade Bitcoin in the form of ETPs. These securities are similar to stocks or ETFs. They are distributed via a stock exchange and can even be saved. They are therefore suitable for investors who regularly want to invest smaller amounts.

This form of investment also has an impact on the taxation of profits: Instead of deducting the bitcoins via income tax as usual, capital gains tax is due. This tax rate is usually lower and is automatically deducted from the broker.

Those who invest in the securities rarely have access to coins. Only a few issuers pay out the cryptocurrencies.

3. Bitcoin Derivatives

Bitcoin derivatives can be bought from different providers. For example, CFD broker Plus500 and online broker Etoro offer Bitcoin CFDs. But banks, such as the S-Broker of the Sparkasse or Comdirect, also offer warrants and futures on Bitcoin.

With derivatives, investors do not purchase the cryptocurrency itself, but merely place a bet on its performance – this is possible for both profits and losses.

If you also use leverage, you have the opportunity to multiply your chances of winning, depending on the size of the leverage – but the leverage affects the loss in the same way.

Caution: Derivatives such as CFDs are particularly suitable for advanced traders. A large part of the private CFD accounts slips into the lousy.

The right offer

The respective crypto platform therefore has a decisive influence on the way in which investors can trade Bitcoin. But there are other differences: Some providers carry more coins than others, charge different fees and are regulated differently. A comparison is worthwhile.

Exchanges such as Etoro , justtrade.com or the Stuttgart Digital Exchange (BSDEX) are considered serious .

When it comes to the sheer number of coins, Binance is a good place to go – over 150 cryptocurrencies can be traded here. In addition to Bitcoin and Ethereum, there is also the popular Dogecoin. The online broker Etoro has also included the popular coin with the dog meme in its range.

Exchanges such as Kraken or Coinbase also offer a wide range of cryptocurrencies, but charge higher fees than Binance. With the German providers it is usually the other way around. There are only a handful of digital coins here, but BSDEX, Bitcoin.de or Trade Republic are cheap. On the latter, investors can trade shares and ETFs in addition to four cryptocurrencies. The same applies to the online brokers Justtrade and Scalable Capital.

Nuri (formerly Bitwala) offers a special feature – the platform combines crypto trading and banking. A bank account and debit card are included here. Customers can convert Bitcoin and Ethereum directly into euros and thus withdraw them from Visa-supported ATMs.

In addition to their online version, many crypto platforms also offer an app for buying and selling Bitcoin. This has the advantage that active investors can react flexibly to price fluctuations. There are good apps for Bitcoin trading from Bison, Coinbase or Trade Republic. Here users will find a simple structure and an intuitive interface.

Step by step to your own Bitcoin

Registration

In most cases, trading on a crypto exchange requires verification of the registered user. Individual providers use different methods for this – some even do without proof of their own person up to a certain amount.

Procedures for identification are, for example, Post-Ident or Video-Ident. Other trading platforms expect uploading an ID document, proof of account or confirmation of residential address.

deposit

After the user has successfully registered and, if necessary, verified, he can transfer money to his exchange account. Traders should make sure that crypto exchanges cooperate with reputable partner banks: these preferably also provide deposit insurance.

The payment options are often limited – a standard bank transfer is almost always possible, but usually takes a few days. Money by means of payments via credit card, instant transfer or PayPal is available more quickly, but the fees are usually higher. A provider that allows a particularly large number of payment options is Etoro , for example .

Note: Incidentally, Etoro is also one of the few crypto platforms in Germany where investors can top up their clearing accounts with PayPal. In contrast, in the USA it is already possible to buy cryptocurrencies such as Bitcoin directly via Paypal. It is not yet known when this function will also be introduced in Germany.

Tip: It often makes sense to be active on several exchanges in order to benefit from individual advantages or favorable prices.

investment options

Once the money is in the account, you can start. Traders can either purchase the actual coin or speculate on its performance – for example through CFD trading or certificates.

Note: Those who trade derivatives such as CFDs often use leverage to increase the theoretical investment volume. This allows users to make high profits very quickly, but at the same time they can lose a lot of money in a very short time. Newcomers are therefore strongly discouraged from trading with leverage.

However, in order to make long-term and practical use of Bitcoin, it is advisable to actually buy Bitcoins. Don’t worry: Investors can also buy cryptocurrencies proportionately and do not always have to purchase an entire coin.

The right offer

The actual purchase is then rather unspectacular: the buyer decides on the amount of money he wants to invest and waits for the price that suits him. After completing the purchase, the coins are in his possession.

On marketplaces like bitcoin.de, the sum and number of coins is fixed. After the trader has selected the purchase option, the site blocks the offer for other interested parties and the buyer only has to transfer the money to have the coins credited to their wallet.

Fees vary depending on the stock exchange or marketplace . Most of the time this is a small percentage of the amount traded.

Transfer to a wallet

So that your own bitcoins are safely stowed away, it is advisable to create or purchase an external wallet. Wallets are available digitally, for example as an app, or also analogously as a hardware wallet (cold wallet) .

Tip: The online wallets of the providers are usually not recommended, since your own coins can be stolen in the event of a possible hacker attack.

The personal wallet contains a receiving address. With this and a private key, the transfer is secured and it is impossible for the amount to go to the wrong account.

The transfer from wallet to wallet takes a few minutes. In a marketplace transaction, the buyer and seller both pay a small fee for the transfer.

Sell ​​and tax bitcoins

If you want to sell your Bitcoins, you can also do so on a crypto exchange or a marketplace like the BSDEX . Selling is just as easy as buying.

But beware: Profits from the sale of bitcoins must be taxed for traders above a certain amount. Cryptocurrencies are subject to the same tax restrictions as other currencies. Such private sales transactions fall under the Income Tax Act.

There is an exemption limit for a profit of up to 600 euros – except for coins that the trader has owned for more than twelve months – from such a holding period cryptocurrencies are tax-free.

Calculate capital gain

In most cases, the FiFo method is used to calculate the capital gain: The bitcoins that were bought first are sold first. The difference in value then forms the profit or loss.

It is advisable to document all Bitcoin transactions precisely in order to be able to provide information to the tax office in case of doubt. In the tax return, such income falls under the item Other income (SO) – even if the amount is less than 600 euros: The tax office determines the tax exemption.

Frequently asked questions about buying bitcoins