Although it may seem something extraterrestrial, the truth is that operating with cryptocurrencies is the order of the day. Proof of this are the dozens of applications and platforms related to the sale of virtual currencies that have become popular in recent years, such as Coinbase, which today reaches 5 million downloads only on Google Play .
Limiting ourselves merely to capital investment in cryptocurrencies, it is increasingly common to allocate a part of the savings to this type of operation. Along with Bitcoin, there is a whole string of options whose value has little or nothing to do with what today is the queen of operations with Blockchain, such as Ethereum, Litecoin or Stellar Lumens .
At this point, it is inevitable to ask questions about the profitability of this type of investment or the security when trading certain securities. Is it all the profitable that some internet gurus advertise? Is it really safe to buy and sell Bitcoins? We have tried to operate with Bitcoin for a whole week and we leave you with our experience below.
Buying Bitcoins: Almost as or as easy as paying for products with PayPal
The process to operate with cryptocurrencies, and more specifically with Bitcoins, is far from what was required a few years ago. During our tests we have made use of Coinbase , the most popular virtual currency wallet for mobile. The total investment has been 10 euros, which at the change in Bitcoin at the time of purchase amounts to 0.0010 BTC .
Registering with Coinbase
Once we have proceeded with the download of the application, the registration process is really simple. We will only have to indicate a valid email address, along with some personal information (name, surname, tax identification number ...) and one or more payment methods (PayPal, credit card, bank account etc.).
Since the platform is subject to current European legislation, we will have to attach two photographs of our identity card to verify our identity. The verification process can range from a few hours to a day or two, depending on the time and day.
After completing the registration process, we can now buy and sell Bitcoins or any other cryptocurrency that the application offers. It should be noted that the application has a promotion with which we will receive 10 euros in Bitcoin if we carry out the registration process through the link of a friend , acquaintance or relative, although in this case the investment has come directly from our pocket.
If we go to the main screen of the application, Coinbase will show us a list of the most popular cryptocurrencies, such as Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin or Stellar Lumens. Just below we can see a list with other cryptocurrencies of interest, such as Tether, EOS or Binance Coin. To see the complete list of virtual currencies we will have to access the Portfolio , where we can also see the different investments that we have made in each of the currencies with which the application is compatible.
Returning to the main screen of Coinbase, the platform has a series of options that allow us to automate the sale of assets . What concerns us on this occasion, however, is limited exclusively to the purchase of Bitcoins.
You can buy Bitcoins in one go or automate your purchase based on a capital.
To buy this or any other cryptocurrency, just click on the asset in question and select the Exchange option . Next, Coinbase will show us a list of options that allow us to sell an asset, buy it at market price or exchange it for another. If we choose to buy or exchange to other currencies, the commissions that the application currently has are the following:
- 1% for transferring from local currency to Bitcoin and from Bitcoin to local currency
- 1.49% for buying a cryptocurrency
- 0% for transferring assets to other virtual wallets
In our case, after having made the purchase of Bitcoins and subtracting the corresponding Coinbase commission, the value of Bitcoin that we obtain is 0.0010 BTC, which at the exchange rate in euros at the time of purchase amounts to 9.01 euros . That is, Coinbase has kept 99 cents of our initial investment of 10 euros, which is almost 10% of the total amount invested. We understand that this percentage is higher when the purchase of a cryptocurrency does not reach a minimum. In any case, we have not been able to find information about it .
If we are going to transfer Bitcoins to another virtual wallet or receive Bitcoins from another wallet, Coinbase will generate a QR code and a unique address of our wallet to operate with third parties completely free of charge.
If what we want is to send or receive Bitcoins to a third-party account, we can generate a link to our virtual wallet through the Wallet section by clicking on the Send or Receive options or on the respective icons if we have the mobile application.
It goes without saying that both the registration and purchase processes are completely secure. Coinbase and the rest of the platforms to operate with cryptocurrencies adhere to the FinCEN registry and the European regulations on the Protection and use of data , as well as the security measures adopted to safeguard the assets of virtual wallets. In the case of Coinbase, the application has an AES-256 encryption system and SSL encryption .
After a week of waiting the storm arrives
To know the behavior of Bitcoin in the stock market we have waited eight days after the initial investment of Bitcoin.
During the first week of waiting, the value of Bitcoin has decreased an average of 7.67 percentage points, going from 8,500 euros to 7,844. Our initial investment of 10 euros, which later became 9.01 euros after the application of the respective commissions, has reduced its value to 8.58 euros, which translates into a loss of 5% of the invested capital .
From this we must again subtract the commission applied by Coinbase to convert Bitcoins into euros, which would leave us with a figure below 7.60 euros . If we had invested 100 times more, the losses would multiply by 100.
Tax obligations: what do I do if I make money trading Bitcoin?
Given the recent popularization of cryptocurrencies, the first question that may come to mind after obtaining a certain return with the operation of this type of securities has to do with tax obligations. Do we have to declare earnings? And the losses?
During the last campaign of the Income Statement, the Treasury has made public the following statement in relation to operations with cryptocurrencies:
“According to the data available to the AEAT, you have carried out operations with cryptocurrencies. We remind you that the profits generated in said operations constitute income subject to personal income tax, with the qualification of capital gains, which must be included in box 389. "
Jesús Gascón, General Director of the AEAT, explained that the data has been obtained from the National Office for the Investigation of Fraud. It has also ensured that the focus will be placed on this type of operations , so ignoring the declaration of this type of usufruct is not an option if we want to comply with current legislation.
Regarding the taxation of cryptocurrencies, the State Agency treats the benefits obtained from them like any other gain that affects our personal assets. The sections that the Treasury establishes are the following:
- Profits from 0 to 6,000 euros : 19% retention
- Profits of 6,000 to 50,000 euros : 21% retention
- Profits of more than 50,000 euros : 23% retention
If we look at our investment and consider a percentage increase of 200%, the equation to apply the respective taxes to the profits obtained from the sale of cryptocurrencies is as follows:
- Profit = Transfer value - Acquisition value
Starting from the previous base, our equation leaves us with the following figures:
- 20 euros (final sale value) - 10 euros (initial purchase value) = 10 euros profit
Within this benefit we will have to apply the respective withholding for the equity variation. In our case, the profit value enters the first tranche established by the Treasury from 0 to 6,000 euros.
- 10 euros x 0.19 = 1.9 euros of retention
Therefore, the final benefit with the withholdings applied is 8.1 euros . We will have to apply the same equation if we obtain losses after the sale of cryptocurrencies. In any case, from Tuexperto.com we recommend resorting to a specialized agency in this type of transaction if we want to invest a significant part of our capital.
The bottom line: don't invest in Bitcoin (for now)
Bitcoin is today the strongest virtual currency in the entire cryptocurrency market. Although the current forecasts are not very promising, the truth is that a new rise is expected at the end of this year .
BTC value up to a week ago.
Is it worth investing in Bitcoin? At this time, the most sensible thing to do is opt for other cryptocurrencies . During this same year we have seen how the value of BTC fell to 3,000 euros. Unless we invest an amount equal to or very close to its historical minimum, from a personal point of view I cannot recommend more than opting for other cryptocurrencies.
And it is that despite the fact that Bitcoin managed to double its current value in the market, our gross profit if we decided to invest 3,000 euros would be 3,000 euros . Far from the almost 20 million we saw in the article where we talked about the profit we would have obtained at this very moment if we had invested 100 euros in 2010.
As for the rest of cryptocurrencies, most values are down precisely because of the decline in Bitcoin. At the time of writing, Stellar Lumens is the fastest growing cryptocurrency . Its current value is 0.069 euros, and the growth experienced during the last month has exceeded 25%. Its all-time high, however, has stagnated at 50 euro cents, so its profitability is focused on long-term investments .