Good to know
- In Germany, if the cryptocurrency is held for at least 12 months, the profit is tax-free
- Invest only as much money in cryptocurrencies as you are willing to lose
What are Cryptocurrencies?
Cryptocurrencies are digital currencies based on cryptographic algorithms. Unlike traditional currencies issued by central banks, cryptocurrencies are managed in a decentralized manner by a network of users. That means beyond the control of financial institutions and governments. The most well-known cryptocurrency is Bitcoin, but there are many others including Ethereum, Litecoin, and Ripple. Cryptocurrencies are mainly used as a means of payment, but also as objects of speculation and as a way to transfer money anonymously.
Current Bitcoin price: USD
The price is refreshing every 30 seconds from coindesk.com web page.
Buying and Selling Cryptocurrencies
In order to buy or sell cryptocurrencies, you must first open an account with a cryptocurrency exchange. There are many exchanges that offer cryptocurrencies, such as Binance or Coinbase Exchange. After opening an account, you need to verify it and add a payment method to buy or sell cryptocurrencies. Then you can buy cryptocurrencies by buying them with fiat currencies (like US dollars or Euro) or with other cryptocurrencies (like Bitcoin). In order to sell cryptocurrencies, you need to convert them back into fiat currencies or other cryptocurrencies. It’s important to review the exchange’s fees and make sure you’re choosing the right exchange for your needs. It’s also important to ensure that you keep your cryptocurrencies safe by storing them in a hardware wallet.
Investing in cryptocurrencies is a risky investment.
For a list of the top cryptocurrency exchanges currently available, visit CoinMarketCap.
Cryptocurrency tax
In Germany, profits from trading in cryptocurrencies must be taxed. In general, profits from trading in cryptocurrencies are treated as income from capital assets and are accordingly taxed at the investor’s personal tax rate. However, there are exceptions for small wins. For example, if the winnings are less than 600€ a year, they are tax-free. Cryptocurrency taxation rules may change in the future as tax authorities learn more about cryptocurrency trading. It is therefore advisable to inform yourself regularly about the current rules.
An Article on Cryptocurrency Taxation will be ready soon.
