Our Top 10 virtual currencies in circulation as well as the price of the main cryptocurrencies of the day. Operation, uses and recommendations, taxation, find out everything you need to know before investing in digital currencies such as Bitcoin, Ethereum, Dogecoin,Cryptocurrency, Binance Coin, Ripple… which no longer have anything virtual.”
Summary
- Crypto currency and virtual currency: what are they?
- How is cryptocurrency made?
- Bitcoin, Ethereum: the main cryptocurrencies
- Ripple, Binance Coin, Dogecoin: medium and small crypto currencies
- Price of the main cryptocurrencies of the day
- Crypto currency: an anti-crisis safe haven?
- Ranking of virtual currencies according to their 2021 stock market valuation
- What is cryptocurrency used for?
- What makes the value of a cryptocurrency?
- How to invest in cryptocurrency?
- Crypto currency taxation 2021: how to calculate the capital gain and declare the gains in virtual currency
- 6 tips for investing in cryptocurrency
CRYPTO CURRENCY AND VIRTUAL CURRENCY: WHAT ARE THEY?
Definition of a cryptocurrency
By crypto currency is meant both a cryptographic currency and a peer-to-peer payment system. These digital currencies are therefore virtual currencies in the sense that they are characterized by an absence of physical support: neither coins nor banknotes, and payments by check or bank card are not possible either. “
These are alternative currencies that are not legal tender in any country in the world. Their value is not indexed to the price of gold or to that of conventional currencies, nor are they regulated by a central body or financial institutions.
There are no central banks at their head. And yet, security and transparency are their main assets! Indeed, cryptography secures transactions which are all verified and recorded in a public domain, ensuring both confidentiality and authenticity thanks to Blockchain technology.”
Blockchain: the basic technology of cryptocurrency
Cryptocurrencies are all based on the same principle: the Blockchain . Cryptocurrencies are a series of numbers stored on a computer in the form of chains of blocks.
The principle is actually quite simple and particularly well explained in the article published in Les Échos Bitcoin and crypto currencies, new digital coins: “Take a database. Authorize anyone to make changes to this database, on the sole condition of declaring themselves a “member”.
Set up a very long and complex control procedure which must be carried out each time a certain number (“block”) of changes is requested. This procedure is carried out not by a single controller, but by all the voluntary “members”. Once validated, the “block” of changes is dated and added to the others in the registry.
Finally, allow everyone to read the registry, and you have a blockchain database ”. Thus, it is up to the network (all the peers) to validate and confirm each transaction.
This technology and this system are the basis of the vast majority of cryptocurrencies, but Blockchain applications do not stop there. Indeed, it could disrupt the entire financial sector but also certain sectors such as the legal or administrative sector by eliminating the need for trusted third parties.
No need for a notarial deed or civil status register or even cadastre with this distributed register technology which helps to make data more secure and transparent. Blockchain technology is after all a technology whose database cannot be changed without meeting certain conditions.
HOW IS CRYPTOCURRENCY MADE?
People who make cryptocurrency are called miners. It is also said that they mine a cryptocurrency. Minors are an integral part of the process. Without them, the Blockchain would be frozen. A miner in fact confirms the transactions that take place on the Blockchain.
For example, imagine that Peter gives 3 Bitcoins to Paul. The transaction will be immediately broadcast on the network, in peer-to-peer, made up of computers called nodes.
However, it is only after a certain period of time that the transaction will be confirmed by the computers belonging to the networks using the algorithms specific to said Blockchain. Once committed, the transaction now forms a new data block for the ledger. It is added to others in the existing Blockchain, permanently and immutable.
Behind these network computers, miners validate transactions. To confirm a transaction, a miner must find the product of a cryptographic function that connects the new block to its predecessor.
This is called proof of work. In exchange for their services (and the computing power mobilized for this purpose), they obtain a reward which takes the form of tokens or tokens.
How to mine a cryptocurrency?
To undermine a cryptocurrency, it is usually sufficient to install software on your computer using the processor or the graphics card, or even both, in order to be able to solve the cryptographic problem requiring a relatively large calculation power, which will allow you to touch new units of the cryptocurrency in question.
Be careful, however, the main cryptocurrencies have become too difficult for individuals to mine. The mining of many of them has become largely professional and takes place in part on Chinese farms, buildings of several thousand m2 where tens of thousands of servers are running day and night to mine cryptocurrencies (Bitcoin, Litecoin , etc.).
Faced with this competition, cloud mining solutions have been developed. No investment in specific hardware is required.
All you have to do is get in touch with a company that has invested in the necessary equipment and “hire” your computing power. But beware, there are many scams!
Which cryptocurrency to mine?
Obviously, individuals are keen to mine the most profitable virtual currencies like Bitcoin, but also Dash, Ethereum, Monero, Litecoin, etc.
However, it is very difficult today to make money by mining a cryptocurrency. It is often much more interesting to invest in virtual currency in order to hope to make profits.
Miner / developer: who makes the cryptocurrency?
The role of the cryptocurrency miner is therefore to validate the transactions carried out. He is thus paid in tokens of the cryptocurrency for which he has confirmed a new block.
The role of the developer is very different. A cryptocurrency developer will develop the computer protocol at the base of the cryptocurrency which defines in particular the number of tokens in circulation, their speed of circulation, their storage power, etc. He is somewhat the architect of the network.
BITCOIN, ETHEREUM: THE MAIN CRYPTOCURRENCIES
How many cryptocurrencies are there?
This often asked question sounds simple but in reality it is very difficult to know the exact number of virtual currencies. No site lists them all.
The Ministry of the Economy and Finance counted more than 2,871 in 2019, without having updated since. Today there are over 5,400 crypto currencies listed on coinmarketcap. But that’s not the most interesting thing after all.
It should be noted that there are very many crypto-currencies but that only a few dozen can be qualified as popular cryptocurrencies. We often tend to rank promising cryptocurrencies based on their market capitalization, and rightly so.
The crypto currency Bitcoin, created in 2008 by Satoshi Nakamoto (without knowing who he is, if it is a man or a woman, or even a single person or several) is the first of cryptocurrencies.
He is somewhat the digital gold standard of the cryptocurrency sector, the benchmark in the field. The main crypto currency experienced a “fork” in August 2017.
A disagreement in the Bitcoin community over the speed of transactions gave rise to the birth of a new currency: Bitcoin Cash, which immediately rose to third position in the Top 10 cryptocurrencies and has held its own since then. around the Top 10 virtual currencies.
Remember that the price of Bitcoin is only partially correlated with the global economic situation and rather obeys a momentum effect and that most other virtual currencies are correlated with the first of the crypto currencies.
But this is less and less true and challengers manage to make remarkable breakthroughs, especially Ethereum.
The other benchmark crypto currency is indeed Ethereumwhich also experienced a fork in the summer of 2016. Ethereum, more complete than Bitcoin, relies on all Blockchain applications since it can not only process transactions but also contracts and complex programs.
Indeed, technically more successful and more efficient than Bitcoin, Ethereum is both a decentralized exchange protocol that allows users to set up smart contracts as well as a cryptocurrency based on the Ethereum network, more commonly known as Ether.
The strengths of this crypto network have participated in the spectacular rise recorded by Ethereum since 2020. The second active crypto could well see itself on the first step of the podium.
Bitcoin and Ether, together represent nearly 75% of the total market capitalization of cryptocurrencies.
RIPPLE, BINANCE COIN, DOGECOIN: MEDIUM AND SMALL CRYPTO CURRENCIES
But there are many other virtual currencies. We can notably mention in medium-sized crypto currencies, which represent between 0.8% and 2% of the total capitalization of crypto currencies, the Ripple for example, which is not only a cryptocurrency (XRP) but also a transfer system operating independently. of the XRP token.
It is above all a digital payment protocol intended to facilitate interbank payments. Binance Coin, Dogecoin, Litecoin , Cardano , NEM, Monero, Stellar, or Iota are also cryptocurrencies that are regularly part of the 10 most important crypto-currencies. Small crypto currencies, which represent less than 0.8% of the total capitalization of crypto assets, still together represent 14% of the total crypto market.
Since the creation of Bitcoin by Satoshi Nakamoto, approximately 5,500 cryptocurrencies have emerged. It should be noted that crypto currencies are numerous, that new ones can emerge and challenge the heavyweights of the sector, but also that disagreements within a community can lead to a “fork” (fork in French), that is to say a split within the community and the creation of a new currency based on the technology of the old but with modifications.
PRICE OF THE MAIN CRYPTOCURRENCIES OF THE DAY
CRYPTO CURRENCY: AN ANTI-CRISIS SAFE HAVEN?
If the coronavirus crisis has also impacted the price of crypto-currencies which have experienced a massive decline since the confinement of populations in the hope of stemming the Covid-19 epidemic, they largely caught up at the end of year 2020 and, overall, continued their bullish rally in 2021, until the crypto crash of May 2021 from which they are already recovering.
In this troubled context, cryptocurrencies have finally succeeded in establishing themselves as a safe haven. As Nathalie Janson, Economist and teacher-researcher at NEOMA Business School underlined at the beginning of December 2020: “radical economic uncertainty, negative rates, weak dollar” are all factors that contribute to the rise in the price of crypto currencies. ” These last months,
It is not uncommon for one to compare crypto currencies to gold , considering that it is, in both cases, a safe haven.
Jerome Powell, the chairman of the US Federal Reserve, even recently said that bitcoin is “essentially a substitute for gold rather than the dollar.” Only it lacks the historical status of a store of value. But their recent creations can allow us to consider Bitcoin and other crypto currencies as the digital gold of young generations who do not maintain the same relationship as the previous ones with the precious yellow metal.
RANKING OF VIRTUAL CURRENCIES ACCORDING TO THEIR 2021 STOCK MARKET VALUATION
Coinmarketcap.com performs a ranking of crypto-currencies according to their market valuation.
You may be wondering which cryptocurrency to buy or looking for information on which cryptocurrency to invest in or which cryptocurrency to trade. Investors often favor cryptocurrencies with a large market capitalization and relatively high prices, which reflects a certain confidence in the currency and a relative strength of the token.
Discover the ranking of the 10 most important virtual currencies taking into account their market capitalization, that is to say the total value of all tokens in circulation (price of a token X number in circulation).
1. Bitcoin (BTC)
Creation date: 2009
Market capitalization as of June 17, 2021: $ 734.472 billion
Price variation over 1 year (USD): + 317% approximately
2. Ethereum (ETH)
Creation date: 2015
Market capitalization as of June 17, 2021: $ 283.436 billion
Price variation over 1 year (USD): approximately 950%
3. Tether (USDT)
Creation date: 2015
Market capitalization as of June 17, 2021: $ 62.557 billion
Price variation over 1 year (USD): – 0.1% approximately
4. Binance Coin (BNB)
Date of creation: 2017
Market capitalization as of June 17, 2021: $ 55.121 billion
Price variation over 1 year (USD): approximately 2,145%
5. Cardano (ADA)
Date of creation: 2017
Market capitalization as of June 17, 2021: $ 48.776 billion
Price variation over 1 year (USD): around 1,760%
6. Doge Coin (DOGE)
Creation date: 2013
Market capitalization as of June 17, 2021: $ 40.469 billion
Price variation over 1 year (USD): approximately 12,485%
7. Ripple (XRP)
Creation date: 2015
Market capitalization as of June 17, 2021: $ 39.598 billion
Price variation over 1 year (USD): approximately 336%
8. USD Coin (USDC)
Date of creation: 2018
Market capitalization as of June 17, 2021: $ 23.923 billion
Price variation over 1 year (USD): – approximately 0.2%
9. Polkadot (DOT)
Date of creation: 2020
Market capitalization June 17, 2021: $ 22.601 billion
Price variation since its creation in August 2020 (USD): approximately 759%
10. Uniswap (UNI)
Date of creation: 2020
Market capitalization June 17, 2021: $ 13.036 billion
Price variation since its creation in September 2020 (USD): around 649%
WHAT IS CRYPTOCURRENCY USED FOR?
Virtual currency as a means of payment for the purchase of goods and services
What are the reasons for using cryptocurrency?
Like any currency, cryptocurrencies allow the purchase of goods and services. Not being under the influence of a central authority and escaping any regulation, they have long been the preserve of illegal transactions (ransomware, drug trafficking, etc.) but they tend to get rid of their bad reputation by becoming democratizing and attracting a wider audience. Cryptocurrencies are increasingly used today for legal transactions.
Virtual currencies, like Bitcoin, are used to buy many common consumer goods. It is for example possible to buy with Bitcoins, computer equipment of course, but also foodstuffs, jewelry, decorative objects, cultural products, etc. Overstock, a general merchant site accepts payment in Bitcoins, just like Shopify.
Paying for everyday goods with other cryptocurrencies is more difficult, but not impossible. The Ether, for example, could be used to buy works of art exhibited by young artists at La Compagnie (Paris X) in the spring of 2017. The virtual currency that wants to compete with Bitcoin has thus done, on this occasion, its entry into the real world.
At the end of 2020, Paypal said in a statementits intention to “join the cryptocurrency market […] by allowing customers to buy, sell and hold bitcoin and other digital assets, using the company’s online wallet accounts”. This announcement allows to consider a certain and rapid democratization of virtual currencies that will be offered by this giant of online payment.
Despite everything, it is more difficult today to carry out a transaction of everyday life in cryptocurrency than with the currency that is current in the country where you live. Ditto for digital payments.
However, cryptocurrencies could ultimately lower the cost of a digital transaction. And the financial and banking sector is watching these advances very closely. In the future, electronic payment based on cryptographic evidence may be the norm. Enough to embarrass the banks by forcing them to completely review the transaction model!
Cryptocurrency as a financial asset for investing
Cryptocurrencies must find their balance between means of payment and financial asset. Because it is indeed a good on which investors have positioned themselves en masse in recent years. For many people who have flocked to these new kind of financial assets, cryptocurrencies are first and foremost a potentially profitable investment.
However, are virtual currencies an investment like any other? What is certain is that digital alternative currencies can constitute a new kind of investment, while participating in the new digital economy.
It is common to include crypto-currencies in the category of miscellaneous goods and other atypical investments. This typology is relevant in the sense that it calls for prudence and to invest only a very small part of its capital in such assets.
Crypto currency as a means of making capital gains
Bitcoin was around $ 20,000 in December 2017 after a record year when the famous crypto currency saw its price multiplied by 15 in dollars.
And Bitcoin has been talking about it again for several months with a spectacular rise that began at the end of 2020 and which continued at the start of 2021 with a high of more than $ 60,000 on March 13, 2021 (its value was multiplied by 10 over the last 12 months), before experiencing a resounding crash on May 19, 2021 and losing 20% of its value.
It was also a crash crypto because it involved a large number of tokens, which often from the same day or the few days that followed found upward trends. Still, this severe correction reminded investors that the meteoric increases in the price of crypto assets are accompanied by significant volatility! Nevertheless, the increase in the volume of exchanges and the massive increase in the market capitalization of virtual currencies clearly indicates the interest of investors in these new financial assets.
Investors remain attracted to these virtual currencies, capable of posting impressive performances that are matched only by theirvolatility .
Keep in mind, however, that buying crypto currencies more or less amounts to betting on innovative technology. If the digital currency you have invested in becomes dominant (they all try with varying degrees of success to dethrone Bitcoin), you will have made a good deal.
Crypto staking to earn regular income
Some crypto currencies also make it possible to generate income by simply holding them. This is for example the case of Decred (DCR), Cosmos (ATOM), Tezos (XTZ) or even Algorandi (ALGO). This is called staking, a term derived from “proof of stake”, ie proof of possession or proof of stake. In exchange for holding locked tokens, used to validate transactions, the individual investor who holds them receives rewards (most often interest, or even token compensation).
The interest for the network is twofold: on the one hand, this practice allows better security of the exchange network and a reduction in Blockchain energy consumption; on the other hand, holding the token in question causes a scarcity of supply and a rise in the price.
Stablecoin: cryptocurrency as an investment medium in a given underlying
Finally, virtual currency can also be used to invest in financial assets that have nothing to do with virtual currency. Thus, stable coins are crypto currencies backed by an underlying whose variation they replicate. These include Tether (USDT), indexed to the dollar, just like USD Coin or Dai. As their name suggests, the Tether Gold and Pax Gold crypto-currencies are indexed to gold.
Their low volatility reduces the risk of a cryptocurrency portfolio. But stablecoins are also traded very easily and very simply (sometimes much easier than the underlying to which they are linked). Finally, the capital gains are secured and converted into stablecoins (if 1 USDT = 1 $, if the dollar goes up, you will own more Tether). So,
Best of all, stable coins can allow you to secure your crypto capital gains without being taxed. Indeed, to collect a capital gain in cryptocurrency (such as Bitcoin for example), you can convert it into a stable coin rather than recovering your earnings in euros.
In fact, the capital gains realized during operations involving the conversion of your crypto-currencies into national currency are currently taxed at the flat tax. If you stay in the Blockchain, you are not taxed. This practice, known to seasoned active investors, therefore makes it possible to delay and mitigate taxation.
Crypto-equity crowdfunding: another use of crypto currency
Finally, crypto-currencies have another function, more niche but just as important: the financing of projects by raising funds from people (individuals and institutional investors or business angels). You may be wondering: what is a cryptocurrency ICO? It is neither more nor less than a fundraising in cryptocurrency.
Crypto-currencies can indeed also be used to finance companies via crypto-equity crowdfunding, crowdfunding in virtual currencies. The process, which has been widely developed since 2014, consists of financing equity crowdfunding through virtual currency.
This type of practice is referred to by the term of ICO or Initial Coin Offering . Several platforms offer this solution, such as Swarm for example.
WHAT MAKES THE VALUE OF A CRYPTOCURRENCY?
Why is a cryptocurrency going down? Why is a cryptocurrency falling? How does a cryptocurrency increase in value? Find out what are the factors that influence crypto prices.
Confidence in virtual currency
First, as with any currency, virtual or real, the founding element is trust. People need to trust cryptocurrencies in general and trust a particular cryptocurrency, but that’s not impossible – far from it.
During the Greek crisis, some people massively bought Bitcoin, a currency that inspired them more confidence than that, real and regulated, which was hit hard by the monetary crisis and had to face galloping inflation.
In addition, to flourish and see its price advance, a cryptocurrency needs a favorable regulatory framework and a benevolent approach from regulators. On September 26, 2019, Bitcoin jumped 42%, from around $ 7,000 to over $ 10,000, after Xi Jinping’s statements about the potential of Blockchain technology, which he called a “major breakthrough” for innovation independent of basic technologies ”. The 3 rdBitcoin’s largest daily rise is therefore largely due to China’s pro-Blockchain policy.
In its wake, other cryptocurrencies adopted a bullish movement. China, by praising the underlying technology of Bitcoin, gave a strong buy signal to market participants who saw in the statements of the Chinese President a clear desire to allow the development, if not the acceleration of cryptos, this which naturally boosted the entire sector.
More recently, at the start of 2021, it was the sudden appearance of the single word “Bitcoin” in Elon Musk’s Twitter biography that caused the price of virtual currency to soar, shortly before the billionaire whimsical announces that it has invested $ 1.5 billion in Bitcoin and offers Tesla customers the opportunity to buy their cars with the most famous cryptocurrency.
The boss of SpaceX and Tesla poses as a real influencer and ambassador of Bitcoin, helping to create a feeling of confidence in this cryptocurrency in particular, but also in cryptocurrency in general. Elon Musk has indeed also provided support to DogeCoin.
Note, however, that Elon Musk’s exits also produce the opposite effect depending on the content of the remarks made by the boss of Tesla. Thus, on May 13, the latter finally returned to the possibility of buying a Tesla in Bitcoins.
The May crypto crash followed shortly after this statement. On June 4, 2021, bitcoin lost as much as 8% after Elon Musk tweeted suggesting a potential break with the first cryptocurrency by posting a heartbroken emoji and a reference to a popular song by rock band Linkin Park.
Anyone who establishes himself as a true cryptocurrency guru significantly varies prices according to his tweets which have a direct consequence on the confidence of investors in a particular currency.
The number of users of the crypto currency
What also makes the value of a virtual currency is the importance of its network and the number of people who use it all over the world.
The more users a cryptocurrency has, the more its value increases, which means the price of the token goes up.
Two essential factors will push people to buy a virtual currency: the penetration rate in the real economy (that is to say the ease with which one can buy goods and services in real life by paying with said crypto). currency) and the prospect of positioning itself in a crypto-asset while achieving a relatively large capital gain.
Speculation is still the main driver of the development of cryptocurrencies and their prices vary considerably depending on the appreciation of traders who think they will make money easily or not on a particular token, creating bubbles as in 2017-2018. . Intrinsic value doesn’t really come into play. And the situation is very likely to continue as long as demand in the real economy remains relatively weak.
The growing democratization of virtual currencies is boosting the price of cryptos
The democratization of virtual currencies reflects the growing confidence of the general public in this type of asset.
Individuals will now be able to pay for more purchases of goods and services via virtual currencies with their Paypal account as we have seen previously or with the future Facebook token, the Diem, which will make it possible to pay for purchases on the marketplace of famous social network.
Governments and central banks are also showing more inclination to adopt virtual currencies with an effort made on the regulation of crypto currencies and the emergence of digital currencies from central banks .
Finally, the financial markets also seem to be making room for cryptos. Many brokers now offer to invest in virtual currencies. Several large investment banks have a unit dedicated to crypto assets and more and more traditional funds and hedge funds are positioning themselves in crypto assets. Last notable event: Coinbase , the US crypto exchange platform went public in April 2021.
HOW TO INVEST IN CRYPTOCURRENCY?
In January 2020, the Institute for Marketing and Opinion Studies CSA – for Consumer Science & Analytics published a study on “the French and new means of payment” which reveals that 74% of those surveyed were aware of cryptos as a means payment (13% know how it works) and the proportion of French people who would be ready to pay for their purchases if they were accepted everywhere is close to 20%.
It must be said that according to a study carried out in April 2019 by the crypto exchange BitFlyer, two thirds of the 10,000 Europeans questioned believe that cryptocurrencies will still be there in ten years . However, barely a tenth of those surveyed bet on the use of cryptos as a currency in the future.
Are you one of the many French people who do not know how to buy cryptocurrency but you are not lacking the urge and you do not know how to proceed? Find here our explanations and advice on how to position yourself in crypto currency.
2 ways to buy your virtual currency
There are two ways to get crypto currencies:
by selling a good or service and demanding payment in the cryptocurrency of your choice;
by converting “classic” currencies (euro, dollar, etc.) into encrypted currency.
Kraken, Bitstamp, Poloniex, Coinbase, or even Circle for example make it possible, for example, to convert euros into Bitcoins quite easily, or even into other virtual currencies.
To convert your euros into Bitcoins, you must register on an exchange platform by providing an electronic copy of an identity document and a recent invoice (gas, electricity, internet) to prove your address.
Choose your crypto currency exchange platform or virtual currency broker
Crypto currency exchange platforms like Coinbase, Bitpanda or Binance allow you to acquire and trade active crypto directly, without going through derivatives .
To avoid scams and to see more clearly in the offer of crypto-currency intermediaries, the Pacte law has set up a new specific regime governing these service providers on digital assets (PSAN).
According to the AMF, these PSANs bring together all “financial intermediaries who offer various services relating to investment in crypto-assets”. Since December 2020, these PSANs must, in order to be able to offer crypto-asset custody services or access to crypto-assets or the purchase / sale of crypto-assets against currencies having legal tender, must be registered. with the financial market policeman who will ensure the reliability of the service provider.
Any actor who has not registered may find himself on the AMF’s blacklists.
In addition, an optional authorization can also be requested by the PSAN which, after having obtained it, will have the right to be able to canvass new customers.
Before any investment and any transaction, check that the actor with whom you plan to deal is not on the AMF’s blacklists, that he is registered with the Autorité des Marchés Financiers and, if you are are canvassed, that this actor has the authorization which gives him the right to do so.
Create a cryptocurrency wallet
Whatever your method of obtaining, you will have to create a “wallet” in order to keep your change.
An encrypted currency wallet is an address in the form of a series of numbers which can be accessed using a password. You can create a Bitcoin address and password for yourself for free and quite simply on a dedicated platform like BitAddress.org for example. For other cryptocurrencies, other specific platforms exist. Cryptanor thus supports several currencies.
Finally, to pay with cryptocurrency (or receive payment in cryptocurrency), an intermediary is necessary. You will have the choice between:
an exchange platform similar to a broker;
software to download.
Please note, these intermediaries usually charge commissions. We also cannot recommend enough that you choose your intermediary carefully, many of them have already gone bankrupt.
Also watch out for scams of all kinds that flourish on the web and “brokers” who refuse to return the sums held in your account. “
How to trade cryptocurrency
Advertisementetoro virtual currency
All over the world, new initiatives are developing to invest in the cryptocurrency market. Thus, the New York Stock Exchange, announced in August 2018, the creation of the “Bakkt” platform by the Intercontinental Exchange (ICE), parent company of the New York Stock Exchange (NYSE), which makes it possible to buy, sell and store Bitcoins.
But the United States is also seeing the creation of trust companies specializing in crypto currencies such as LLC and ITbit, two companies which, in addition to meeting the requirements of the New York State Department in terms of capitalization, reserves, compliance, protection of consumers and cyber-security, also provide guarantees of computer storage systems and cold storage vault systems for Bitcoin holdings of the famous GABI fund. In addition,
In France, individuals who want to position themselves on the crypto-currency market can turn to a specialized online broker who offers virtual currency trading via CFD-type derivatives . For example, eToro allows you to trade Bitcoin, Ethereum, Ripple, Bitcoin Cash, and Cardano. IG allows you to trade Bitcoin, Ethereum, Ripple, and Litecoin. XTBallows you to trade Bitcoin, Ripple, Bitcoin Cash, Litecoin and Ethereum.
You will also be limited in terms of leverage. Indeed, a CFD on cypto-actives cannot have a leverage greater than two. Recall that 89.4% of retail traders lose money according to the Study of results of retail investors on CFD and Forex trading in France carried out by the Autorité des Marchés Financiers on the basis of the results obtained by nearly 15,000 French retail traders from 2009 to 2013. The AMF also reminds that the financial intermediary who sells this type of CFD must be approved and, as such, appear on Regafi’s registers .
Since June 1, 2021, it is possible to invest on the Paris Stock Exchange in Bitcoin or Etehereum via listed index products. These ETP (Exchange Traded Products), financial products relatively close to ETFs , track the price evolution of Bitcoin or Ethereum. VanEck, 21Shares, ETC Group and WisdomTree now offer ETPs on Euronext Paris and Amsterdam which allow French retail investors to position themselves relatively easily on the two main cryptocurrencies in terms of capitalization.
CRYPTO CURRENCY TAXATION 2021: HOW TO CALCULATE THE CAPITAL GAIN AND DECLARE THE GAINS IN VIRTUAL CURRENCY
Capital gains generated by the activity of buying and reselling crypto currencies are taxable as “digital assets” since 1 st January 2019. This is the flat tax of 30% which applies to gains from crypto currency trading activities. The taxpayer nevertheless has a transfer allowance of 305 euros per year.
Note: transactions are only taxable when converting virtual currencies into traditional currencies such as the euro, the dollar or the Swiss franc, including if the money remains on the exchange platform without moving.
The amount of its capital gains must be indicated in the income tax return, in the box “Capital gains or losses on digital assets”, to which must be attached the form 2086 providing details of taxable transactions.
6 TIPS FOR INVESTING IN CRYPTOCURRENCY
1. Understanding Blockchain Technology
Before investing in this type of currency, make absolutely sure that you understand this innovation and in particular the technology behind it. It ultimately comes down to fully studying the Blockchain technology from which crypto currencies originate. Also, and above all, pay attention to the details that differentiate currencies from one another: the programming language, the blockchain validation system, governance, the ability of the currency to adapt to an order of magnitude change of demand for example.
2. Take into consideration the token expansion limit
The unit of cryptocurrency is called a token. The number of tokens created can be limited, as is the case with Bitcoin which will be limited to 21 million Bitcoins in circulation, making the product relatively rare, which of course contributes to its value. But a cryptocurrency can also follow a deflationary pattern. In this case, the quantity of money in circulation is unlimited, which could over time encourage the stagnation (or even the decrease) of its price.
3. Check the transparency of virtual currency
Favor a cryptocurrency with a website with clearly identified investors and developers, a presentation of the project, possibly a roadmap indicating the planned technological advances. If none of this is accessible, beware, you could invest in a Ponzi scheme.
4. Stay informed on cryptocurrency websites
To be up to date in this ultra-niche and ultra-geek field, and therefore to ensure an investment under the best conditions by having all the information on the targeted asset, it is better to look for the information where it is found, that is to say on the web! Many cryptocurrencies offer their own websites, but broaden your search to community websites such as Reddit or Slack which will allow you to publish, consult articles, discuss and share issues and opinions. The Bitcointalk forum fulfills the same role but is exclusively devoted to cryptocurrencies (not just Bitcoin because it has a dedicated altcoins section).
5. Learn about the quality of virtual currency developers and their funding
What makes the success of a crypto currency above all is the quality of the developers who are at the origin of this innovation. So check their experience, training, work history, etc. Do they form a close-knit team with good rapport? You can verify that their interactions on the Slack or Reddit community are both cordial and constructive.
Finally, you must know who pays the developers: a company or a private equity fund outside of cryptocurrency? Are developers paid with their cryptocurrency? The important thing is to be able to assess the motivation of developers and possible conflicts of interest.
6. Limit your investments in these volatile, high-risk assets
Volatility is one of the major characteristics of cryptocurrencies. Thus, the value of a crypto currency, that is to say its price, can increase or decrease, very quickly, in an unpredictable way. In question: its young economy, its unusual nature and especially its sometimes illiquid markets.
And the number of platforms further adds to the lack of liquidity of the tokens. Thus, at the end of 2019, “a volume of 143 bitcoins is enough to vary its price by 1% on the Bitstamp platform. Coinbase and Kraken are much more liquid, and it is respectively 456 and 672 bitcoins that must be exchanged to move the price of the leader in cryptos by 1% ”reports the site Les Echos.
Investing in crypto currency is therefore not recommended for cautious profiles with a strong aversion to risk. For others, think all the same not to keep a large part of your savings in Bitcoin or others which remain high-risk assets. There is a real risk of losing a large part of the money invested in this way.
If you are tempted by the cryptocurrency adventure, go for it with money that you are ready to lose. It must be an investment representing a very small part of your financial assets.
Cryptocurrency is more of an experiment to try if you feel like it than a reasoned investment made with a view to diversification. Wanting to make money really fast is never a good reason to invest in cryptocurrency.
Some Questions About Cryptocurrency?
What is a cryptocurrency?
The term cryptocurrency refers to both a virtual currency and the peer-to-peer payment system that goes with it. These are virtual currencies without physical media, not regulated by a central body and whose value is not indexed to a legal currency or a commodity.
How to invest in a cryptocurrency?
You can invest in cryptocurrency by purchasing tokens through a specialized platform. You can also trade crypto currencies through an online broker like eToro , by investing in a derivative that has virtual currency as its underlying. Be careful in any case to only devote a very small part of your assets to this type of investment.
What makes the value of a virtual currency?
The price of a cryptocurrency is linked to the confidence it inspires among investors, to its technical characteristics, to the ease with which we can or not buy things in real life with it, but also to the possible more. -value that the virtual currency will allow to achieve.
What is a cryptocurrency used for?
There are several reasons to use a cryptocurrency: to buy goods and services, to realize short-term capital gain for the purpose of speculation or to invest for the long term in an innovative technology that is believed to be useful. will revolutionize digital transactions.