Bitcoin (BTC) is increasingly becoming an asset class with expected sustainable performance. However, to invest privately in Bitcoin, the frequently promoted ETF and ETN are not the best choice.
The stories of freshly minted Bitcoin millionaires are currently multiplying again – no wonder: Since the beginning of the year, Bitcoin has been rushing from one all-time high to the next. The main reason for the positive price development of BTC is the newly awakened interest of institutional investors, who see in the mother of all cryptocurrencies a sustainable inflation protection paired with good profit opportunities. Such arguments also speak in favor of looking into Bitcoin as a private investor. However, the supposedly easiest and best method of buying Bitcoin ETF or ETN turns out to be a fallacy upon closer inspection. Those who buy real Bitcoin directly fare better for several financial reasons. We explain why:
1. Bitcoin ETF as exchange-traded funds are subject to capital gains tax under German law. Gains above the annual tax-free amount of 801 euros are therefore taxed at 25 percent. The same applies to the closely related Bitcoin ETNs.
In the case of real Bitcoin, on the other hand, the legal provisions on private sales transactions apply. This means that the sale of BTC with profits is completely tax-free after just one year of holding.
2. ETFs and ETNs based on Bitcoin usually incur fees, and at 1.5 to 2 percent, they are not exactly cheap. If you take care of buying and selling real Bitcoin yourself, you only have to factor in the much lower fees of crypto exchanges.
You can see that the little bit of effort you put into buying real Bitcoin will quickly pay off financially. Real Bitcoin means the coins or parts of them that belong to the 18.5 million BTC currently in circulation. Also Bitcoin ETF and ETN are usually physically backed by real BTC.
You do not get real BTC with Bitcoin CFD (Contract For Difference) and our research proves that there are a lot of black sheep hiding among providers of BTC CFDs under the umbrella title Bitcoin Trading Bots. So you should definitely keep your hands off such windy providers.
Conclusion: Buy real Bitcoin from a reputable provider
In Germany, for example, the trading platform eToro is a first port of call for buying real Bitcoin. eToro has proven to be a trustworthy trading place for years and complies with all German and EU-wide legal regulations on the subject of Bitcoin. eToro accepts PayPal as well as credit cards and other methods when buying BTC and does so without additional fees. This makes your investment in Bitcoin at eToro just as easy as buying ETF or ETN elsewhere.
Best place to buy Bitcoin: