For many people this has an immediate, practical implication – for example, in El Salvador, where Bitcoin became legal tender last month, citizens have watched their $30 worth of Bitcoin gifted from the government appreciate to around $37. Not a life changing figure, perhaps, but those who are paying attention will get the message: unlike the dollar (or the euro), which buys you less every day, Bitcoin buys you more.
For some, though, this skyrocketing price leads to the inevitable question – is it too late to invest in Bitcoin? The answer is a resounding no!
Diversifying your investment portfolio with a percentage in Bitcoin looks like an ever more attractive idea, especially as capital gains on Bitcoin are tax free for residents of Portugal.
One Bitcoin divides into one hundred million Satoshi, affectionately known by Bitcoiners as sats. Saving in Bitcoin is referred to by the Bitcoin community as “stacking sats.” You can buy ten euro’s worth of Bitcoin, if you want to. This would get you 20,93 sats at the time of writing.
If you don’t have 48,000 euros knocking around as spare savings to buy a whole Bitcoin, the good news is that you can buy a fraction. But how – and where?
The days when Bitcoin was thought to be the territory of “super nerds” are long gone and there is an increasing array of services available to those who would like to invest. Bitstamp (www.bitstamp.net ), Kraken (www.kraken.com) and Bitfinex (www.bitfinex.com) are some of the best known exchanges where you can sign up and create an account. Unlike our local Credito Agricola, they do not have local offices where you can have face to face assistance with any issues you might come across, but they do have excellent online customer support services. Nuri (formerly known as Bitwala, https://nuri.com ), a German company, offers a great service, integrating both a bank account and bitcoin exchange, really facilitating the process of converting your euros to Bitcoin and back again.
Creating an account requires you to walk through a few steps of providing proof of address and identity and if you are depositing large amounts you might be asked for proof of where your funds came from. But once you have completed these administrative details you can transfer euros from your bank account to your account on the exchange and select the option to buy Bitcoin. Selling your Bitcoin is also done on exchange. In that case you simply click on the sell option and you will be able to transfer your money back to your bank account.
All in all it’s a seamless and user friendly experience. You can do this for whatever amount you would like to transfer – be it 10 euros or 10,000.
For those of us who prefer the more cautious approach of stacking our sats in smaller amounts on a regular basis, there are some excellent options on offer. Bittr (https://getbittr.com) is a European based company which allows you to make regular transfers straight from your bank account – they buy Bitcoin on your behalf and send it to your wallet.
The major advantage of this is that it is automated. You could, say, set up a standing order to send a small percentage of your salary or pension on the day that it’s paid to you, once a month, or squirrel away 25 euros per week or per month for a rainy day or as a digital piggy bank for the children. Bittr charges a small fee of 1,5% for this service, plus the Bitcoin network transaction fee- to my mind well worth the cost of being able to set it up and then put it out of your head, knowing that your savings are building without the stress of watching the market to pounce on the best moment to buy. The same service is available to Nuri’s custormers and customers of the American based company Swan Bitcoin (www.swanbitcoin.com) .
In order for Bittr to send you your Bitcoin, you need to first have set up a Bitcoin wallet. There are clear instructions about how to do this on the Bittr website. You can’t cash out by selling through Bittr – you would need to first transfer your Bitcoin to an exchange and sell from there, but this process is a simple one.
And with the prices of Bitcoin looking set to rise in the coming times, who’d want to sell their Bitcoin anyway?
In next week’s article we’ll take a look at keeping your Bitcoin investments safe once you have bought from an exchange.