Known for its volatility, Bitcoin and some other crypto-currencies are an interesting investment to diversify your asset portfolio or take your first steps in trading. Here’s how to avoid beginner’s mistakes.
Despite some low periods when Bitcoin prices can sink into the abyss, investing in these assets has so far proven to be a good deal in the long run. But beware: investing in crypto-currencies is not without risk. The first thing to note when entering this world is that Bitcoin has no official price. This is because each exchange platform proposes its own according to the supply and demand it observes among its users. There are significant variations between platforms, sometimes by several thousand dollars. So be careful before buying.
There are two main reasons for the price differences. First, liquidity: some platforms do not have the same volume of trading. This can affect the price because it is calculated on an average of the transactions made internally. Secondly, no single institution is yet a reference in the sector. There is no Nasdaq to act as a referee, as is the case on the technology stock market. Furthermore, a study by management company Bitwise Asset Management published a study at the end of March 2019 arguing that 95% of crypto trading volumes would be fake. This suggests that prices could also be truncated on some platforms. So be careful.
Investors should also keep in mind that the price, in dollars or euros, displayed by the platforms is probably higher than the real price. Indeed, they are paid by taking commissions on each transaction: the greediest have an interest in displaying a high price.
Easily find the Bitcoin price in euros
To easily find the price of Bitcoin in euros, we recommend that you visit the website of the Chicago Mercantile Exchange (CME), one of the major American stock exchanges. It offers an average price calculated in real time on the main exchanges. You must then convert it into euros via a specialized site like XE. You can also consult OnChainFX, a reference site aggregating data from most of the world’s platforms.
Buy bitcoins using e-wallets
There are a plethora of platforms offering to buy bitcoins. We have made a complete comparison with the strengths and weaknesses of the popular e-wallets (fees, level of experience required, etc.). You’ll find trading spaces reserved for advanced investors (Binance, Kraken, Bitstamp, etc.) and more intuitive brokers (Coinbase, Coinhouse, etc.). The latter are generally easier to use but charge higher fees. There are also a few physical counters in Paris (Coinhouse), Caen (Bitcoin Avenue), Brest (Byzantine) or Bordeaux (Comptoir des cyber monnaies). This is an opportunity to receive personalized advice but the fees are also higher. If you are looking to buy btc with neteller, the linked blog post will be helpful.
Overall, we recommend avoiding payment by credit card. The commissions are very high (up to 10%). Bank transfer is the most economical solution but will require a slightly longer validation process (about three days in total if we count the validation of your identity). It is also possible that your bank will block the transfer. It will then be necessary to ask to sign a release stating that you are aware of the risks involved in this investment. An audit is the best when it comes to web/app security
Depending on the value of your investment, it may be worthwhile to purchase a hardware wallet. It will prevent you from leaving your assets on the platforms. These are exposed to hacking attempts. A hardware wallet looks like a USB key and allows you to keep your cryptocurrencies in an offline space. The French Ledger offers some of them of very good quality for less than 100 euros, just like Trezor.