The courses are going crazy, maybe now is the time to sell the jackpot. But getting out of the bitcoin game, ether, ripple, and the like, you have to prepare in advance.
Having a wallet filled with cryptocurrency can be rewarding for the ego, but to make purchases, these funds must also be repatriated in hard and hard currency, in internationally accepted currencies (euros, dollars, or others).
Having hundreds of thousands of euros in cryptocurrency is therefore one thing. It is quite another to own those funds. There are, however, services to make a conversion. But here again, if for small sums the procedure is relatively simple, for large investors, the problem can turn out to be more complex.
Bitcoin is having a hard time. The cryptocurrency is experiencing one of the largest drops in its history with a drop in value of around 70% since its record level in December 2017. At the time, a bitcoin could be worth 20,000 dollars against only 6,000. currently. This tumble may motivate currency owners to retire.
Especially since the turmoil is inherent in the very existence of bitcoin. In November 2013, the currency was already experiencing one of its worst days. As Reddit points out, the face value was lower back then, but the coin’s price drop was still around 87%.
Still, this roller coaster may have got the better of your recklessness. In this case, there is an adage that a portfolio owner should always keep in mind: Buy low and sell high. It is, therefore, in principle, not useful to resell your assets in a low wave. Better to wait for a comeback. Unless you decide to play off the beat. In this case, it is recommended to have strong kidneys.
Services that exchange bitcoins/euros
Once the decision is made, it is advisable to go through a third-party service to transfer your assets to a traditional currency. But like a foreign currency, it is particularly important to spot the exchange rates and thus determine which will be the preferential rate to use. The “exchange rate” may indeed vary depending on platforms such as Bitfinex, Poloniex, Bitstamp, Coinbase, Binance, CEXio, Kraken, Cryptopia, Bittrex, or GateCoin.
Subsequently, services such as Paymium, BitStamp, Bitfinex, Coinbase, or Kraken allow you to transfer your cryptocurrencies to a bank account (for which you will have to provide the identifiers). There is no shortage of this type of “office” on the Web.
Note that the platforms may impose a delay of several days between the exchange request and the actual transfer to verify the identity of the wallet holder and account details.
What about taxes, Mo Money Mo Problems?
In principle, if your payments from the bitcoin wallet are important about your regular resources, this will arouse the curiosity of your bank. In this case, she will seek to know the origin of these funds. It is therefore mandatory to be able to justify each profit recorded. Still, you need to make your operations transparent.
As for taxes, the question is a bit more complex. As a matter of principle, the tax authorities should be notified when a person realizes a capital gain from one year to the next. Each taxpayer is therefore
required to declare the money earned from the time a purchase was made with or transferred in conventional currencies (no declaration is necessary if you are keeping your wallet).
Bitcoin as a coin
If you are not a cryptocurrency professional and the income generated is unusual, these gains will be considered non-trading profits (BNC). In this case, it is a question of a tax of around 34% for a threshold below 33,200 euros of annual turnover.
On the other hand, if you regularly reinvest in bitcoin, you change the regime. The gains are then subject to the industrial and commercial profits (BIC) regime. It may then be interesting to go through the micro-enterprise regime to take advantage of a ceiling of 82,800 euros per year for an average tax rate of around 15%.
Practice “Money Management”
Money Management is the art of managing your capital while controlling risks. It concerns both professionals and individuals. The primary objective of the trader is thus to maximize and protect his gains while limiting his losses. Protecting gains and limiting losses involves changing your strategy over time to optimize the risk-return ratio, that is, the ratio between the expected return and the risk represented should not be too out of balance. It’s a bit overwhelming, but having to keep an excellent logbook, paper, or chart, where you record all your trades is a good way to keep an overview of the evolution of your portfolio and your positions. Thanks to this data, you will be able to understand several things: Which trading profile suits you best? What are your strengths and weaknesses? How to build and improve your trading strategy.
Opt for a trading strategy
Training in bitcoin trading strategies is an essential prerequisite. Your strategy will guide you in three areas: entering a trade correctly, monitoring it, and exiting cleanly. Here are three different possibilities for investing in bitcoin. It’s up to you to choose the one that best suits your profile and your character.
Day trading
Day trading is an investment strategy that involves taking positions and closing them on the same day. This method takes time to quickly seize opportunities. Be careful, however, to control the leverage effect. Leverage refers to the use of debt to increase investment capacity.
Swing trading
Swing trading is also a trading technique that is perfectly adaptable to bitcoin trading. Unlike day trading, which takes a very short-term approach, this method has a rather medium-term horizon. It allows traders to spend less time in a day trading and focus on variables. Traders who prefer swing trading often use technical analysis to anticipate future price movements.
Bitcoin scalping
This technique is even shorter than day trading. We also often speak of “micro-trading”. It is about doing a lot of back and forth between buying and selling on the same day. The large variations in the price of cryptocurrencies and bitcoin make it possible to resort to scalping quite easily. But, be careful, it is important to master the technique.
Analyze the markets
Once your method is set up and your account is opened, verified, and credited, the analysis begins. To make your investment choices, you can then favor the method of technical analysis or that of fundamental analysis. Or combine the two.
The basis of technical analysis is the study of charts to determine the ideal time to buy or sell. Users of technical analysis seek to establish trends by drawing support or resistance lines. The analysis of the past behavior of the curve also allows conclusions to be drawn in the technical analysis.
Fundamental analysis takes the external environment much more into account and will consider the asset concerned in its global environment. When you decide to invest in the dollar after intervention by the European Central Bank, you are doing fundamental analysis. The moment external variables enter into your investment choice, you are in fundamental analysis. This also applies very much to bitcoin.
A tip: keep track
Despite these details, it is important to keep in mind that you may need to be able to justify your winnings. So be sure to keep the traces, evidence as you move forward to demonstrate the origin of the gains. By being transparent, the tax services will be better able to advise and support you.