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Bitcoin and other cryptocurrencies have always been entirely legal. The best proof of this is that every investor has to pay tax on the income they get from bitcoin or similar currency transactions. However, some African countries consider cryptocurrency trading and transactions illegal.

Some cryptocurrency-based transactions, on the other hand, may be illegal. These include:

• “stealing” cryptocurrencies;
• cheating on cryptocurrency miners;
• extorting;
• avoiding paying taxes or hiding bitcoins or other cryptocurrencies from the government.

It may also be illegal to engage in activities that require an appropriate license or permit, such as the organization of a cryptocurrency lottery or a para-financial activity.

Investing in cryptocurrencies with CFDs

Trading BTC Contracts for Difference is an alternative to the classic exchange. It is possible through an account at AdmiralMarkets Broker. With the help of this CFD provider, you can “bet” how the price of a bitcoin or any other instrument will change – without physically owning it.

The CFD contract obliges the trader and broker to cover the difference between the opening price and the closing price of the position. This type of contract’s advantage is the ability to invest even when there is a downward trend in the BTC market. In addition, when you trade crypto CFDs with a trusted broker, your money is in your bank account instead of a crypto exchange account. Other advantages of using this solution through a trusted broker are as follows:

• Possibility of using a lever,
• The possibility of reinvesting the profit from the transaction because the payoff is added to the “free funds.”
• Fast and free deposits/withdrawals,
• Help in the event of a lost password,
• Availability of short sale.

On the other hand, if you decide to invest in BTC on the stock exchange, you must consider challenges such as:

• The risk of a hacker attack and the need to transfer cryptocurrencies to external wallets that are not connected to the Internet,
• The need to purchase an external wallet and learn how to use it,
• No help in the event of an error in sending the currency or forgetting the password,
• High costs of transferring funds or long waiting times for its implementation.

In summary, you have three options to invest in bitcoin or other cryptocurrencies:

• Purchase and sale on the stock exchange – transactions with a relatively high risk of loss,
• Mining – extraction using encryption of the last transaction block; the process requires programming knowledge and specialized hardware from users,
• Purchase of contracts for differences (CFDs) described above – if you want to check what this type of transaction is all about, use the forex demo test version.

Are cryptocurrencies safe?

Any transaction that involves investing money in the stock market or forex can be considered risky – it is no different in the case of BTC and other cryptocurrencies. In the currency market, this is due to the financial leverage, which allows you to multiply profits and potential losses. In turn, the risks on the cryptocurrency exchange are much more numerous. Among them can be distinguished:

• Volatility – the cryptocurrency market requires a lot of time from the investor; you need to be prepared for high volatility and the need for constant price monitoring,
• Low acceptance – there are still countries that do not accept cryptocurrencies; experts assume it will be a long time before widespread bitcoin-based transactions become possible,
• Speculation and hacker attacks – the cryptocurrency market is full of people who artificially raise the price of bitcoin; there is also a risk of cyber attacks.

To reduce the risk, a user of BTC and other cryptocurrency exchanges can:

• Store your capital in different places,
• Always check the address of the website on which you log in and keep an eye on your passwords,
• Invest no more than he can lose
• Constantly expand your knowledge,
• Diversify your portfolio (invest in various additional options, e.g., stocks, currencies, raw materials).

To minimize the high risk of losing money, use the services of an experienced brokerage house. Thanks to such brokers, you can afford to trade BTC and other currencies of this type via CFDs, which are an interesting and safer alternative to mining and trading bitcoins traditionally.