Is Cryptocurrency Profitable in Spain?
Cryptocurrency is a digital currency which exchanges information instead of hard cash, but this is not the main distinction between crypto and fiat currencies. The important difference is that cryptocurrency is decentralized, unlike traditional fiat currencies which are regulated by governments and banking authorities. This decentralization is thanks to the fact that crypto is traded and recorded on a digital blockchain on computers across the world. Having a decentralized currency is an appealing option for many since it takes the power back from these centralized institutions.
At oneHOWTO, we ask is cryptocurrency profitable in Spain? We find out what it takes to make money and look at crypto exchange in España.
What makes cryptocurrency profitable?
Although cryptocurrency uses blockchain technology to decentralize its digital currency, this doesn't mean it is unregulated. The regulations will depend on different countries and its newness means certain regulations are still being processed. Although cryptocurrency can be traded internationally, its profitability depends to a large degree on various country-specific factors. These include the following:
- Regulations: as stated above, the regulations in each country vary. Some governments are stricter than others when it comes to regulation of digital currencies.
- Exchanges: not every country has the best access to exchanges. Some countries will have much greater access, but there are others which have complete bans on trading crypto. This is the case with countries such as Bolivia.
- Tax: some countries have higher rates of tax than others. Some might have taxation on certain types of crypto transactions, but not others. These too can vary according to country. Sometimes cryptocurrency might fall under one type of taxation, but not another.
- Culture: while every country will have a certain amount of support for cryptocurrency, the culture of how much it is accepted can vary. While this is reflected in the legislation and regulations they enact, it is also a broader cultural acceptance which differs.
- Market liquidity: the market for crypto exchange can differ according to country, with some markets being more liquid and hospitable to trading than others.
- Risk: some countries use crypto exchanges and currencies which are more prone to risk than others. This is often in the form of scams and securities fraud. Since regulations vary, the ability to scam can equally be a riskier proposition in some places more than others.
Any investment is a risk, but the purpose of cryptocurrency is to bring power back to a greater number of people. This idea is to provide greater financial inclusion to a greater number of people and stop being at the mercy of a centralized authority. However, since cryptocurrency is in its relative infancy, there are some places where it is better to trade than others.
How is cryptocurrency trading in Spain?
As we have stated above, not every country will have the same approach to digital cryptocurrency as others. We have already mentioned that it is banned in some countries, but this is not the case with Spain. In fact, cryptocurrency has been relatively well embraced in Spain. Using the criteria above, we see what trading crypto is like in Spain:
- Regulation: a law was passed in 2021 called the Law on Measures to Prevent and Combat Tax Fraud. This law took away some of the anonymity for crypto transactions, but this does not affect the ability to make money from crypto. What it affects is the taxation after money is made.
- Exchanges: Spain has a relatively good access to exchanges with a good level of variety, in addition to accessibility. These exchanges and platforms mean there is ample opportunity to buy, sell and trade cryptocurrency.
- Tax: as the 2021 law has determined, the information regarding the trading of cryptocurrency in Spain needs to be shared with the government. This means that gains and income need to be taxed from earnings on the amount of crypto you hold in assets. You may also be subject to inheritance or a wealth tax, depending on your circumstance.
- Culture: more and more business are adopting the use of cryptocurrency in Spain. It is something that is evolving and is dependent on many factors, but there is a growing culture of acceptance. There is a diverse and active crypto-community in Spain.
- Market liquidity: there are different exchanges and markets available for crypto users in Spain. This means access for buying, selling and trading crypto is good.
- Risk: there is no greater risk in Spain than in other countries which have the same level of acceptance. While regulation means there is tax, it also means there is a greater level of awareness of scams and fraud.
With all of these criteria in mind, we can say that cryptocurrency can be profitable in Spain. How profitable will depend on your specific investments and the fluctuations of the market, but there is money to be made. Any type of trading is a risk and you will need to learn how crypto-trading works before starting on your journey.
How do I trade cryptocurrency in Spain?
If you have decided you want to investigate digital coins and trade cryptocurrency in Spain, there are certain cryptocurrency exchanges you can use which will help you get started. You should choose one which is safe and respected, but also gives you good rates. We will use MaxSwap as an example since it offers a great commission rate at 0.3% and trades in a wide variety of cryptocurrencies.
When you sign up for your cryptocurrency exchange, you will need to create a wallet. This wallet allows you to control your digital currencies and ensure you keep your public and private keys safe. It will also help connect to your bank account and providing encryption and signing help.
MaxSwap also has an advanced AI telegram robot to help you when you are unsure of anything. For example, it can help you when you are making crypto-crypto, crypto-dollar or crypto-euro trades. It is intuitive and will explain everything for when you want to start trading cryptocurrency in Spain.
If you want to learn more about how to best control your finances, check out our article on how fixed-term deposits work.
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