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Investing in Bitcoin can sometimes be tricky. While others say it is completely legal, this actually depends on a lot of different factors. Before adding Bitcoin to your portfolio, here are a few things you need to know in order to ensure that what you’re doing is perfectly legal.
Is It Legal to Invest in Bitcoin?
The answer is yes, but it depends on where you buy your Bitcoin and where you are when you buy Bitcoin. In order to follow the rules, you have to buy your Bitcoin from a reputable vendor that abides by regulatory rules, especially if your government has special laws for cryptocurrency investment.
Just like other cryptocurrencies, what really matters is how you buy cryptocurrency. Regulatory rules on crypto differ from place to place, and while some places are more lenient regarding ownership of crypto, other places deem ownership of cryptocurrencies illegal.
Three Things to Do Before Investing in Cryptocurrency
Before investing in cryptocurrency, there are a few things to do to ensure that your investment is legal and that you are also minimising the risk of losing money. Aside from legalities, cryptocurrency is categorised as a high-risk asset and should also be treated accordingly. Here are a few things you should do before investing.
- Know the legalities of your country regarding crypto
- Do your research
- Get connected with reputable partners
1. Knowing the Legalities of Your Country Regarding Crypto
In order to search for your country’s laws regarding crypto, you can always Google “(country name)+crypto+laws,” and the results should show you whether or not there are regulations when it comes to owning or trading cryptocurrency. In the event that no results show any negative laws prohibiting crypto, cryptocurrencies might be considered legal in the country.
In order to be completely sure, however, it is recommended that you contact a bank, financial advisor, or financial expert regarding the legalities of crypto in your country. Once everything is cleared out, and you find that it is legal to trade crypto in your country, follow the next step.
2. Do Your Own Research (DYOR)
Cryptocurrencies are considered extremely high risk, and just because they are legal doesn’t mean that they are 100% profitable. In order to earn from Bitcoin trading or investing in crypto, you have to pick the right asset, enter at the right time, and sell at the right time at the right price.
There are thousands of cryptocurrencies out there, and it is recommended that you only invest your money in blue-chip cryptos to avoid unwanted risks. Blue-chip cryptos are cryptos that have large market caps, a strong community behind them, and are usually available to trade on different trading platforms.
Timing is also very important when it comes to crypto trading or investing. If you’re investing for the long term, understanding whether the chart of the crypto is bullish or bearish (price going up or down) is very important.
3. Connect Yourself Only with Reputable Brokers
Although it is legal to own or trade cryptocurrencies in some countries, sometimes there are certain precautions, and you are only allowed to own or trade cryptocurrencies from certain brokerages. These brokerages have to abide by the regulatory laws of the country for them to be considered legal.
With hundreds of trading brokers and platforms out there, finding one that allows you to trade or invest in Bitcoin legally can be quite hard. Among a few others, immediate-edge.io aims to help with the searching process and provide you with all the necessary tools you would need to trade successfully. A lot of traders are concerned about their identity and how they operate on trading platforms and with brokers. Thus shouldn’t be a concern with this one as the team has a strong privacy policy.
When connected to a broker, you can ask them straight away if it is legal to trade or invest in Bitcoin through their platform.
Conclusion
Although you might have heard of stories wherein Bitcoin investors got rich out of a small amount they invested a couple of years ago, things have changed, and it is important to understand where BTC is heading in the future. Consult with a financial advisor before trading or adding Bitcoin to your portfolio to ensure that your investment won’t negatively impact your financial status.
