How to invest in cryptocurrencies: Binance, Coinbase, Bitpanda, Kraken and KuCoin

Did you know that, according to Fintonic, the volume of people who made a transaction in cryptocurrencies multiplied by 11 when comparing the first quarter of 2022 with the same quarter of 2020?

But are not only investors in cryptocurrencies increasing, but also the amounts that are invested and exchange platforms that manage this type of investors.

In this article, we will tell you which are the leading exchange platforms to buy cryptocurrencies, how to invest in cryptocurrencies safely and what must be declared to the Treasury about cryptocurrencies in 2022.

5 exchange platforms you should know if you want to buy cryptocurrencies: Binance, Coinbase, Bitpanda, Kraken, KuCoin

As we said before, investments in cryptocurrencies grow in amount and volume. In fact, according to Fintonic, 20% of the investments made through Binance are above 300 euros. Another data to highlight is that users are usually loyal to a cryptocurrency platform; in fact, 79% of users use a single platform and only 3% use more than two.

If you want to know where to buy cryptocurrencies, these are the platforms you should know about:

Binance

It is a platform of Chinese origin that, during the first three months of 2021, was the most used in Spain, surpassing Coinbase. Binance offers a wide variety of cryptocurrencies that you can buy and has good customer service available 24 hours a day. Registration on Binance is simple and free and has a mobile application.

Coinbase

Coinbase and Binance had a combined market share of around 84% during the first quarter of 2022. It is characterized, above all, by its secure and offline storage. To buy and sell cryptocurrencies through this platform, you only need to register and open an account. It also has an app for mobile phones.

Bitpanda

It is one of the largest platforms and was founded in 2014. It offers more than 25 different cryptocurrencies and other products to invest in.

Kraken

It has been awarded the rating of the safest cryptocurrency exchange. It facilitates investment for people unfamiliar with the world of cryptocurrencies as it offers guides, various resources, and quality customer service. Security is essential for this platform, and so is the privacy of funds.

KuCoin

It is a platform where you can exchange cryptocurrencies and buy and sell cryptocurrencies such as Bitcoins, Ethereum, Litecoin and Cardano, among others. The deposit of funds does not charge commissions, but it does for the withdrawal.

How to buy cryptocurrencies on Binance and other exchanges

News about cryptocurrencies arises daily: price variations, risky investments and security recommendations from official bodies.

Buying cryptocurrencies on Binance and other exchange platforms is very similar. You can follow the following steps to register and operate with cryptocurrencies:

• Record. Click the button on the platform to sign up.
• Include personal data. Next, they will ask you for personal information such as name, surname, email and password.
• Confirmation email. You should receive an email containing a link to confirm your account.
• Send ID and include a payment method. So that your identity can be verified and to be able to buy, you must have a copy of your ID and a payment method (credit card or other).
• Buy and Sell. Once all of the above is done, you can buy and sell the cryptocurrencies you want.

How are cryptocurrencies taxed in 2022?

As you have seen, buying and selling cryptocurrencies can be a simple process. But few people know that since you operate with cryptocurrencies, arise tax obligations. We see some tax aspects below to understand how cryptocurrencies are taxed in Spain in 2022:

• Obligation to include them in the Income Statement. If you have cryptocurrencies, you must declare the final amount obtained from its sale or income generation (loss or profit). They are included as savings income, and the applicable percentages vary from 19% to 26%.
• Wealth tax and cryptocurrencies. Another of the taxes that you should consider about cryptocurrencies is the Wealth Tax. If you exceed the limit established by each autonomous community, you must submit the said tax.
• VAT. If you are self-employed in the sale of cryptocurrencies and it is your economic activity, you will have to register in the corresponding section in the Economic Activities Tax; on the other hand, you should know that operations with cryptocurrencies are subject to VAT but exempt from payment.
• News on the taxation of cryptocurrencies in 2022. The tax regulations tend, more and more, to establish control over the benefits that taxpayers obtain with cryptocurrencies. In general, two obligations have been regulated:
  • That of the companies that manage cryptocurrencies to report the balances and the identity of the holders.
  • The one to report addresses, tax identification, price and date of the operations carried out.
• Consequences of not declaring cryptocurrencies in Personal Income Tax. If you are obliged to fill in the gains obtained with cryptocurrencies, and you do not, the Tax Agency may impose a penalty (if required before filling in out of time) of between 50% and 150% of the Personal Income tax fee.

In short, investing in cryptocurrencies with Binance or other platforms can be a way to obtain an economic return. Still, you must also act cautiously to avoid risks due to the volatility of digital currencies. You must also inform yourself, with a trusted tax advisor who knows the taxation of cryptocurrencies, about the taxes you must file and the deadlines to avoid Treasury requirements or sanctions.