Germany can definitely be considered an early adopter of Bitcoin and the entire cryptocurrency space. It was one of the first countries to recognize the Bitcoin for a form of private money as early as 2013, and early action by regulators in Germany has allowed for a high level of clarity on the laws and regulations that everyone must follow in that jurisdiction.
If you are interested in Bitcoin or any of the many altcoins available out there, Germany is one of the best places to get your first cryptocurrencies in a safe and completely legal way.
Are cryptocurrencies legal in Germany?
Bitcoin is a largely legal technology and financial instrument in Germany. Although it is not technically defined as a form of legal tender, there are many places, especially bars, across the country where Bitcoin is accepted as payment through on-chain or Lightning Network transactions.
While German citizens don't have to worry about having any legal problems when it comes to using Bitcoin as a form of money, there are still cryptocurrency laws and regulations to follow to avoid trouble.
Governments around the world want to be able to track the use of cryptocurrencies in illegal activities such as ransomware attacks, so exchanges will continue to collect a large amount of personal data about their users to comply with various anti-money laundering regulations.
In addition to regulating the use of Bitcoin and other cryptocurrencies on exchanges, users of the technology also need to understand that using Bitcoin for payments can have tax implications. Germany, however, is one of the better countries to live in when it comes to using cryptocurrencies as a means of exchange, as you don't have to pay capital gains if you held the asset for a year before using it to purchase a good or service.
What are the best cryptocurrency exchanges in Germany?
Due to the level of regulatory clarity and general interest in cryptocurrencies in Germany, there are quite a few high-quality exchanges to choose from in this jurisdiction. However, before you consider which cryptocurrency exchange in Germany will be best for your situation, think about your needs.
For advanced traders who are more interested in paying the best possible price for their cryptocurrencies, Kraken and Bitstamp are two of the oldest and most established exchanges in the world. Both offer their services in Germany. However, these two exchanges do not list every cryptocurrency under the sun, so those of you who are interested in trading more niche assets, can choose Binance.
Another interesting option for the German market is the eToro. However, it is important to realize that the functionality of cryptocurrencies on this platform is somewhat limited. For many cryptocurrency assets, users do not take ownership of them on this platform. Instead, financial derivatives are used to effectively bet on future cryptocurrency prices. For the more well-known coins, users can withdraw their holdings to a personal wallet.
What is the cheapest way to buy cryptocurrencies in Germany?
There are a number of established exchanges in Germany, and these types of advanced platforms for traders will always be the best option when it comes to determining the cost of converting euros into Bitcoin or other cryptocurrency.
Keep in mind, however, that not all cryptocurrencies have trading pairs with fiat currencies, which means you may have to swap your euros for Bitcoin before you can access the alternative cryptocurrency market.
This means that to access some of the more niche cryptocurrency offerings, you will have to pay transaction fees twice.
Some of the established exchanges that offer low transaction fees in Germany are Kraken, Bitstamp and Binance. If these platforms are too complicated for you, you can opt for an exchange that allows you to make your first Bitcoin purchase simply with a credit or debit card. Crypto.com is a popular option for making such purchases using traditional payment systems.
Is Crypto.com available in Germany?
Yes. Crypto.com is fully available in the country, which means Germans can use the popular Crypto.com Visa Card, as well as Earn, DeFi and NFT products.
Check - Crypto.com card and product reviews
You can even use Crypto.com tax software to settle your cryptocurrency taxes in Germany.
Where can I buy altcoins in Germany?
While there are many different exchanges that allow you to buy altcoin in Germany, the reality is that some of the most respected and trusted exchanges stick to Bitcoin and several other major cryptocurrencies.
If you are someone who wants to try your hand at smaller cryptocurrencies, you should take a closer look at the Binance exchange, which offers more than 1,000 different trading pairs and has one of the most reputable brands in the industry.
Binance - cryptocurrency exchange review
As always, it's important to remember that there's a lot of fraud out there, so be careful about putting large sums of money into these smaller assets that don't have even close to the liquidity that Bitcoin has.
How to buy Bitcoin in Germany?
Most cryptocurrency investors use cryptocurrency exchanges to buy their first cryptocurrency.
The process can be a bit time-consuming, but is relatively simple. It also varies from exchange to exchange, but generally consists of the following:
- Register with the cryptocurrency exchange of your choice
- Provide verification of identity (ID card, home address, date of birth, etc.).
- Determine how to fund the account (bank transfer, debit, credit card)
- Initiate a transfer to the stock exchange
- Use your funds to buy cryptocurrency
- Optional: Send your new cryptocurrency to a private personal wallet
How to buy bitcoin with a credit card in Germany?
There are several different platforms that allow you to purchase Bitcoin by credit card in Germany. The exchange that offers the lowest fees for this particular payment option is Bitpanda. In 2020 Crypto.com is running a promotion that makes their platform another attractive option for buying cryptocurrencies with a credit card.
While there's nothing wrong with buying bitcoin with a credit card when you're just getting started with cryptocurrencies, it's important to remember that these types of transactions tend to deplete the possible profits you could make when the value of your cryptocurrencies increases. You will end up losing money if the value of your cryptocurrency doesn't increase by at least 3% in almost all situations where you originally bought your cryptocurrency with a credit card.
Answer: Bitcoin and cryptocurrencies are treated as private money by the tax authorities - the German Federal Central Tax Office or Bundeszentralamt für Steuern (BZSt). This means that they are not property, legal tender or foreign currency.
Binance, Crypto.com, eToro i Coinbase These are some of the exchanges and platforms where you can buy cryptocurrencies in Germany. They are secure and allow purchases through bank accounts and credit cards.
The sale of cryptocurrencies with a profit of less than 600 euros at any time is exempt from taxation in Germany. Otherwise, ordinary cryptocurrency transactions are subject to income tax in Germany.
There are legal ways to avoid paying tax on cryptocurrencies. For example, holding it for more than a year. Holding it for a year exempts you from tax regardless of the profit made from selling it after that period. To take advantage of the cryptocurrency tax exemption for staked tokens, cryptocurrencies and tokens must be staked for 10 years after purchase.
Germany finally announced a ban on Binance in 2021. As a result, the exchange no longer offers futures and derivatives in the country. However, citizens can still open accounts on the exchange and trade ordinary cryptocurrency products and services.
Besides, banking institutions can sell and store Bitcoin in Germany.
The views and opinions expressed here are solely those of the author and should not be taken as financial advice either. Every investment and transactional activity involves risk, so you are advised to do your own research when making any trading, investment or financial decisions.
