When it comes to buying and selling cryptocurrencies in Europe, it was always a bit of a love-hate relationship right there. Europe and European, not only bring ‘classy’ as the first association, but also ‘strict’ and ‘regulated’, right?
Europe has begun liking crypto recently. If the USA market is about brave and bold individuals and startups, in Europe it’s more about financial institutions. And when Europe’s institutions started investing in bitcoin and other cryptocurrencies, the floodgates of crypto-adoption have opened.
News reported $1 trillion in transactions, hailing Europe as the new crypto capital of the world. At the same time, outrage over the carbon footprint of crypto-mining gave rise to many governments looking unfavorably to crypto mining operations feeling from China.
European Central Bank states on their ‘what’s bitcoin’ page that it is NOT a currency, that it’s a speculative asset. They warn that bitcoin is not backed by anyone or anything, that it’s not a safe investment, but also kind of recommend stablecoins and promote upcoming digital Euro as a good thing. That’s the love-hate thing right there, see?
Buying and selling cryptocurrencies
Considering that most of the countries in the Euro-zone view cryptocurrencies as assets, it’s good to know that when it comes to cryptocurrencies when we say “buying and selling” it means purchasing crypto with fiat currency.
What is a fiat currency? That’s GBP, EUR, USD, the currencies which a central bank issues and determines its value by a more or less arbitrary process. EUR is worth this much because the central bank said so.
This is important because when you are looking for crypto exchanges or other crypto services, like crypto savings accounts or decentralized finance apps, many of them provide crypto trading. Trading crypto usually refers to spot or margin trading. Swapping tokens is the phrase commonly used to the act of exchanging one cryptocurrency for another.
In other words, when you are looking to buy bitcoin, you have to check if your selected crypto exchange provides the service of depositing your fiat currency in exchange for bitcoin, or another cryptocurrency.
Crypto exchanges usually have three primary methods of buying bitcoin. The first one is through various bank transfer payment methods. The second one is by using a credit or debit card. The third method is through peer-to-peer (P2P) exchange.
Europe also features a lot of Bitcoin ATMs. It’s a physical ATM, e.g. a machine that allows you to buy bitcoin by inserting cash. Mind you, the fees are brutal, from 6-20% so it may not be the option you are looking for.
Peer-to-peer exchange is when a crypto exchange connects you to private traders willing to sell a portion of their bitcoin or other cryptocurrencies. Since those are private individuals, they accept a wide range of payment methods. Paypal, gift cards, altcoins, Payoneer, Western Union, etc. You name it, they have it.
The upside of P2P buying and selling is that the number of payment methods is staggering, so there are a lot of options not supported by crypto exchanges. The downside is that it can be scary sending your money to a stranger, basically trusting them to go through with the trade. Time delays can also be frustrating, as it causally takes days before the deal comes through.
Credit or debit cards are somewhere between Bitcoin ATM and P2P in being awful. It shouldn’t be like that, I know. You should just be able to pay for your crypto, just like you use a card for regular payments. But for some reason, crypto exchanges rarely, if ever, support credit card purchases natively on the platform.
Even the biggest crypto exchanges will send you to 3rd party intermediaries for credit card purchases. The payment channels are usually Btcdirect, Banxa, Simplex, or some other payments and compliance companies. The fees are significant, up to between 5% and 10%.
Some exchanges will allow credit card purchases with even higher fees, so bank transfers are the best way to go. When it comes to bank transfers, the benefit of buying bitcoin in Europe is that you have SEPA or SWIFT transfers as well as wire or bank transfers as an option to top up your crypto wallet with some bitcoin.
If you are in the Eurozone, always look for a crypto exchange accepting SEPA transfers. It’s a payment method for cross-border euro (EUR) transfers – fast and cheap, as it can’t cost more than a regular local transfer would. Of course, keep an eye on certain banks, mostly Italian or Spanish, that will still find a way to charge you a bit extra.
How to do it, then?
First of all, get your crypto wallet. Most crypto exchanges do have their own wallets, but you will want to have your own wallet address under your control. That’s easy just get Metamask, AtomicWallet, TrustWallet, or some other app.
The next step is to pick your crypto exchange. If you are a beginner, try Coinbase. It supports SEPA transfers, as well as cards. That’s the smoothest experience right there, and if you start feeling bold, you can always join their Coinbase Pro version.
With other exchanges, there are some caveats, like Coinmama allows you to easily buy bitcoin through SEPA transfer, but you can’t sell your bitcoin. Kraken is great, they accept SWIFT payments too, but their interface can be a bit hard on the beginners. Cryptal Exchange has transparent fees, a plethora of payment methods offered, but limited trading options.
If you just want to hold on to your crypto using it as a store of value, then maybe YouHodler is not a bad option, with a 4.8% interest rate, so your savings can work for you. But if you are looking to trade or invest, seek elsewhere.
Once you find the crypto exchange that suits your needs, go ahead and register. In Europe, privacy regulations and Know Your Customer (KYC) protocols are strict, so you will be asked to go through several layers of checks and verifications. It’s a good thing if you don’t mind exposing your data to the government and regulators.
Pick your payment method, fill out the required forms, and boom – you are a proud owner of some bitcoin bits!