How can I invest in cryptocurrencies? An overview of the possibilities

Investing in cryptocurrencies is becoming increasingly popular, but can appear complex at first glance. There are now various options that offer your own advantages and risks.

Cryptocurrencies are digital assets that differ from traditional currencies by not being controlled by banks or governments. They are based on blockchain technology, a decentralized network that stores transactions in encrypted blocks. These data blocks are unchangeable and are stored on the servers of all network participants, which eliminates the need for central authority.

How can you invest in cryptocurrencies?

There are several ways to invest in cryptocurrencies, including decentralized stock exchanges, crypto brokers and regulated crypto exchanges. Banks are also increasingly offering services that enable the purchase and custody of cryptocurrencies. The choice of the right platform depends on your personal preferences and the desired measure of control over your investments.

Crypto broker: a user-friendly entry

Crypto brokers are platforms that act as an intermediary between investors and the cryptocurrency markets. They offer a user -friendly interface that is particularly attractive for beginners. When choosing a crypto broker, you should pay attention to the safety, fee structure and the supported cryptocurrencies. An account with a broker is usually given by providing personal data and an identity examination (English = know your customer, KYC) opened.

Despite the simple usability of crypto brokers, there are risks, including:

• Safe and loss of private keys: In many cases, you have to keep your cryptocurrencies in the broker's wallet. This means that you do not have complete control over your private keys. This can be dangerous if the broker is hacked or reports bankruptcy.
• Fees: Brokers often charge fees that can have a negative impact on their returns.

Purchase and trade on crypto exchanges

Crypto exchanges work similarly to traditional stock exchanges and enable users to buy and sell cryptocurrencies directly. The price is determined by supply and demand. Since crypto exchanges often have a high trading volume, transactions can usually be carried out quickly. For the trade you have to create an account and set up a digital wallet.

Trading over crypto exchanges is also associated with risks, such as:

• Technical complexity: The use of a crypto exchange can be challenging for beginners because it requires technical knowledge.
• Safe custody: There are two ways to keep cryptocurrencies: either in your own wallet or on the stock exchange. Both options pose risks, especially with regard to hacks or the loss of access data.
• Regulatory risk: Crypto exchanges are subject to different regulatory conditions in many countries, which carries the risk that a stock exchange is legally restricted or closed.

Cryptocurrencies at banks: a new option

In view of the growth of the crypto market, more and more banks are offering their customers the opportunity to invest in cryptocurrencies. In Switzerland in particular, investors benefit from high security standards and a robust regulatory framework. Banks not only offer the purchase and custody of cryptocurrencies, but also tracker certificates and crypto ETPs (Exchange Traded Products) that enable investors to benefit from the price movements of digital currencies without having to invest directly in the currencies.

Swiss banks can offer the following advantages:

• Security and trust: Swiss banks offer high security standards and comprehensive protection for digital assets.
• Regulation: Switzerland has clear regulatory requirements for financial service providers, which offers additional protection for crypto investors.
• Comfort: The integration of crypto investments into existing banking services enables simple management of all financial activities in one place.

Conclusion: careful research is crucial

Before you invest in cryptocurrencies, you should find out more about the various options. Any kind of crypto investment-be it through an exchange, a broker or a bank-brings specific risks and opportunities. Make sure to make your investments only in the mass of how you can cope with a possible loss. Cryptocurrencies are volatile and the underlying technology is complex. A well-founded understanding of the digital currencies and the underlying blockchain technology is crucial to make sound decisions.