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The fundamentals of crypto investing - Newsletter #20
Strategy, risks and taxation: discover the fundamentals of crypto investing!
Strategy, risks and taxation: discover the fundamentals of crypto investing! 💁🏻♂️
Welcome to the new issue of the Ambrosia Newsletter. We meet again to review the crypto news.
If you want to follow our adventures day by day, go to Linkedin 🔔
Still not on our waiting list?
As you know, the launch of our mobile app is coming very soon. It will be the first platform dedicated to new crypto investors!
What will you find there? A 100% personalized support by one of our crypto experts as well as an exposure to ultra diversified asset baskets for a headache-free investment.
Are you interested? Then sign up quickly on our waiting list to be among the first to benefit from our Crypto Baskets.
Is the worst behind us?
The last few months have probably been the worst we've seen since the history of cryptocurrencies began:
❌ Terra Luna's explosion and its stablecoin
❌ Bankruptcy of the Celsius platform
❌ Three Arrows Capital management fund bankruptcy filing
❌ Descent into hell of the world's 2nd largest exchange FTX
❌ Capitulation of lending company Genesis
❌ Bitcoin's fall to $15,000, a 78% drop from its ATH
All these events created a big panic movement; but above all a crisis of confidence... Many investors sold off their crypto, causing a sharp drop in their value.
The sector can now rebuild itself, with solid, trustworthy players and regulators who are willing to act to protect investors.
And Ambrosia intends to be part of it!
5 golden rules to manage your crypto portfolio
1️⃣ Select assets according to your expectations, your objectives and your risk appetite. Don't copy your friend's portfolio as he or she most likely has a totally different investor profile than you;
2️⃣ Try to think long-term for greater peace of mind. No need to check your crypto portfolio several times a day because you are assuming that you are in it for the long haul;
3️⃣ Keep a certain amount of your capital in euros or stablecoin. It is important to always have cash available in order to seize market opportunities;
4️⃣ Do not try to diversify too much. The risk would be to no longer be able to follow your investments and the relevance of the assets in which you are positioned;
5️⃣ Compare the performance of your portfolio to other benchmarks over a given period such as gold or the S&P 500 to measure the effectiveness of your investment choices and adjust them if necessary.
And for those who don't want to bother, there is also Ambrosia's Crypto Baskets.
Which crypto tax system in France and in Europe?
Recently, a new tax regime has been put in place in France concerning crypto capital gains.
Gains made and converted into fiat currency are not taxable below 305 € per year. Above this amount, the taxpayer can choose between:
- the single flat-rate withholding tax (an overall rate of 30%, i.e. 12.8% for income tax and 17.2% for social security levies) ;
- the progressive income tax scale.
While taxation on crypto is often considered too harsh in France, it is far from being the worst in Europe. It can amount in other countries like Belgium or even Denmark to 50% 😬
Nevertheless, a study by HelloSafe indicates that 6 countries in the European Union do not tax capital gains on digital assets:
The taxation of cryptocurrencies is thus very disparate in Europe. Still, we can note to date an average tax rate of 15.4% on our continent.
Given that it is still a young ecosystem and often not well understood, the crypto taxation will have to evolve a lot in the coming years
Why do DCA ?
Making a financial investment takes time. Especially on an asset class like crypto! That's why DCA is relevant!
DCA (Dollar Cost Average) is a strategy that involves buying one or more assets for the same amount of money at regular, pre-scheduled intervals 🦾
This investment strategy aims to reduce the impact of volatility on the investment and therefore offer greater peace of mind. It is the best way to minimize risk!
✅ An investor applies a DCA: €1000 per month of bitcoins for 12 months. So he never buys too low, nor too high. He has an average price over the whole year.
❌ On the other hand, if he had bought €12,000 worth of bitcoins in one go, he would not have been safe from a crash in the following days. His investment could then have lost 50% of its value...
That's why at Ambrosia, we allow the implementation of a DCA on our Crypto Baskets. Weekly, fortnightly or monthly: the choice is yours!
More and more women are embracing crypto
Since Bitcoin's inception, the crypto ecosystem has always been very male-dominated.
Why? Simply because crypto is the combination of two worlds that many think are reserved for men, namely finance and technology 🤦🏼♂️
But recently, things seem to be changing. According to a study conducted by Etoro, women investors are more interested in digital currencies.
Among those who make various financial investments, 34% have already bought crypto. An increase of 10% compared to last year!
That's it for today! See you very soon 😁
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