The media has been quiet about cryptocurrencies for a while, but digital currencies such as Bitcoin, Litecoin, and Ripple have been in the news more often in recent weeks.
That is not surprising, because the prices of Bitcoin and other cryptocurrencies have been on the rise lately. And that means that there are plenty of opportunities for investors to take advantage of the favorable price. But is it wise as an entrepreneur to put money in the crypto market? As a freelancer, can you safely earn money from cryptocurrencies? In this article, we will take a closer look at all the advantages and disadvantages that investing in cryptocurrencies has for entrepreneurs.
Cryptocurrencies are understood to mean digital coins that are stored in a digital wallet and can be purchased, sold and used as a means of payment. The cryptos are a decentralized means of payment and are traded via digital encryptions, which cannot be cracked and guarantee optimal security. The technology behind cryptocurrencies is called blockchain: a digital register in which the codes are stored and checks take place. Numerous computers are used worldwide for this, which regulate the process of encoding, also known as mining. Cryptocurrencies, such as the Dogecoin, can be bought online from a crypto broker or, so they are often called, a crypto exchange. You often pay a small percentage of commission for this. By waiting for a rising price and then selling your cryptos, you can make nice profits.
Investing in cryptocurrencies such as the Ripple XRP can give you good returns as an entrepreneur or freelancer. By investing smartly and buying or selling digital coins at the right times, you can save a pension yourself. Another nice thing about investing in cryptos is that it is very easy to start with. By choosing a reliable crypto exchange, you can quickly and easily buy coins and store them in your wallet. Your cryptos are then safely stored and in fact you don’t have to worry about it anymore. If the price is low, you can buy additional coins. At high prices you can cash out by selling (a part of) your cryptos. How this works is self-explanatory when you sign up with a crypto broker.
However, do realize that since 2018, everyone has to pay tax on cryptocurrencies, as is the case in the Netherlands. Check for yourself if this is the case in the European country you live in as well. As a self-employed person you can have up to 30,000 euros tax-free capital, but above that, tax must be paid on your capital. Tax is paid in box 3 on cryptos via the tax authorities. It is important to know that the amount on which tax must be paid is determined on the basis of for example the Nano crypto prices and value of your investment on January 1. If the rates on that date are high, then as a self-employed person you pay more tax. If the price is low, you are lucky and you pay less tax. It is smart to take this into account.
