Trading in cryptocurrencies can be done through crypto exchanges or by investing in exchange-traded funds (ETFs) and certificates that have exposure to cryptocurrencies. However, it is crucial to trade with entities that are at least registered with the Swedish Financial Supervisory Authority. Some of the registered crypto exchanges in Sweden include Saffelo, Trijo, and Btcx. It is important to note that registered companies do not undergo the same level of oversight from the Financial Supervisory Authority as licensed companies.
Arvid Börje Ramberg, the CEO of NGM-listed Greenmerc, which operates the crypto exchange Trijo, advises traders to use Swedish entities registered with the Financial Supervisory Authority. He emphasizes the importance of choosing companies with a customer service representative one can contact. Ramberg warns against trusting individuals who make lofty promises, urging caution and due diligence in selecting a trading platform.
When it comes to trading cryptocurrencies, one must utilize a digital wallet instead of an investment savings account (ISK). All cryptocurrencies are traded through crypto exchanges and stored in a digital wallet. It is also possible to withdraw the cryptocurrency and store it in a self-hosted wallet, which is essentially an offline wallet. Understanding how to protect the wallet and access it is crucial, as it involves private and public keys. The public key functions as a bank account number, while the private key is akin to a PIN code, used to authorize transactions and secure assets.
Selecting which cryptocurrency to purchase is the next step in the trading process. Bitcoin, the most popular cryptocurrency, has surged by 12,500% over the past decade. However, past performance is not indicative of future results, as Bitcoin has experienced significant value fluctuations, including a 50% drop at times. Emelie Moritz, the CEO of Safello, acknowledges the volatility in the market but believes that Bitcoin is increasingly being recognized as a digital store of value.
Arvid Börje Ramberg asserts that Bitcoin is the most sensible option for beginners, highlighting its proven track record compared to other cryptocurrencies. He draws a parallel between Bitcoin and established investments like Investor, contrasting them with newer cryptocurrencies akin to start-ups.
Apart from Bitcoin, there is a vast array of cryptocurrencies, including various tokens, utility tokens, meme coins, and stablecoins pegged to government-issued currencies or other assets. Navigating this landscape can be overwhelming, leading experts to recommend investing in what one understands and conducting thorough research rather than chasing quick profits.
In addition to trading on crypto exchanges, investors can explore alternative methods such as ETFs and certificates. These instruments offer exposure to cryptocurrencies without the need to hold the digital assets in a wallet. While this approach allows for investment within an ISK or capital insurance, it incurs annual management fees of up to 2.5%. Unlike trading on crypto exchanges, ETFs and certificates are limited to trading during exchange hours and may involve counterparty and credit risks.
One advantage of trading through ETFs and certificates is the ability to invest in a product that tracks the top ten cryptocurrencies, creating a diversified portfolio without the need to select individual assets. This approach simplifies the investment process and reduces the risk associated with concentrating on a single cryptocurrency.
When considering whether to enter the cryptocurrency market, experts recommend adopting a long-term perspective and regularly investing smaller amounts rather than attempting to time the market. While trading on crypto exchanges incurs fees based on trading volume, alternative platforms like Safello and Trijo offer different fee structures for transactions and withdrawals.
In conclusion, Arvid Börje Ramberg emphasizes the importance of educating oneself and viewing cryptocurrency trading as a long-term investment rather than a get-rich-quick scheme. By understanding the risks and complexities of the market, investors can make informed decisions that align with their financial goals.