What to do with the profits? It's a pleasant question, rarely asked and not easy to answer. I want to reflect on following possibilities I'm thinking about: Further Crypto-Investment - Fiat-Savings at Crypto-Exchanges - Digitised Precious Metals.
I.) Ordinary Spending / Saving / Investing OR HODL ON
Maybe you would never sell any coin below the hundredfold profit of your original investment. Then this article will be a waste of time for the moment.
Of course you may realize the profits, send it to your bank account and buy shares / relax / invest in a new everyday life gadget. Everything is legitimate, but if an ordinary savings book seems too low level in your eyes, please read on.
II.) Further Crypto-Investment
The most obvious crypto-approach would be to search for an undervalued asset, that still promises to rise. Looking back on the big altcoin hype you would hardly have found such an asset then.
III.) Fiat-Savings at Crypto-Exchanges
A third idea: Kraken.com ist the second biggest Cryptocurrency Exchange (by average liquidity). Even if the fees are slightly higher compared to Binance, it offers flexible, off-chain staking of fiat-USD and fiat-EUR with an 2% and 1,5% APY. Interests are paid out twice a week, will be automatically added to staking ("Grow rewards: on") and then generate compound interests. That's clearly more than you would get from every savings book.
Recently Binance.com enabled also EUR-savings at a changing APY of around 2 to 2,5% APY. Binance enables EUR staking at 2.5% APY and BNB Vault
IV.) Digitised Precious Metals
Maybe you don't trust the stability of fiat-currencies or simply want to diversify your funds a little bit more. Bitpanda offers four digitised precious metals: gold, silver, platinum and palladium.
All of them are physically backed, insured, stored in a Suisse vault and tokenised depictedly in your Bitpanda portfolio.
There are two aspects to consider:
1.) In the European Union there is no VAT for buying gold, but there will apply VAT for buying other metals. Trading via Binance will avoid the Value Added Tax, as it is held in a duty free storage. In return the following percentage fees apply additionally:
Gold: Taker 0,5%, Maker 1%
Silver: Taker 2,5%, Maker 2%
Platinum: Taker 2,5%, Maker 2%
Palladium: Taker 2,2%, Maker 1,8%
Note: These fees apply additionally to the regular 1,49% trading fees. If you pay the regular trading fees with BEST, the bitpanda ecosystem token, the basic percentage will be reduced to 1,12% and then increased by the surcharge for the metal.
Annotation: Unfortunately, the precious metals are not currently traded on Bitpanda Pro, they plan to implement it in the future, which would make it more cost effective.
2.) Storage fees and insurances per week apply if you own more than 20g / 0,705479oz of each, gold (then 0,0125%), platinum (then 0,025%), palladium (then 0,025%), and more than 200g / 7,05479oz of silver (then 0,025%).
"When you buy gold on Bitpanda, you are the real owner of the gold or precious metal. We are simply the platform that offers the service of buying gold with ultra low fees." Bitpanda Metals
>> Conclusion: That means you can actually invest around 2980 EUR to get precious metals worth 2865 EUR without further paying storage fees and insurance costs, which represents costs of 115 EUR and an average one time cost rate of around 3,85%.
If you would immediately sell your metals you would again face fees of 77 EUR and approximately again 2,67% of the value of your assets.
Metals at Bitpanda are surely no assets for frequent trading.
I calculated proportionally and rounded generously to whole numbers, prices are from 3rd of November. Assumptions made:
A) You registered for Bitpanda and got allready a BEST reward to pay the cheaper regular trading fee of 1,12%.
B) You payed with a crypto-currency. Comment: Unfortunately the fees for Bitpanda Swap are not really transparent, it's less than the fee for selling a coin and buying another separately. Nevertheless I assumed the more expensive case that you first sell crypto for fiat and then by gold for fiat, meaning that you paid twice the regular trading fee and once the additional metal fee.)
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>>>> My personal conclusion:
I tend to stake my then realized profits in fiat-staking at kraken.com oder binance.com, until the opportunity for further investments presents itself.
I am also inclined to get the 260g of precious metals that are free of storage fees and insurance costs on Bitpanda, even at the cost of actually 115 EUR for buying them. It will be a long term investment and I consider it as a playfull, small, Suiss Duckburg Money Bin. It may seem old-fashioned but I like the entanglement of tokens and raw materials and I strongly support Bitpanda's lowering of inhibitions between crypto and metal sales.
If I could raise your interest in the Bitpanda approach of shrinking digital assets and coins, do me a favor and register for Bitpanda using my referral link: https://www.bitpanda.com/?ref=281561648977652739
After your KYC-verification, a fiat deposit of at least 25 EUR (or aequivalent in USD, CHF, GBP or TRY) and a trade with this sum, -> you and I will get 10 EUR each to our EUR wallet.
I would be glad if my ideas got you thinking and we both got some benefit from it!
