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Crypto: the keys to investing without the risk of losing it all

Risky, Bitcoin? The latest crypto converts are in a good position to find out: their portfolio lost 15% of its value between January and early April alone… just as much as those betting on the CAC 40. It must be said that the market as there is nothing balanced in associated with this digital token. According to a study by the NBER (National Bureau of Economic Research), 27% of the 19 million bitcoins currently in circulation are actually held by… 0.01% of wallets. The famous “whales”, who can make and break paths.

To make matters worse, the first capitalization of the sector has now been joined by almost 15,000 other virtual currencies, such as Ethereum or Solana. “95% of them are empty shells and not interested,” warns Paul Bourceret, commercial director of broker Coinhouse. Like Shiba Inu, without any technological foundations, but which at the end of February was worth almost 12 billion euros in total. Finally, I’m not sure that bitcoin is a safe haven, or can even protect your savings from inflation: in recent weeks its price has really fallen, following the main US technology stocks, listed on the Nasdaq.

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But to continue on our way would be to quickly forget the enormous potential of this virtual currency market, which 8% of the French have already tested, according to a study by KPMG for Adan (Association for the Development of Digital Assets). And which is now attracting even institutional investors. On February 28 alone, the major cryptocurrency saw a jump of $5,000. “From the very beginning, the investor who kept his bitcoins for at least three years was necessarily the winner,” adds Paul Bourceret.

Even if the cryptocurrency, created in 2009, has a longer history than its peers, it is better to play it safe. “You should only invest money you don’t need,” warns Stanislas Barthelemy, a consultant at Blockchain Partner, a subsidiary of KPMG. And within the total limit of 5 to 10% of your assets. Also be sure to diversify your bet by buying other types of digital tokens.

Since an investment in a cryptocurrency is an investment in the value of its blockchain, this technology that allows, through a dematerialized chain of blocks, the storage and transfer of information in a transparent, secure and decentralized manner. However, like any innovation, this one may eventually lose momentum, or even be replaced by another.


Crypto-assets: the sector is booming, but its development is still constrained

Take Ethereum, which has become the main competitor to bitcoin, with 10 to 20% of the total capitalization of cryptocurrencies. Created in 2015, it relies like Bitcoin on a “proof of work” system, which drives computers around the world to run at full speed to first solve a complex mathematical equation, allowing transactions to be verified and the cryptocurrency reward to be collected.

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In the process of saturation, this protocol now allows only slow and expensive exchanges… It is, of course, being modernized, but it faces competition from Solana, a blockchain that relies on “proof of stake”, where only the users with the most tokens win the right to validate transactions. Much faster and cheaper, this protocol is now liked by many developers. And Solana, at the end of February, was the only cryptocurrency that was on the rise in our panel, for six months, as well as for more than a year.

Additionally, don’t hesitate to use techniques that are likely to limit the extreme variations of these different tokens, sometimes during the same day. “For example, by investing over time, small amounts every month,” advises Stanislas Barthelemi. Also look at the “stablecoin” side, these cryptocurrencies pegged to physical currencies, such as the dollar. This is the case of Tether. In the event of a bitcoin crash, you will be able to transfer your capital to these tokens without having to recover all of your capital. And then take only the foreign exchange risk between the reference currency and the euro.


A significant part of the French has already invested in cryptocurrencies

Finally, it will be necessary to choose the right mediator. Priority in this area is given to brokers that have received the status of PSAN (service provider for digital assets) from the AMF (Financial Markets Authority), such as StackinSat, Bitstack or the pioneer of the sector, Coinhouse. This mark guarantees that the “honesty and competence” of the manager has been verified, and that the site complies with laws related to the fight against money laundering and terrorist financing.

On the other hand, only the most knowledgeable will venture into specialized exchange platforms, such as Paymium and Bitpanda, registered with the AMF in France, or Coinbase and Kraken, this time regulated in the United States. And don’t forget to dissect all the costs: this is how Coinhouse charges 2.99% to fund an account by transfer, but 3.49% when using a bank card.

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