HOW TO BUY BITCOIN IN FAROE ISLANDS
Bitcoin is the first cryptocurrency and one of international investors' most sought after financial assets. In this article, we write about a few aspects to consider when buying Bitcoin in Faroe Islands.
Top Crypto wallets and Trading Platforms available to residents in Faroe Islands
Do you need an introduction to Bitcoin?
What can we possibly say about Bitcoin that was not said already? Therefore, we will only introduce its main features:
Bitcoin is independent because no country, bank, or financial institution can control or manipulate the network containing Bitcoin. In other words, investors can buy, sell, send to external e-wallets, and receive bitcoins without relying on anyone.
Bitcoin is decentralised because it allows anyone to send money quickly and cheaply, at any time and to anyone in the world. No one can impose restrictions on who can participate and who cannot.
Bitcoin is public because everyone can see the transactions in the ledger (similar to a log), but at the same time, it is anonymous because it is not possible to link the transactions to the people who made them.
How to Buy Bitcoin in Faroe Islands?
Sign up with an Application that offers the ability to exchange Bitcoin. These applications are called Brokers, which are neither more nor less than intermediaries between buyers and sellers. In the following paragraphs, we will discuss some options for local investors.
Open an investment account with the chosen broker. The process of opening an account at the broker will be online, and you only need to upload your ID or passport and proof of address through the App.
After opening the account, you deposit money. You may use a credit card, prepaid card, or e-wallet to fulfil this.
Choose the exact time you want to buy Bitcoin, open the App, seek Bitcoin within it, and click Buy. We say 'the moment you want to buy because Bitcoin is highly volatile, meaning that prices vary greatly. Brokers Apps usually have well-designed user interfaces developed to facilitate the process.
Once the transaction is fulfilled, the broker issues proof of purchase and collects a commission. Brokers charge commissions through the spread, which is the difference between the buying and selling prices. That is why it's key to check the applications' spreads and that they are low.
2 (Very Different) Ways to Buy and Trade Bitcoin
There are two general ways to invest in Bitcoin: buy real Bitcoin or invest in Bitcoin through CFDs (a financial derivative product). The main difference between these two options is that you own the real cryptocurrency in the first case, while in the second case, you do not own it, but instead, you use a financial derivative to speculate on Bitcoin's short-term price. Therefore, before investing, you should thoroughly analyse the different Brokers' differences, choose the one that best suits your objectives, and explore their commission structure and security measures. At the top, we have displayed the best ones available to local clients.
Unlike a regular wallet, which can hold actual cash, crypto wallets technically do not store your crypto. Instead, your holdings live on the blockchain and can only be accessed using a private key. Your keys prove your ownership of your digital money and allow you to make transactions. If you lose your private keys, you lose access to your money. That's why it's essential to keep your hardware wallet safe or use a trusted wallet provider.
Crypto wallets keep your private keys – the passwords that give you access to your cryptocurrencies – safe and accessible, allowing you to send and receive Bitcoin tokens (or fractions of Bitcoin). They come in many forms, from hardware that looks like a USB stick to mobile apps like Binance Wallet, making using crypto as easy as shopping with a credit card online.
Deposit or Buy Bitcoin with Credit Card with Binance in Faroe Islands
CFD Platforms That Allow Bitcoin Trading
As mentioned previously, although CFD platforms allow you to speculate on the price of Bitcoin, that is, to buy derivatives and wait for the price to rise to liquidate the position for profit, investors do not own the cryptocurrency. Therefore, on the top list of platforms, you may find some of the best available to locals.
What is Bitcoin's price?
Bitcoin's price has grown exponentially since its inception in 2008. Here is a list of some significant milestones:
Before March 2010: Bitcoin was worthless, there were no markets to trade in, and virtually no demand from the general public. A German user called "SmokeTooMuch" offered 10,000 Bitcoin at $ 50… There were no buyers. As of October 2020 (~ USD 11,400), that amount of Bitcoins is worth 114 million dollars!
May 2010: Bitcoin starts being accepted in exchange for real-life goods. A user in the US trades 10,000 Bitcoins for two pizzas; each Bitcoin was worth less than 1 cent (Although it's something).
July 2010: 6 days after this, Bitcoin's price rises 900% to settle at 8 cents. In other words, the guy who sold the two pizzas made $ 800 with his Bitcoin. Why did this happen? Because the word spread that you could start buying goods and services with Bitcoin, that is, it had officially become a bargaining chip.
Early 2011: Bitcoin reaches 1 to 1 parity with the US Dollar.
June 2011: First Bitcoin "bubble" reaches $ 31 but falls again to $ 2 towards the end of that year (However, its price represents 100% growth compared to the value of early 2011).
December 2012: 13 Dollars.
December 2013: Between 600 and 1,000 Dollars.
Beginning of 2014: Begins a period of stability in the price of Bitcoin. Over the next few years, it will range from $ 300 to $ 1200.
May 2017: The price "explosion" of Bitcoin's price starts when it reaches $ 2,000.
September 2017: $ 5,000
December 2017: $ 19,783, reaches its maximum value, being 1,824% more valuable than at the beginning of the year.
2018: Starts to go down and ends the year at the price of $ 3,000.
June 2020: It is close at $ 10,000 again.
January 2021: It raises to $ 40,000.
February 2021: Peaks at $ 57,000.
Nov 2021: Peaks again over $ 60,000.
2022: Drops back to below $40,000.
And so it goes on and on.
As you can see, Bitcoin had shown massive volatility with a price close to zero when it was launched and reached high and rising prices if we look at the intertemporal curve. This is why it is essential to stay informed and check the updated price if you want to invest in Bitcoin.
What is the minimum amount to invest in Bitcoin?
Many people ask about the minimum amount to invest in Cryptocurrencies. The answer is that it does not require a large amount of capital to start.
When you are just starting and hear that the price of Bitcoin soars through the roof, you might be compelled to think that the minimum to invest is the equivalent of one Bitcoin: in other words, $ 40,000 to $50,000. However, that claim is wrong: With Crypto platforms, you may buy a fraction of a coin, for example, 0.0001 Bitcoins (a few Dollars).
Is Crypto trading a safe investment?
Cryptocurrency, like any other investment, has risks and benefits. However, in particular, trading cryptocurrencies is one of the riskier activities in the financial world.
Cryptocurrencies are global, which means they have the same worth in all countries and are not subject to exchange rates.
Investing in cryptocurrency assets seems to have the potential to be incredibly lucrative.
The growing rate of adoption indicates that the sector is maturing.
Cryptocurrencies are risky since they are highly volatile and vulnerable to runs and market collapses.
Authorities may potentially tackle the whole crypto business, particularly if countries consider cryptocurrency a danger rather than a cutting-edge technology. Examples of this can be found worldwide.
Cryptocurrency exchanges are more vulnerable to hacking than stock exchanges.
How can I spend my cryptos in the real world?
Although highly popular, cryptos may now be spent in a broad range of online and offline venues still. While not many establishments accept them, the adoption as a money transfer mechanism is growing each year, which will push more businesses to allow them. For example, think about Tesla's proposal to enable payment in cryptos for their EVs.
You can use it to top up your Microsoft account, buy gift cards online for retailers like Amazon, or even pay for your coffee.
Still, you can always withdraw your money: Just convert your Bitcoin holding to cash at a Bitcoin ATM or through a Bitcoin exchange.
Tips for New Crypto Traders
People who are successful in buying and selling Cryptocurrencies use security measures to increase the probability of making a profit when trading. These revolve around minimizing the trading platforms' commissions and operating expenses. However, other trading good practices are a mere matter of attitude, self-control, and common sense. Following are some essential tips for trading cryptos.
Use Stop Loss Orders: Rule # 1: Use Stop Loss orders. Rule # 2: Use Stop Loss orders. Rule # 3: Use Stop Loss orders. This is the best recommendation that any Crypto investor can get, which means that you should limit the potential to lose money using this type of order.
Get started with the DEMO Platform: Use a DEMO platform, which most trading platforms offer.
Learn about the cryptocurrency you want to buy and trade and how and why its price fluctuates: Understand trading transactions, learn, study both the basic concepts of Blockchain and Cryptocurrencies; in other words, do not start investing without knowing what you are about to invest in.
Analyze the price swings: Carry out your analysis. Some of your acquaintances will tell you about the amount of money they have made buying Bitcoins (or investing in any other financial instrument). However, if a trader made money once, it does not imply that repeating the past performance is possible.
Develop your Investment Strategy: For example, when will you open a buy order? When to close it? Design a scenario chart, invest based on it, and adjust it as the strategy gets tested.
Do not Run After the Money: It is essential to make sure you do not close (or open) your trades early. Staying put with your investment strategy is critical. When investors let their emotions take over their trading activity, they usually make a profit or a loss slightly higher than the costs per transaction. Trading frequently in this way, a method also known as scalping, will tend to lead to a loss of your total performance. At the opposite extreme, swing trading attempts to profit in a market over a period that ranges from one overnight hold to several weeks, which minimizes the number of times you pay the spread.
Leverage in Cryptocurrencies Should Work For You: Using a higher level of leverage allows the investor to invest more than the actual cash deposit. So leverage is an exciting capacity that platforms provide. Yet, the investor must take it responsibly because leverage multiplies profits and losses and might result in losing your account's total balance.
There will be 'Not so happy' days: When a person starts trading financial instruments, there will be days when making money will seem easy. However, the important thing is to keep in mind that there will be days when the investment strategy will not work, and you will lose money. Therefore, it is necessary to maintain capital in the account to sustain your trades over time. Never trade cryptos with the cash you need and whether you can afford to take a high risk of losing money.
Choose an App that explicitly specifies the transaction costs: Consider the expenses and costs of overnight financing, as well as the spread when choosing a provider. Some trading apps sing their praises about tight spreads, but they charge incredibly high overnight financing commissions, for example.
Choose a Crypto App that offers you a proper trading execution: By 'trading execution', we mean the time spent between the moment that you click on "Buy" and the moment where your order is executed. From an investing point of view, a poor trading execution is equivalent, economically, to an additional commission. For example, suppose your trading app offers low commissions but cannot fill your order fast and securely. In that case, you should consider choosing another one.
Choose a trading style that reduces your costs: No need to explain further, correct?
Be disciplined: When you want to carry out a trade, you must be clear on: Why are you opening a position? What level of profit do you expect to get? (be realistic) And most importantly: When will you accept the losses if the coin's price goes the other way (Remember Tip # 1)?