Taking advantage of the rise in cryptocurrencies within a familiar, secure environment is now possible. Since July, Swissquote offers clients the opportunity to invest in bitcoin via its trading platform. Céline Bonola, in charge of implementing this service, discusses the advantages.
Who is this new offer targeted towards?
Our platform is for any investor who wants to exchange euros or dollars for bitcoins, and vice versa. All that’s needed is a trading account with Swissquote. Creating one only takes a few minutes. Given the high volatility of the price of bitcoin and its current upwards trend, investing in the currency has a clear speculative interest. It’s also an interesting, innovative way to diversify a portfolio.
How does Swissquote’s platform stand out from other competing solutions?
We’re the first online bank in Europe to offer bitcoin investing. Our platform was duly authorised by the Swiss Financial Market Supervisory Authority (FINMA). As a Swiss bank, we offer all the associated warranties and security to our clients, who can access the service in just a few clicks. Until now, many investors have been interested in cryptocurrencies but were hesitant to begin investing, since the majority of players on this market aren’t very well known and often require transferring funds to a foreign account.
To what extent is it risky to invest in bitcoin?
The risk is the high volatility of this currency. But that’s what makes it an attractive investment. When we began this project in May 2015, one bitcoin was worth approximately $400, compared with close to $4,000 now. Clients can purchase bitcoins with euros or dollars through their trading account. It’s just as easy as buying any other currency. However, clients do not benefit from leverage. So they do not risk losing more than they invested.
What is the minimum investment amount to take part in this offer?
The minimum amount is $5 or €5. We also set a maximum investment amount at $100,000 / €100,000. Fees are charged based on the transaction amount, between 0.5% and 1% depending on the total amount (ed. note: see table opposite). Please note that we do not offer a “wallet” on this platform. So clients cannot make any transfers or purchases using bitcoin.
Mainly for security reasons. Swissquote would have to be able to provide 100% secure protection for the wallet. Someone could obtain the key and do with it what they wish. The wallet concept could also have potential risks in terms of money laundering.
How did Swissquote implement this platform?
We collaborated with Bitstamp, a Luxembourg company that has solid expertise in virtual currency and has specialised in bitcoin trading since 2011. It is the only bitcoin exchange that has a license from the European Union. Bitstamp provides us with pricing data and carries out the transactions that clients make on our platform.
Will Swissquote be offering other virtual currencies in the future, such as Etherum or Litecoin?
Yes, we’re working on it. Other cryptocurrencies will be available soon.
Bitcoin in brief
The term “bitcoin” is a compound word meaning “digital money”. This virtual currency is neither printed nor minted and is not controlled by any institution. As a result, bitcoins are not subject to the regulations of a central bank and do not depend on monetary policies or interest rates. Their value is based solely on supply and demand. Bitcoins were worth close to nothing in 2009, but their popularity has grown significantly since then. As of 15 August, one bitcoin was worth $4,200, far exceeding the price of an ounce of gold.