Coronavirus and Another Opportunity to Get Into Cryptocurrencies

The global crisis unleashed by the Covid-19 coronavirus epidemic hit every aspect of an almost entirely globalized economy. The interdependence generated by this kind of international market, threaded across multiple countries and industries, turned into a logistical, industrial, and social nightmare. And the global financial market was no exception: between Monday the 9th and Thursday the 12th of March, Wall Street reported a total drop of 500 billion dollars. In a market where every investor rushed to burn their assets in exchange for cash, Bitcoin and other cryptocurrencies were no exception. But despite appearances, this opened an interesting possibility for those looking to join the crypto world.

Shares of the world's most important companies plummeted and investors rushed to sell in order to get cash in return, regardless of the level of losses incurred. The United States Federal Reserve announced it would inject 1.5 trillion dollars in credit over the next three months to contain the situation. Along the same lines, cryptocurrencies and Bitcoin in particular suffered a massive drop, with yesterday's being the most pronounced: on this Black Thursday, the leading cryptocurrency lost 50 percent of its value and hit a floor of 3,800 dollars. By the time this article was being closed, the coin had recovered somewhat and was trading in a range between 5,000 and 5,500 dollars.

First, the price is once again touching a floor like in April 2019, which opens a window for investors who wanted in but found the asset too expensive: just a month ago it was near 10,000 dollars. On the other hand, around May 18 of this year, the amount of bitcoins given as a reward to miners will be cut in half, going from 12.5 to 6.25 per mined block. This event, known as the halving, has happened before, and the result was, in the long run, a bull market. Therefore, this combination of a low price plus an upcoming halving could be a good opportunity for those who want to try buying Bitcoin, wait a few months, and sell in a bullish scenario. It is worth remembering that each bitcoin can be divided into 100 million parts, so you can buy almost any amount of the cryptocurrency -- you don't need to buy a whole one.

How to buy cryptocurrencies online

The easiest way to buy cryptocurrencies is through a broker, meaning one of the buy-sell platforms that work like digital currency exchanges, except instead of selling dollars, euros, or reais, they sell cryptos. In Argentina, there are three reliable services: Ripio, Satoshi Tango, and Bitex. To use them you must be over 18, register, and verify your identity through a process that includes taking a selfie, uploading images of your national ID, and verifying an email and a phone number. The registration process can take up to 48 hours.

Once your profile is verified, you need to load money into your account via bank transfer or MercadoPago, or in cash at bill payment locations like RapiPago or PagoFacil. Ripio offers Bitcoin, Ether, and Dai for sale; Satoshi Tango has Bitcoin, Bitcoin Cash, Ether, and Litecoin; and Bitex only Bitcoin. The minimum to operate is around $1,000 Argentine pesos. And these platforms also work as wallets, which allows you to keep your crypto stored there if you don't have much experience or specific plans.

Although it is the easiest and fastest method, this system has two downsides. On one hand, you lose your anonymity, since all your personal information is required. On the other, there is a certain loss of control over your crypto by leaving it in the hands of third parties, although this is solved if you transfer them to your own wallet after purchasing. With crypto brokers, while we gain convenience when buying, we also lose some of the most attractive features of the crypto world.

Peer-to-peer crypto buying

The other method is to buy directly from another user. There is more than one way to find a seller. One of the most prominent is LocalBitcoins, a website that connects users who want to buy and sell so they can make the deal off-platform. Additionally, each user has a reputation system to avoid problems. For some time now, due to a regulatory change, LocalBitcoins requires its users to undergo a verification process. As a result, the platform lost its most interesting aspect.

Another way is to join Facebook groups like Bitcoin Argentina, which serves as a channel to bring together buyers and sellers. The group is private and has fairly strong moderation, and its users also use it as a channel for general cryptocurrency questions. On Telegram, there are also other groups like Crypto P2P.

While peer-to-peer buying and selling preserves anonymity and control over your cryptos, these transactions can be somewhat riskier since you don't know the counterparty or their intentions. That's why it's always recommended to conduct these kinds of transactions in public places, where robbery or anything like that is less likely to happen. Also, always keep in mind that Bitcoin transactions are irreversible and public, so once one is made, we have total certainty that the digital asset has become ours.

This article was originally published in Pagina/12 on March 13, 2020.