The Crypto Buying Mirage: Are You Investing in the Asset or Just Its Value? The Key Difference

The most common way to invest in cryptocurrencies is to buy the actual digital asset, store it in your wallet, and own it. However, in the market, there are services that allow you to "invest" in cryptocurrencies in another way: by using a card or account balance, where the value is updated based on the cryptocurrency's price.

At first glance, it might seem the same as buying cryptocurrencies in the traditional way, but there is a crucial difference that can be a mirage if not well understood.

What is 'Value Trading' in Cryptocurrencies?

This is a financial service where you, the customer, can invest in the value of a cryptocurrency, but without owning the cryptocurrency itself.

The process works like this:

1. You decide to invest, for example, 100 Euros in Bitcoin.

2. The service debits 100 Euros from your account or card balance.

3. If the price of Bitcoin goes up by 10%, the value of your "investment" becomes 110 Euros, and if it goes down, the value also decreases.

4. When you decide to sell, the service returns the final value of your investment to your account balance, again in Euros.

In this model, the user never owns a cryptocurrency. There is no crypto wallet, no private key, and no assets on the blockchain under your control. You simply have a contract or a digital record with the company that states your money is "worth" the same as a quantity of a cryptocurrency.

Advantages: The Simplicity of Investing

These types of "value trading" services have their appeal, especially for beginners:

• Easy to use: You don't need to understand what a cryptocurrency wallet is, a seed phrase, a blockchain network, or how to make transactions.

• Quick Access: You invest and sell using a familiar interface, like a banking or stock app.

• No Technical Complications: You don't have to worry about managing private keys, network fees, or the risks of sending to a wrong address.

Disadvantages: What You Lose by Not Having True Ownership

But the big question is: what do you lose by not being the true owner of the asset? The answer is simple: you lose the autonomy and power that self-custody gives you.

• You Are Not the Owner: If you do not own the private keys, you do not own the cryptocurrencies. You cannot send them to another wallet, use them to pay merchants, or make donations.

• Total Dependence on the Platform: Your money is in the hands of a company. If the company has a problem (fraud, a hack, or bankruptcy), your funds could be at risk. You are bound by its rules and operating hours.

• You Don't Participate in the Ecosystem: By not having the cryptocurrencies, you cannot use them in the exciting world of Decentralized Finance (DeFi), nor can you stake them or interact with NFTs.

The Bitnovo Model: True Ownership and Self-Custody

At Bitnovo, our philosophy is very different. When you buy cryptocurrencies from us, what you receive is the actual digital asset.

• We provide you with a self-custody wallet in our app, where you have total control over your private keys.

• When you buy cryptocurrencies, we send them directly to the address of that wallet or to one of your choice.

• From that moment on, you are the true owner.

Understanding this distinction is fundamental. "Value trading" may seem like a shortcut, but the real ownership of cryptocurrencies gives you a power and freedom that no other service can offer. At Bitnovo, we offer you the door to be a true owner in the crypto world.