Best Crypto Exchanges in Europe in 2022

The Greeks presumably developed the first system of weights and measurement for money. We are still arguing about the ideals of monetary value over two millennia later. These days, investors are increasingly turning to bitcoin as a store of wealth. But, what are the best places to buy and sell bitcoin and other cryptocurrencies in Europe?

The Best Cryptocurrency Exchanges in Europe

Amsterdam in 1989 was the birthplace of the first digital currency called DigiCash. The goal of DigiCash was to develop electronic money that was as untraceable as cash. While the project never really took off, DigiCash was a crucial early stage in the cryptocurrency evolution.

Fast forward to today, the financial landscape of digital money is changing at breakneck speed. From bitcoin, DeFi, NFTs, and earning interest with a crypto savings account, the options seem to be endless.

One thing that doesn’t change is the need for a safe and secure place to buy and sell digital currencies. The best cryptocurrency exchanges in Europe work similarly to online stock brokers. You can buy, sell, and store digital assets like bitcoin and ether just like you would with traditional investments.

Cryptocurrency in Europe

We tend to think of the United States and Eastern Asia as the cryptocurrency powerhouses of the world. However, Europe actually makes up 25% of crypto activity worldwide, making it the most active crypto region globally. Ethereum, stablecoins, and bitcoin remain the three most traded coins in Europe, with DeFi playing a significant role in the crypto space.

Large institutional investors from the UK, France, and Germany make up the bulk of this activity, but the number of retail investors is piling up rapidly. In 2021, the number of European citizens with crypto ownership in Europe exploded owing to the record-breaking bull market. Despite criticism from traditional financial institutions and government regulators, interest in digital assets doesn’t seem to be stopping any time soon.

  • Important: Investing in cryptocurrencies is considered highly risky and speculative. The value of your investment may change rapidly under different circumstances, and past performance does not guarantee future returns. Before making any investment decisions, consult with a qualified professional. This article is not a EuroNerd or the author’s suggestion to invest in cryptocurrencies.

The best crypto exchanges in Europe

  • Coinbase & Coinbase Pro — Best overall
  • Kraken — Best exchange for traders
  • Gemini — Best for free withdrawals
  • Cex.io — Best UK exchange
  • Bisq — Best decentralized Bitcoin exchange
  • 1inch — Best decentralized Ethereum and BNB exchange

Final verdict

Getting started with cryptocurrency trading and investing is easier than ever. The best crypto exchanges and platforms for European investors have many EUR and GBP trading pairs, low fees, and excellent security. Coinbase, Kraken, and Gemini are excellent exchanges that provide reliable trading services at reasonable costs. All three offers trading in BTC/EUR, ETH/EUR, BTC/GBP, and ETH/GBP at low rates; and support EUR and GBP deposits and withdrawals.

There should be an exchange that meets your requirements, whether you use one of the exchanges listed above or another. The important thing is that you go with a platform you feel comfortable with and that supports your country. Consider how much risk you’re willing to take, the length of time you’ll hold onto your coins, and what you want to do with them once you’ve bought them.

Was Bitcoin invented in Europe?

The identity of Satoshi Nakamoto, the creator of Bitcoin, is still unknown. However, we do know that Nakamoto embedded a text in the first-ever Bitcoin block that contained a reference to the Times of London headline from January 2009: “Chancellor on brink of second bailout for banks.”

It’s interesting why someone would specifically choose a title from a British article. It’s also known that Satoshi used British spellings such as optimise and colour in forum posts and comments in the bitcoin source code, as well as expressions like bloody hard.

However, a large data study has shown that the original author varied between American and British English, making it more difficult to say where Satoshi is from. Still, it does seem that his native proficiency in English is a strong indicator he was born in an English-speaking part of the world.

How to buy cryptocurrency in Europe

For the uninitiated, investing in cryptocurrencies can seem complicated. However, it really isn’t. The process is similar to buying any other asset on a traditional brokerage account, like stocks or bonds. With the right platform and a little research, buying cryptocurrency is actually quite simple. It gets much easier when you break it down into a few straightforward steps.

Europeans have access to some of the best and most well-regulated exchanges in the world. The buying process is nearly identical across all these exchanges, so the steps are the same, whether you’re in the U.K., France, Germany, Bulgaria, or any other European country. You’ll need to create a user account, deposit funds, place an order, and decide whether to hold your cryptocurrency on the exchange or transfer it to a personal wallet.

Before you buy crypto

The importance of privacy and security when it comes to investments in bitcoin and other cryptocurrencies cannot be stressed enough. You must keep your private key to a public address secret, as anyone who gains access to it can authorize transactions. Criminals may try to steal your private key if they learn that you own crypto, so be sure to keep it safe. Another thing to keep in mind is that anyone can see the balance of a public address you use. However, you can distribute your bitcoin stash over many addresses and protect your privacy by using multiple public addresses. Keeping large purchases at non-transactional public addresses is a good idea. This will assist you in keeping your overall balance hidden from view.

A good private Bitcoin wallet will change the address every time you receive a transaction. Because Bitcoin addresses and transactions are public knowledge, you should never reuse a Bitcoin address. Ledger, widely considered the safest crypto wallet, will automatically generate a new address for you every time you receive a payment. It does this by assigning an extended public key (xpub) to each wallet. Thanks to the xpub, you can receive transactions on a new address associated with the same account. The address stays the same for other crypto chains like Ethereum and Cardano unless you deposit to a new address.

When you buy crypto on an exchange, you need to decide whether to leave it on the exchange or withdraw it to a personal wallet. If you plan to hold your investment for a long time, it might be best to store it in a personal wallet where you have complete control over the private keys. With private keys, no one can touch your cryptocurrency except you. On the other hand, if you’re planning to make frequent trades, keeping your crypto on an exchange might be a better option. This way, you can take advantage of price differences between exchanges and get your orders filled quickly.

1. Choose crypto venue

The first step is to decide how and where you want to buy cryptocurrency. There are a variety of mobile apps and web platforms that allow you to buy crypto for fiat, such as the Euro or British Pound, but you can also buy crypto peer-to-peer (P2P) without using a traditional exchange.

Most people buy bitcoin and other cryptos through exchanges, which are platforms or apps where you can buy, sell, or trade cryptocurrencies for other digital assets or traditional currencies. Buying crypto through an exchange is by far the safest and easiest way to get started. The downside is that exchanges require more personal information than P2P services do to comply with KYC/AML regulations.

P2P platforms, on the other hand, allow buyers and sellers to trade cryptocurrencies directly with each other. These services are often considered more private because they usually don’t require users to submit their personal information. It’s also possible to buy from other people for cash or through a bank or PayPal transfer. You should be extra careful when trading peer-to-peer, as there are numerous cases of scams and thefts. There are countries and situations where settling trades this way is the only viable option.

When choosing an exchange, it’s essential to look at the supported currencies, pricing, withdrawal options, and security features. In Europe, investors can use Coinbase, Crypto.com, Kraken, Gemini, Binance, and FTX, to name a few available platforms. These are all reputable exchanges that have been around for a long time and support EUR trading pairs.

2. Secure your account

Internet security is of the utmost importance when dealing with cryptocurrencies. Unfortunately, many people have lost their crypto because they didn’t take the necessary precautions to protect their accounts. To protect your funds, you should always use a strong password and two-factor authentication (or Two-Step Verification).

Two-factor authentication is an extra layer of security that requires you to input a unique code generated by an app on your mobile device to log in. This makes it much harder for hackers to gain access to your account. Google Authenticator and Microsoft Authenticator are two of the most popular apps used for two-factor authentication.

Whitelisting is another security feature that some exchanges offer. This means that you can only withdraw crypto to addresses that you’ve previously approved. A newly whitelisted address usually takes 48 hours to 7 days to become approved. This helps to prevent accidental withdrawals and protects you from phishing attacks.

3. Deposit Euro or another fiat currency

After you’ve picked an exchange and secured your account, the next step is to deposit Euro or another fiat currency into your account. This can usually be done through a bank transfer or by credit/debit card. Once the funds have arrived in your account, you’re ready to start buying crypto.

  • EUR (Euro): SEPA. If you have a bank account within the Single European Payment Area (SEPA), you can deposit EUR for free or at a very low cost via SEPA. This method usually takes less than one business day. If your account is outside SEPA, you can deposit via SWIFT at a higher price.
  • GBP (Pound Sterling): FPS/BACS/CHAPS. Your bank will likely support all three transfer systems if you have a UK account. These methods allow for immediate bank transfers or transfers that may take one to three days to clear.
  • CHF (Swiss Franc): SIC or SWIFT. If you have a Swiss bank account, you can use the SIC or SWIFT system to deposit CHF. These methods usually take one to two business days to clear. Only a few exchanges support CHF deposits.
  • USD (US Dollar): ACH/wire transfer. Most US banks offer wire transfers that allow for same-day deposits and withdrawals. However, as a non-US investor, you may not always be able to deposit USD.
  • Credit/Debit. Visa/Mastercard. Most exchanges accept credit/debit card deposits, but this method is usually more expensive than bank transfers. This is because exchanges must pay fees to the credit/debit processor. In addition, your bank may charge a fee if your local currency is different from the one you deposit.

The liquidity for trading pairs in EUR is generally good at larger exchanges such as Coinbase and Kraken. This implies that you should be able to purchase and sell your cryptocurrency at low spreads and prices that closely match those available in USD. Other fiat currencies don’t have as much liquidity, so you may find that the prices are not as favorable.

Bitcoin and crypto are legal in Europe, but some banks and financial institutions may block transactions to and from exchanges. Suppose your bank is hesitant to process crypto-related transactions. In that case, you may want to look for a bank that’s more supportive of the industry. Using an online bank often works to get around these issues.

4. Place your order

Now that you’ve deposited Euro or another fiat currency into your account, it’s time to place your order. You can usually do this by selecting the “Buy/Sell” tab on the exchange and choosing the cryptocurrency you want to purchase. Then, enter the amount of crypto you want to buy and review the transaction details before confirming your order.

Most exchanges will allow you to place an order with a limit or market order.

  • Limit Order: With a limit order, you set the price at which you’re willing to buy or sell cryptocurrency. Your order will only be executed if the market price reaches your limit price. This is an excellent way to get the best prices, as your order will only be filled if it’s at or below the current market price.
  • Market Order: With a market order, you instruct the exchange to buy or sell cryptocurrency at the best available price. This is a good option if you’re looking to quickly get into or out of a position. A market order is the simplest type of order and is often the default option on exchanges.

Once your order is placed, it will be executed when the market price reaches your limit price (if you placed a limit order) or immediately (if you placed a market order).

Many exchanges also provide tools to set up recurring purchases of bitcoin or ethereum so that you may dollar-cost average your way into the market. This can be a helpful technique to decrease your danger of suffering a significant loss if you invest all at once before the market falls.

Altcoins, those that are not bitcoin or ethereum, have lower liquidity when traded against non-USD fiat currencies. This means that the prices you receive may not be as favorable as when trading against USD. Most altcoins don’t have trading pairs with EUR or GBP, so you’ll likely need to use a stablecoin like USDC or USDT as an intermediary.

4. Get a cryptocurrency wallet 

Having successfully purchased cryptocurrency, you now need to decide how to store it. You have two choices:

  • Keep your cryptocurrency on the exchange where you bought it.
  • Move it to a personal wallet that only you control.

Most people choose to move their cryptocurrency off exchanges. Sending your funds into a personal wallet ensures that only you have control over your private keys—those strings of numbers and letters that give you access to your coins. It gives you total freedom to use your coins as you please, without the need for approval from an exchange. Imagine you live in a country that is suddenly under sanctions and all international banks block transfers to and from your country. If you have your cryptocurrency stored on an exchange in that country, you may not be able to access it. However, imagine you have a personal wallet. In that case, you can simply take your computer or phone and transact with anyone you’d like without being blocked.

Exchanges have excellent security these days, so if you only own a smaller amount of cryptocurrency and you’re not worried about losing it, keeping your funds on an exchange may be a good option for you. But if you own a more considerable amount or are concerned about security, moving your coins to a personal wallet is the best way to go. Exchanges can block your account at any time and request additional information about you, which can be a hassle. As financial companies, they must comply with various regulations that can change at any time and affect users adversely.

5. Hold, stake, or spend your crypto

This is the point where you ask yourself what you want to do with your newfound cryptocurrency. You have a lot of options:

  • Hold: Buy and hold cryptocurrency for the long term in hopes it will increase in value. This is a strategy that requires patience and discipline, as you’re trusting that the market will eventually correct itself and reward you for holding your coins. Bitcoin was invented as an “inflation-free” asset. As such, many believe its value will increase over time while other assets like the US Dollar will depreciate.
  • Stake: If you own certain types of cryptocurrency, like ethereum, you can stake your coins to earn more. Staking is the process of holding crypto funds in a wallet to support the operations of a blockchain network. In return for staking and validating transactions, participants are rewarded with newly minted coins or transaction fees.
  • Earn interest: Many centralized and decentralized lending platforms and online wallets offer the ability to earn interest on your cryptocurrency. This usually involves lending your coins to another user or crypto hedge fund willing to pay you interest for the loan.
  • Spend:  Use your cryptocurrency to buy goods and services. While this option is still somewhat limited, as not many businesses accept crypto yet, it is growing in popularity. Switzerland and El Salvador are a few countries where you can spend crypto without converting it into fiat currency.
  • Cash or swap it: In case the value of your cryptocurrency has increased significantly, and you want to cash out, you can do so by converting it into fiat currency. Or, if you prefer to hold onto your crypto, perhaps due to your local tax laws, but want to avoid the volatility, you can swap it for a stablecoin like USDC that’s pegged to the dollar. This way, you can remain in the crypto ecosystem but avoid the ups and downs of cryptocurrency prices.

Alternatives ways to buy cryptocurrency

Using a centralized exchange is the most common way to buy cryptocurrency. However, other ways let you directly or indirectly purchase crypto.

  • Peer-to-peer. You can buy crypto from another person using a peer-to-peer exchange like Bisq, LocalBitcoins, or Paxful. The advantage of this method is that you can pay with fiat currency, like EUR or your local currency. The seller may also be willing to accept payment methods that centralized exchanges don’t support, like cash, gold, or PayPal. The downside is that it can be riskier than using a centralized exchange, as you’re trusting that the other person will send you the crypto after receiving your payment. However, most peer-to-peer systems use escrow accounts to combat fraud.
  • PayPal. There are two ways you can buy crypto with PayPal in Europe. The most straightforward approach to purchase bitcoin is through your PayPal account if you have a debit card or bank account linked to it. However, this method is not available everywhere, and you cannot transfer out your crypto to a personal wallet. The alternative is to purchase cryptocurrencies via a third-party platform, such as an exchange or mobile app, using your PayPal account’s balance.
  • Neteller/Skrill. Like PayPal, Neteller and Skrill are eWallets with built-in crypto exchange features. You can buy and sell cryptocurrencies within your Neteller or Skrill account, but you cannot transfer them out to a personal wallet. However, you can use balances in your Neteller or Skrill account to purchase crypto on an exchange that accepts these payment methods. The benefit of Neteller and Skrill over PayPal is that they support more countries and are more lenient with regulatory requirements.
  • Crypto ETFs/ETNs/ETPs. You can buy crypto indirectly by investing in products that track the price of a cryptocurrency, like exchange-traded funds (ETFs), exchange-traded notes (ETNs), or exchange-traded products (ETPs). For example, the Coinshares Physical Bitcoin (ISIN GB00BLD4ZL17) allows investors to trade BTC without holding the underlying asset. The main advantage of this method is that these funds are regulated and can be traded on the same brokerage account where you have your stocks and ETFs. The downside is that the products can be more expensive, and you don’t have direct control over your coins.

How to cash out crypto in Europe

You can sell crypto at the same places you buy it. So, if you purchased crypto on a centralized exchange, you can sell it at that same exchange. However, there are other ways to cash out your crypto as well.

1. Find a venue to cash out

The obvious way to cash your crypto out is to find a place to exchange it for fiat currency. Centralized exchanges are the most common way to do this. They offer the most liquidity and generally the best rates. If you want to avoid exchanges, there are other options available as well, like direct peer-to-peer trades, over-the-counter (OTC) markets, gold merchants, or real estate agents that accept crypto.

  • Exchanges are the one-stop solution for selling your crypto for fiat currency. They have the best rates, lowest fees, and can generally be trusted with large amounts of money. If you want to cash out a large amount of crypto, exchanges are the best way to do it. Once you have transferred your coins, you can sell them for the fiat currency you need. Then find the option to withdraw that money to your bank account, and you’re done.
  • Over-the-counter (OTC) desks are usually run by large brokers or exchanges who match buyers and sellers of crypto. The advantage to using an OTC desk is that you can get better prices and avoid revealing your trades publicly. However, these desks are typically used by institutional investors or high-net-worth individuals because the trade minimum (typically $100,000) is usually large.
  • Peer-to-peer. The main downside of exchanges is that they are centralized, which means you must share a lot of personal information. If you are looking for a more private way to cash out your crypto, online peer-to-peer trades might be the best option. Or in-person if you trust the person and can meet up physically. Peer-to-peer trades can be settled in any currency or asset, even goods, and services, like a gold coin or a used car.
  • Gift. Depending on the tax laws in your country, it might be possible to give your crypto as a gift to your children or spouse without realizing a capital gain or loss. If you have a large amount of crypto that you want to cash out, this might be a good option to avoid paying taxes on your gains. Again, this method will depend on where you live, so it’s best to consult a tax advisor before going in this direction.
  • Crypto debit card. A crypto debit card allows you to spend your crypto like regular currency. The cards are linked to your wallet, so you can use them anywhere that accepts Visa or Mastercard. This is a convenient way to spend your crypto without converting it into fiat first.

2. Have a crypto-friendly bank ready

Banks, because of government pressure and anti-money laundering (AML) regulations, can sometimes be a headache when it comes to accepting the fiat proceeds of your crypto sales. Some banks are fine and don’t ask questions, even for large amounts. Others have outright banned transactions from crypto venues. In contrast, others will require you to go through a time-consuming and frustrating process of verifying your identity and account history before they will allow you to deposit money from an exchange.

There’s really no definite answer when it comes to what banks will accept crypto deposits and withdrawals. The best thing you can do is have a few different options ready so that if one bank rejects your requests, you can try another. All licensed banks must enforce the same AML/KYC procedures, so you won’t be able to avoid them altogether.

Your bank allows it

This is the best-case scenario, where your bank doesn’t ask any questions, and you can easily withdraw your money. Your bank may also ask questions but still allow it. In this case, your bank will probably require you to fill out some paperwork or answer some questions about the source of the funds. They might also want to see a history of your transactions. If you know this will happen, it’s best to be prepared with the documentation they might need.

Your bank does not allow it

If you know beforehand that your bank will not allow you to withdraw money from an exchange, it’s best to find a different bank before you make the sale. A lot of banks unfortunately have a blanket policy against all things crypto and have systems in place checking for keywords or account names associated with crypto. If you try to withdraw and your bank finds out, they might freeze your account or worse.

In case your bank outright rejects crypto, there are a few other options you can try. You can try a crypto-friendly online bank, or you can open an account with a foreign bank. Many crypto investors use these banks as middlemen between the exchange and their own bank. These banks may be more likely to understand your needs and be more accommodating.

  • Online bank: Revolut, the largest online bank in Europe, accepts crypto-related transactions from a number of exchanges and merchants. This list includes Xapo, Crypto.com, Monday, Bitstamp, Kraken, Coinbase, Gemini, Bitpanda, Coinfloor, Binance.
  • Private banks: SEBA, Dukascopy, and Bank Frick, separate pro-blockchain private banks in Switzerland and Lichtenstein that promise a secure and easy-to-use bridge between digital and traditional assets.
  • EMIs: Mercury, Simplex, and many other Baltic-based electronic money institutions allow you to deposit fiat and withdraw crypto from some exchanges.

You can also try withdrawing your money in another form, like gift cards or prepaid debit cards. However, this solution will only be suitable for smaller amounts.

3. Pay your taxes

Tax agencies in Europe are clamping down on crypto investors. They are starting to come after anyone who has made a profit from trading cryptocurrencies. The best way to avoid any issues is to pay your taxes on the profits you make. You should report all of your transactions, regardless of whether you have made a profit or not. If you live in a country where crypto is not taxed, this is not necessary, but you should still keep track of all your transactions.

Centralized vs. decentralized cryptocurrency exchanges

Decentralization is a core principle in blockchain and distributed ledger technology. Satoshi intended bitcoin to be “a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.” The purpose of a decentralized finance system was to eliminate the need for a third-party custodian by having participants interact directly with each other.

In the early days, from around 2009 to 2012, there were only two options for obtaining bitcoin: mining it yourself or participating in a peer-to-peer trade on a website like Bitcointalk or an IRC channel. Buying bitcoin was a risky and complicated process. It required sending money to someone else’s bank or PayPal account and waiting for the bitcoin to be delivered. But the stakes were not as high as they are today because the price of one bitcoin was only a few dollars.

In 2012, interest in Bitcoin had spread, and new ways to obtain it emerged. The first bitcoin centralized exchanges appeared at this time. Coinbase, Bitstamp, and Kraken were some of the first exchanges on the market that helped mainstream adoption by making it possible to buy bitcoin with fiat currency. These exchanges acted as custodians, holding the user’s private keys and bitcoins in cold storage offline. They also implemented know-your-customer (KYC) and anti-money laundering (AML) compliance measures to prevent fraud and protect users.

Centralized exchanges

Coinbase, Kraken, Binance, and other popular platforms are centralized exchanges. This means that they are run by a company or organization responsible for managing the platform, holding the private keys to users’ funds, and processing transactions.

The advantage of centralized exchanges is that they are easy to use and have all the features that beginners need to start trading cryptocurrencies. They provide the easiest way to buy and sell cryptocurrencies with fiat currency. Trading fiat currency for crypto is very hard without centralized trading venues due to the difficulty of finding a trustworthy counterparty to trade with.

Centralized exchanges also have the best liquidity and lower fees. Furthermore, they allow you to trade coins across different blockchains, such as BTC-ETH or ETH-ADA, which is something that decentralized exchanges generally don’t offer.

The major drawbacks of decentralized exchanges are that they have the power to freeze accounts and block transactions, much like a regular bank. They go against the underlying ideas of blockchain, which aim to eliminate the need for a third party. Centralized exchanges also make it simple for governments to discover and track whether their citizens have bitcoins and monitor their transactions.

Decentralized exchanges

A decentralized exchange, also known as a DEX, is a peer-to-peer marketplace where traders transact directly without involving any central authority. On decentralized exchanges, transactions are carried out outside the platform’s control. As such, users always maintain control of their wallet’s private keys because the exchange is non-custodial.

The architecture of a decentralized exchange is determined by the blockchain it is built on. Bisq and Paxful are two major peer-to-peer bitcoin trading platforms. However, most decentralized finance is built on Ethereum and Binance Chain. These chains are programmable to employ smart contracts, which may execute trades automatically, and provide advanced finance features such as lending, borrowing, staking, and leveraged trading.

Since no specific person or company is running or controlling decentralized exchanges, these types of exchanges operate in a gray area of the law where no government body can realistically step in and demand accountability or shut them down. Because users of the platform do not need to disclose their identity, they can use it in any manner they choose, both legal and unlawful.

Decentralization increases freedom and privacy and comes with more responsibility, as users have full responsibility for managing their own private keys and keeping their funds safe. Not everyone is comfortable with this, which is why centralized exchanges are still more popular.

The legality of cryptocurrency in Europe

Cryptocurrencies are generally legal in the European Union, the UK, and Switzerland. Each country in Europe has its own rules for cryptocurrency exchanges. Most of them require some type of registration and licensing. The taxation of cryptocurrencies also varies considerably, with rates on cryptocurrency-derived earnings ranging from 0% to 56%.

Cryptocurrencies are still a relatively new phenomenon, and as such, the regulatory landscape is in a state of flux. There are, however, several directives and regulations in place regarding cryptocurrencies, with the ultimate goal of creating a unified regulatory framework for the entire European Union. It’s expected that cryptocurrencies will eventually fall under the jurisdiction of the European Securities and Markets Authority, which issues directives and regulations for financial instruments in the EU.

Europe is the world’s dominant cryptocurrency economy, according to data from blockchain analysis firm Chainalysis. Each year, the continent conducts over €1 trillion worth of crypto transactions, accounting for 25% of global crypto trading. The United Kingdom had the most substantial cryptocurrency trading in Europe, with €145 billion in transactions. The UK was followed by France, Germany, the Netherlands, and Spain. Around half of all crypto activity in Europe takes place through decentralized exchanges.

The UK

The UK is the largest cryptocurrency trading economy in Europe. Cryptocurrencies are legal in the UK, and exchanges must register with the Financial Conduct Authority. Taxation of crypto assets falls under the jurisdiction of HMRC, who taxes crypto-derived earnings as capital gains.

France

France is the second-largest cryptocurrency trading economy in Europe. The French government has been receptive to the growth of cryptocurrency and has previously engaged with Binance. The French Financial Markets Authority (Autorité des marchés financiers, or AMF) regulates cryptocurrency exchanges and publishing recommendations and guidelines. In terms of taxation, France has a favorable stance. The is no tax on crypto-to-crypto transactions, only when the investors convert their crypto assets to fiat currency.

Germany

Close behind France, Germany is the third-largest cryptocurrency trading economy in Europe. Cryptocurrencies are legal in Germany. However, exchanges must obtain a license from the Federal Financial Supervisory Authority (BaFin). The taxation of cryptocurrency is still being discussed in Germany, but it is presently taxed as property, allowing for tax-free disposal after one year of ownership.

Netherlands

The Netherlands is the fourth-largest cryptocurrency trading economy in Europe. Cryptocurrencies are legal in the Netherlands, however, exchanges must obtain a license from the Dutch Central Bank (DNB). The Dutch authorities have been particularly demanding in their regulation of exchanges. As a result, even exchanges with a license elsewhere in Europe must register locally. The taxation of cryptocurrency gains is still being discussed in the Netherlands but is presently taxed under a yearly wealth tax regime.

Spain

The crypto market in Spain is growing year by year, with the number of active users doubling since 2018. Cryptocurrencies are legal in Spain, and exchanges operating in the country must obtain a license from the National Securities Market Commission (CNMV). Cryptocurrency taxes in Spain are changing all the time, but the Agencia Tributaria currently classifies crypto as property and taxes it accordingly under different brackets from 19% to 26%.

Switzerland

Switzerland continues to be a safe haven for both private and institutional crypto investors. Cryptocurrencies are legal in Switzerland to the degree that some Cantons accept payments in bitcoin and ethereum. The government promotes blockchain and distributed ledger technology projects. The confluence of supportive regulation and a welcoming environment has seen many startups migrate to Switzerland. Like the Netherlands, there are no capital gains taxes on crypto profits from sales, but a yearly wealth tax levied on the total value of a person’s assets.

FAQs

Are cryptocurrencies legal in Europe?

Cryptocurrencies are legal in Europe. In fact, the European Union has been one of the most proactive regions when it comes to regulating cryptocurrencies and distributed ledger technology. Outside the EU, Switzerland and the UK are at the forefront of innovation regarding crypto. These two countries have the highest number of cryptocurrency projects going and bespoke regulations to attract these companies.

How is crypto taxed in Europe?

Cryptocurrencies are taxed differently in different countries in Europe. In some countries, profits from cryptocurrency trading are considered income and taxed at the standard rate, in other countries as capital gains. In a select few countries, no tax is levied on profits. Interest from staking, yield farming, and crypto interest are generally taxed as interest or income when received and disposed of. However, this will depend on how you acquired the cryptocurrency and what you did with it afterward. To get accurate tax advice for your country, speak to a local accountant or tax specialist.

What is the best crypto tax software in Europe?

We recommend Koinly as the best crypto tax software in Europe. Koinly is developed by European software developers and is a crypto tax calculator that supports all major exchanges and wallets, both centralized and decentralized. Furthermore, Koinly can produce highly detailed reports tailored to your country’s tax requirements and can be shared with your accountant or tax authority.

What is the best way to buy crypto with euros?

The fastest way to buy crypto in Europe is by card, but SEPA or bank transfer is the cheapest way. Most crypto exchanges accept card and bank payments in EUR and GBP, but usually not local currencies. Using an online bank like Revolut as a middleman can be an excellent solution to avoid currency conversion fees. Other payment methods like PayPal and electronic wallets are generally not recommended due to their high fees. However, it can be necessary if your bank does not allow crypto-related transactions.

What is the most popular crypto in Europe?

Bitcoin and ethereum are the most popular cryptocurrencies in Europe. This is due to their large market capitalizations, high liquidity, and widespread adoption by individuals and institutions. Bitcoin, despite its age, is still considered the most distributed and most secure cryptocurrency immune to government interference and tampering. Ethereum, on the other hand, is favored for its smart contract capabilities, which allow for the development of decentralized applications and decentralized finance.

Does Coinbase work in Europe?

Except for a few countries, Coinbase is available almost everywhere in Europe. Coinbase supports EUR transfers through SEPA, 3D Secure Card (Visa and Mastercard), Ideal/Sofort, PayPal, and Apple Pay (in some countries). UK customers have access to the same payment methods and Faster Payment with GBP.

Does Kraken work in Europe?

Yes, Kraken works throughout Europe and supports more countries than Coinbase. For EUR, Kraken supports Instant SEPA transfers through several local European Banks. GBP works for the UK and Gibraltar