Hey there! More and more people are incorporating cryptocurrency into their wallets. However, many still don't use it daily. With the introduction of Bitcoin ETFs and Ethereum ETFs, investing in cryptocurrency has become easier than ever. But investing in Bitcoin is just one use of cryptocurrencies. In this guide, I want to show you how you can do more with your cryptocurrencies—basically managing money yourself as if you were your own bank.
In a previous article, I discussed two ways of becoming your own bank, but in my view, the real way to achieve this is by performing all the functions your bank would for you, all by yourself. And this is now possible with cryptocurrency. Below, I share a personal example of how I maximize my profits using this method.
My personal experience and motivation
It’s amazing to be in control of my cryptocurrencies from my mobile phone or my computer and being able to do operations that would take long and be tedious with a normal bank with a couple of clicks in the smartphone.
Every week I organize my crypto investments to maximize my profit (since the rates of % that you earn per year when staking change from exchange to exchange regularly). I like to play this game of managing the money to be able to maximize my returns myself without having to predict any price on the cryptocurrencies, just by changing them from wallet to wallet to maximize the earnings.
In particular, I usually move Stablecoins from one wallet to another or from one exchange to another to go from 10% to 12% or from some offers that give me 16% for a couple of months. Stablecoins are cryptocurrencies that have a value that follows real currencies such as the USDT, which follows the USD. These coins are not prone to big changes in value and therefore, if you can get 16% of return in them per year, it would be as if you would have a flexible account in your bank that would give you 16% on your saved USD, which is of course in 2024 impossible, despite inflation.
I usually don’t have much in my non-crypto bank account and basically, when I need crypto I take my stablecoins (for example the stablecoin of Euros) and i withdraw them to my real bank account. With the exchange Nexo, I’m currently earning 9% yearly returns of my Euros in the Nexo coin and the withdrawal is free once per month to my bank account and it happens in less than 30 minutes.
Then, I basically transfer my withdrawn Euros in Plutus card, which is the one giving me the highest cashback option (5% of everything I buy) and finally I do the purchase with my card. With this, I’m sure that when I’m not spending, my money is producing the maximum returns and that when I’m spending I also get the maximum cashback.
All this way of managing your money would be impossible with a bank, because it’s just very old-style and you cannot change as fast from bank to bank, from an earning product to another, etc.
I’ve been investing in cryptocurrencies since 2015 and since 2018 I mostly work on holding them and buying them on a regular basis using a dollar cost averaging approach (or bitcoin cost averaging 😉) and I use them to maximize my returns instead of trying to time the market. This is a much safer option in my opinion because you don’t depend on luck trying to predict the future and you basically just assume that the price will keep going in value because of several reasons that you can read here. Moreover, I use 11 different strategies to be sure that I don’t lose a lot of value if the market would crash fast as explained here.
Finally, if you subscribe to the newsletter of BYO Banking you will get templates in which I explain when is it worth it to move the money according to the % that you can earn in your wallets or in exchanges. For now, you can refer to my list of the top crypto exchanges of 2024. You would help me a lot if you would use my referral links on that list to create an account. Moreover, you can earn more than 200€ if you create a couple of accounts using my referral links with a couple of clicks and after some verification methods 😊
Why is it a good timing to start using cryptocurrencies?
This is a question that makes a lot of sense before you start jumping into the world of cryptos. Is it a good time to buy Bitcoin? Is it too late since it already costs over 60k USD? Well, to be honest, the price of Bitcoin seems to be destined to keep going up in value for a couple of years at list, according to various reports on the demand and supply. Moreover, now there are a couple of reasons for why is it not too late, and why it seems like a good timing to start having some part of your portfolio with cryptos.
Still new: Few people in the field still
First, Bitcoin is there since January 2009, which is already 15 years. However, 15 years in terms of financial history is still quite new. Moreover, if you look at the statistics, not so many people are having bitcoin or other cryptos, and even the ones that are having them, they don’t often use it to maximize profits as explained in my motivation.
Figure from here showing that 560+ million people own cryptocurrency in some way or another
If we compare it with the investments in stocks. The total market of crypto in comparison to stocks was only 2.5% (2.6 trillion$ in comparison to 106$ trillion). This means, that there’s a lot of potential for people to use such investments. Of course, stocks involve all types of companies with tangible value, while cryptocurrencies are mostly related to digital projects.
Finally, if we go to the personal level, how many people do you know that are not keen on investing in crypto because they’re scared, and they just prefer to have something more secure. Well, in my place of work for example, out of 25 people, I’m the only one having crypto investments for example. In my family, the same, etc. It’s basically not so easy to find so many people that are open to use new technology investments because of fear. As I explained here, I wouldn’t invest everything in crypto but you can maybe give it a try with money that you can afford to lose.
More trust: Starting to be used by governments and institutions
Since this year, I would say, the trust have increased dramatically. Namely, many governments are acquiring Cryptocurrencies (like Germany, USA, El Salvador), institutions like bank Santander are also acquiring some cryptocurrencies like Ripple (XRP), and finally, there is an ETF that has been approved for both Bitcoin and Ethereum. These ETFs are present already in many ETF brokers (see this list of free ETF brokers) and you can just buy these regularly with a click. It’s easier than ever to own some Bitcoin. And this interest reflects more trust in such digital currencies.
Safer than before
Moreover, in my opinion, the market is safer than before. Some of the crypto holdings, like the ETFs, are backed up by brokers, which are backed up by banks that ensure that your money would be safe up to 100k€ even if they go bankrupt. This is a European law that is quite beautiful and allows to have some security.
But even with some crypto exchanges, I used some exchanges in the past such as Cryptopia or Blockfi, which resulted to be ponzi schemes and I must say I lost some money (about 0.12 BTC), which is very sad, but the current popular exchanges (Such as Coinbase, Kraken, Nexo, YouHodler or Binance) seem to be much better protected against this and with a much higher cybersecurity, according to their terms of use.
How to be your own bank with Bitcoin: BYOB?
1. Transfers in Real-Time and Super Cheap Anywhere in the World
Cryptocurrencies, especially Bitcoin, enable you to transfer money across the globe in real-time and at minimal costs. Traditional banks often charge hefty fees for international transfers, and the process can take days. However, with Bitcoin, transactions are processed within minutes, regardless of the amount or destination. This speed and cost-efficiency make Bitcoin a powerful tool for managing your own finances.
2. Convert Currencies Without Fees
One of the most liberating aspects of cryptocurrency is the ability to convert between different currencies without incurring fees. Unlike traditional financial institutions that charge for every currency conversion, crypto exchanges often offer zero or minimal fees, allowing you to switch between different digital currencies or even convert them into fiat money like USD or EUR at no additional cost.
3. Optimize Your Flexible and Fixed Earning Products Without Costs
Cryptocurrencies allow you to optimize your earnings by moving funds between different financial products without incurring penalties or fees. For example, you can shift your assets from a flexible savings account to a fixed-term deposit to take advantage of higher interest rates, and then back again as needed. This kind of flexibility is nearly impossible with traditional banks, which often impose restrictions and fees for moving funds.
4. Maximize Your Yearly Interest
By using cryptocurrencies, you can maximize your yearly interest by constantly shifting your funds to the highest-yielding platforms or coins. Unlike traditional savings accounts, which offer minimal interest rates, cryptocurrencies can provide much higher returns, especially when you engage in staking or lending your assets. Keeping track of these opportunities allows you to maximize your earnings effectively.
5. Get More Cashback Than with Normal Currencies
Cryptocurrency debit cards often offer better cashback deals than traditional credit or debit cards. For example, some cards provide up to 5% cashback on purchases, which can significantly boost your savings. Additionally, since many crypto cards allow you to choose the cryptocurrency you want to receive as cashback, you can potentially benefit from the appreciation of that crypto over time.
6. Withdraw to Cash: Euros, Dollars, etc.
With cryptocurrencies, you can easily withdraw your digital assets into cash—whether it's euros, dollars, or other fiat currencies. Many crypto platforms offer seamless withdrawal options to your bank account or even to a crypto-backed debit card. This process is usually faster and cheaper than traditional bank withdrawals, giving you quick access to your funds when you need them.
7. Trade Like a Broker
Cryptocurrencies empower you to trade like a professional broker without needing extensive financial knowledge or experience. With the right tools and platforms, you can buy and sell assets, set up automated trading strategies, and even participate in futures markets. This accessibility allows anyone to engage in high-level financial activities that were once reserved for professionals.
8. Invest in New Projects Very Easily
The world of cryptocurrency is rich with new projects and startups that you can invest in with just a few clicks. Platforms like ICOs (Initial Coin Offerings) and token sales allow you to participate in the growth of innovative projects from the ground up. This ease of access is unmatched by traditional investment methods, where getting in on the next big thing often requires insider knowledge or significant capital.
9. Other Ways in Which You Can Manage Money with Crypto But Not with Your Bank
Cryptocurrencies offer additional unique opportunities for managing your money that traditional banks simply can't provide. For instance, you can engage in peer-to-peer lending, where you lend your crypto assets to others and earn interest, or you can participate in decentralized finance (DeFi) platforms, where you can borrow, lend, and trade without the need for intermediaries. These innovations open up a whole new world of financial possibilities. You can see a summary on 9 ways to earn crypto for free in 2024 here.
Conclusion
Cryptocurrency represents a transformative way to manage your finances independently of traditional banks. In this guide, I summarized how you can BYOB be your own bank with bitcoin, which basically involves managing your money and investments yourself, without needing to go to the bureaucracy related to using bank products.
Whether you're interested in maximizing your profits, enjoying faster and cheaper transactions, or exploring new investment opportunities, cryptocurrency provides tools and platforms that are more flexible, efficient, and potentially more profitable than traditional financial systems.
Now is the perfect time to start exploring these possibilities and truly become your own bank. By taking control of your financial future with cryptocurrency, you're not only investing in your wealth but also in the future of global finance.
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