Buying cryptocurrency: bitcoin example
After completing thorough analysis on bitcoin price movements, you believe the market will trend upwards from its current level of 75,400. Consequently, you decide to buy bitcoin using your spot crypto account.
In this example, you decide to invest £500 in bitcoin. When making your purchase, our 1.49% flat spread fee is automatically deducted from your investment amount. This means if you deposit £500, you’ll receive slightly less than £500 worth of bitcoin after the fee is deducted.
Let’s say you receive 0.00662 bitcoin. Since this is a spot crypto account, you now enjoy beneficial ownership of this bitcoin in your account.
The market moves as you predicted, with bitcoin rising to a level of 83,000. At this point, you decide to sell your bitcoin and realise your profit. Your 0.00662 bitcoin is now worth £549.46. After deducting another fee for selling, your net proceeds would be approximately £548.71, giving you a profit of £48.71 – a return of about 9.7% on your initial investment.
Suppose, however, that the market instead decreased to 70,000, and you decided to sell your bitcoin at this price. Your 0.00662 bitcoin would be worth £463.40. After the selling fee, your net proceeds would be £462.65, resulting in a loss of approximately £37.35 (7.5% on your investment).
Please be aware that these numbers are for illustration only.
