How to Buy Cardano (ADA) 2022 Guide

Created in 2017, Cardano (ADA) shocked the cryptocurrency market by climbing up to 11th place among the top coins by market capitalisation. Fast forward to 2021 and ADA has launched smart contracts and continues to rise in price, and the coin has jumped from 30 cents to over $2. In this how to buy Cardano guide, we explain everything you need to learn about this project and the platforms to purchase ADA.

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Contents [show]

Where to Buy ADA – Quick Guide

1. Choose a Cardano exchange – we recommend eToro as it’s FCA, ASIC and CySEC regulated
2. Create an account
3. Deposit funds into your account
4. Search ‘Cardano’ in the drop-down menu
5. Click ‘Open Trade’ and select an amount of ADA to buy

Best Places to Buy Cardano in December 2022

The top places to buy Cardano include well-known regulated cryptocurrency exchange eToro (which also pays automatic staking rewards for holding ADA in your wallet), ByBit, Binance, KuCoin, Coinbase and Bitfinex.

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for £1000 you get4581.6706 ADA

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for £1000 you get4581.6706 ADA

68% of retail CFD accounts lose money.

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Compare Platforms to Buy Crypto

Since Cardano is a popular altcoin, you can also trade Cardano CFDs on derivatives platforms such as Libertex, Capital, Plus500 and and CryptoRocket.

The brokers below were selected and carefully reviewed as the best platforms to buy Cardano or margin trade Cardano on leverage. They all have a good combination of instant-buying options, low fees and broad payment options.

How to Buy Cardano – Quick Guide to the Best Brokers for Buying Cardano in December 2022

Do you plan to buy Cardano right now? If yes, you can follow the four quickfire steps outlined below to get started.

1. Open an account: You’ll first need to open an account with a trusted cryptocurrency broker. We recommend eToro, as the platform is heavily regulated, supports multiple deposit options with low fees.
2. Upload ID: As a regulated brokerage site, eToro requires investors to upload a copy of your government-issued ID.
3. Deposit: You can now deposit funds with a debit/credit card, Paypal, Neteller, Skrill, or a bank wire.
4. Buy Cardano: Search for ‘ADA’ and click on the ‘Trade’ button. Enter the amount of Bitcoin you wish to buy ($25 minimum) and confirm the order.

You will now have Cardano in your eToro portfolio. You can decide to keep your Cardano funds in your physical crypto wallet or leave it on the eToro platform until you’re ready to cash out.

How to Buy Cardano – eToro Tutorial

This section examines a comprehensive walkthrough on how to purchase ADA online most safely and cost-effectively possible using eToro.

Step 1: Open an Account

The first and most obvious step is to open an account on eToro. This process takes less than 10 minutes to do. First, visit the eToro website and look for the ‘Join Now’ button. You’ll see a signup box similar to the image below. From there, you’ll enter your details, including your first and last name, email address, phone number, and username and password.     

68% of retail investor CFD accounts lose money. Invest responsibly.

You will then be asked for additional personal information on the next page, such as your country of residence, home address, date of birth, and national tax number. eToro will then send an SMS to your mobile phone. To complete your registration, enter the code that eToro sends you when prompted.

Step 2: Upload ID

eToro is regulated by several authorities. As such, you have to pass through the know-your-customer (KYC) protocol. This means your identity would be verified before you’re allowed to trade on the platform. You can complete this step at a later date – but it does need to be done before you can:

• Deposit more than $2,250
• Make a withdrawal

With this in mind, it’s best to quickly upload the required documents now to avoid any delays in the future.

This requires a copy of your:

• Passport, driver’s license, or national ID card
• Utility bill or bank account statement issued within the last three months

In most cases, eToro will authenticate your documents straight away and subsequently remove all account restrictions.

Step 3: Make a Deposit

eToro doesn’t offer direct Cardano purchases – meaning that you will first need to deposit some funds before you can buy ADA. The platform provides instant crediting of deposits into your account except when you use a bank transfer option.

You can choose from:

• Debit/credit card (Visa, MasterCard, Maestro)
• Paypal
• Skrill
• Neteller
• Local bank transfer (country-specific)
• International bank wire

In terms of fees, eToro charges just 0.5% on deposits – irrespective of the payment method. This is much cheaper than some of its main competitors, with the likes of Coinbase charging 3.99% to buy Bitcoin with a debit card.

Furthermore, if you are a US resident depositing funds with a USD-backed payment method, there is no transaction fee at all. In terms of the minimum deposit, this stands at $50 for US residents and $200 for other countries.

Step 4: Search for Cardano

Now it’s time to buy ADA. Head over to the search bar and type ‘ADA’ into the search box at the top of the page.

Then, you’ll need to click on the ‘Trade’ button to open up an order box.

Step 5: Buy ADA

You can now buy ADA by entering the size of your stake into the ‘Amount’ box($25 minimum).

Finally, click on the ‘Open Trade’ button to complete your investment.

Where to Buy ADA

As the price of Cardano rises, so does the number of options where you can buy ADA. This is in contrast with what was applicable years back. With so many options, it might be difficult to choose. To save you from the headaches, we’ve profiled some of the best platforms where you can buy Cardano.

1. eToro – Overall Best Place to Buy Cardano

eToro is arguably the world’s top brokerage service. The service is popular for several reasons, primarily its support for multiple asset classes. You can trade almost anything on eToro – stocks, commodities, exchange-traded funds (ETFs), and even cryptocurrencies.

The exchange, founded in 2006, is registered by several tier-1 jurisdictions – including the British Financial Conduct Authority (FCA). The platform supports over 50 cryptocurrencies, including ADA. So, you can buy and sell the asset easily, and you can even trade it and make price speculations.

eToro also has a user-friendly interface to ease trading. You can trade commission-free on the platform, and there are no fees for making deposits. All you have to pay is a $5 withdrawal fee, and you’re ready to roll with eToro. Besides the trading capabilities, eToro offers Cardano staking for customers. This service is in full-auto mode, and eToro spares the user of all the complex stuff. In exchange, the exchange receives a cut of your monthly rewards to cover the costs of staking. The fee charged by eToro depends on the level your account is on eToro membership.

eToro’s minimum deposit of $50 is pretty low, and the platform offers several payment methods for you to choose from. Other impressive features include Copy Trading, which allows you to copy the trades of some of the most popular traders on eToro. Its security is also top-notch.

Pros

• Offers copy trading
• A beginner-friendly interface
• Low minimum balance

Cons

• Charges an inactivity fee
• Not available in all U.S. states

68% of retail investor CFD accounts lose money. Invest responsibly.

2. Capital.com – Trade Cardano CFDs Commission-Free

Capital.com is one of the most notable platforms for trading contracts for difference (CFDs) globally. A CFD is an agreement to pay the difference between the current price of an asset and its value when the contract expires. It doesn’t offer direct exposure to ADA, but it allows you to trade on its price nonetheless.

Capital.com is regulated by the FCA and the Cyprus Securities and Exchange Commission (CySEC). You can use the platform to trade ADA CFDs, speculating on the asset’s price in the medium or long term.

The exchange has a minimum deposit of $20, which is even lesser than eToro’s. But, note that you need to pay at least $250 for bank transfers. The service doesn’t have any inactivity fees or other hidden fees, and its platform is relatively easy to use. Account opening on Capital.com is pretty efficient – you can get set up in just a few minutes if you have all your details.

Pros

• Various payment and deposit options are available
• Quick account opening process
• Impressive customer support

71.2% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.

3. Libertex – Industry-Leader Broker for Stocks and CFDs

Libertex is another service that offers exposure to cryptocurrencies via CFDs. The only difference here is that, unlike Capital.com, Libertex offers exposure to other financial instruments as well. Libertex has a long history of operating, with the platform launching in 1997. The CySEC regulates it and allows the platform to trade assets like bonds, ETFs, and cryptocurrencies.

Margin traders especially love Libertex as it offers up to 1:600 leverage for their trading activities, increasing their profitability chances significantly. However, it also puts them at higher risk.

With Libertex, users get access to a proprietary, web-based trading platform that is quite sleek. Its user-friendliness is impressive, and it operates completely online without a need for downloads. Of course, you could always choose from MetaTrader 4 or MetaTrader 5 if you want to go with the old-but-gold.

Libertex has eliminated all deposit and withdrawal fees. There are no hidden costs, although the minimum deposit of $100 seems a bit high. You can make deposits and withdrawals through several channels, so feel free to explore your options. Just keep in mind that many of these channels have fees of their own.

Pros

• Offers high leverage
• Regulated broker service
• Withdrawals processed in about 24 hours

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Cons

• Relatively clunky interface

Your Capital is at risk.

4. Plus500 – Regulated Platform Offering Different Asset Classes

Plus500 is a CFD broker that has been operating since 2008. The platform has grown over the years, with licenses from agencies like the FCA and the Australian Securities and Investments Commission (ASIC). Plus500 is even listed on the London Stock Exchange. Like Capital.com, Plus500 allows you to trade just cryptocurrency CFDs and has an expansive range to choose from. There are over 2,000 financial instruments here, including a broad range of cryptocurrency CFDs for you to trade with.

Plus500 offers features like an intuitive user interface, no fees for deposits or trading, and even negative balance protection for your account. The platform also has some of the most extensive research and educational tools of any brokerage platform.

Minimum deposits on Plus500 stand at $100, which is a bit high. The exchange charges an inactivity fee of $10 after three months of no usage. You should also note that Plus500 doesn’t serve users in every U.S. state.

Pros

• Impressive regulatory credentials
• Intuitive user interface
• Negative balance protection

Cons

• Charges an inactivity fee

Your Capital is at risk.

5. Coinbase – Top US Crypto Exchange

Coinbase is the most popular cryptocurrency exchange in North America. Started in 2012, the company has grown to be the second most widely used globally, with billions in daily trading volumes per CoinMarketCap. Its operations span most of the developed world, and the company is even listed on the NASDAQ exchange.

As a top crypto exchange, Coinbase supports trading in over 100 digital assets – including ADA. You can trade ADA against several fiat and digital currencies on the platform, taking advantage of its impressive layout and user interface. Besides trading, Coinbase also offers several remarkable benefits. You can stake your coins to earn more over time, and there’s even a Coinbase Card that allows you to spend your cryptocurrency at retail outlets.

Coinbase offers a low minimum account balance of just $2. Compared with many crypto exchanges, this is very competitive. The exchange is available to new and sophisticated traders alike, and you unsurprisingly get a broad range of deposit and withdrawal methods.

However, the platform has a complex fee structure, with transaction costs ranging between 1.5% and 4.5% based on several factors – including your desired platform, the currency type and others.

Pros

• Broad currency portfolio
• Impressive suite of services
• User-friendly interface

Your Capital is at risk.

6. Binance – World’s Largest Crypto Exchange

Binance is the world’s largest cryptocurrency exchange by daily trading volumes. It is also the most popular in the world, offering services in over 150 countries.

While it doesn’t offer exposure to other asset classes, Binance is impressive when it comes to crypto. The exchange offers a low minimum balance of $1, and trading commissions are charged at a flat rate of 0.1% on your gains. So, Binance doesn’t make money until you do. If you’re a professional trader, you can also access cryptocurrency futures and options on Binance as well.

Deposit and withdrawal options are very broad on Binance, as expected. You don’t pay any deposit fees, although withdrawal fees can be pretty high – especially for card-based transactions. Binance is also not regulated in the United States, and while it has a U.S.-facing arm, even that isn’t available in all states.

Pros

• High liquidity
• Broad transaction channels
• Advanced trading options available

Cons

• Not available across the U.S.
• Pretty clunky interface

Your Capital is at risk.

7. AvaTrade – Legacy Crypto Trading Platform for Investors

AvaTrade is a forex and CFD broker. The service has been operating since 2006, and it is part of the Australia-based financial conglomerate Ava Group. AvaTrade is incorporated in the Republic of Ireland. But, it also has outlets in Japan, Australia, South Africa, Canada, and the British Virgin Islands.

While it isn’t the most popular for crypto, AvaTrade offers several benefits. You get a broad collection of cousins, as well as outstanding education and research tools. The platform offers a quick and fully digital account opening process that shouldn’t take you more than a few minutes. Plus, you get a top-notch user experience and compatibility with different platforms.

Then, there is AvaOptions – a proprietary platform for retail forex and CFD options trading. Options are getting more popular in the crypto market, and AvaTrade offers a simple way to get into these instruments.

But, it’s not all good. AvaTrade offers a minimum deposit of $100, which is quite high. The platform’s fee structure is also quite complex, especially if you’d like to trade cryptocurrency CFDs. The platform also charges a pretty high inactivity fee of $50 quarterly after your first three months of no usage. After a year of non-use, AvaTrade will charge an annual administration fee of $100.

Pros

• A regulated broker service
• Great for beginner traders
• Dedicated options trading platform

 

Cons

• Complex fee structure
• High inactivity fee

Your Capital is at risk.

8. Revolut – Personal Financial Banker with Crypto Support

Revolut is one of the most popular financial services providers globally, offering top-notch transactions and currency services. You don’t get the usual trading services with Revolut. When it comes to crypto, the service gives you the basics – transactions and payments. The company has a history dating back to 2015, and FCA now registers it.

Revolut’s primary benefit is its impressive interface which allows you to get used to it pretty quickly. The service has exposure to several currency pairs, and it offers a debit card that will enable users to spend cryptocurrencies at merchants worldwide. There’s even a savings vault that allows you to save your money and earn interest on it. When it comes to banking, only a few FinTechs match Revolut.

As for its drawbacks, the lack of trading services is the most striking. Revolut also imposes many fees – transaction fees, card maintenance fees, SWIFT transfer fees, etc. With different pricing tiers available, the fee structure is as complex as you’d imagine.

But, note that withdrawals are free for up to €200/£200 a month. From there, the service charges a 2% fee for every withdrawal.

Pros

• Supports different currencies
• Impressive banking features
• Offers a debit card for payments

Cons

• Too many fees to deal with

Your Capital is at risk.

9. CryptoRocket – New Crypto Trading Platform and Exchange

Launched in 2018, CryptoRocket is quite an interesting service. As the name suggests, it started with a focus on cryptocurrencies alone. But, it has since expanded and now supports trading in different asset classes – from stocks to ETFs and bonds. CryptoRocket is based in St. Vincent and the Grenadines. As you would expect, the service offers the basic benefits – broad asset exposure, no fees on deposits and withdrawals, and even commission-free trading when you use its LiveTrader feature.

Margin trading is also available for sophisticated traders on CrytoRocket. The service offers up to 1:1,500 leverage for margin traders, improving their profitability chances – and also their risk exposure. There are no minimum deposits on CryptoRocket, although the service has a minimum withdrawal of 0.01 BTC – or its equivalent.

Trading commissions on the normal interface start from $6 per lot, which seems a bit high. Also, many investors have issues with CryptoRocket’s limited regulatory information.

Pros

• Impressive educational tools
• Commission-free trading available
• High leverage for margin traders

Cons

• Not available in the U.S.
• Not registered with any tier-1 jurisdiction

Your Capital is at risk.

10. Changelly – Nifty Exchange for Instant Cardano Purchases

Based in Hong Kong, Changelly has become popular for being an instant cryptocurrency exchange. It has been operating since 2013, although it isn’t regulated by any tier-1 jurisdiction just yet. With Changelly, you will have access to over 170 cryptocurrencies and trading pairs. The platform is simple to use, and you get support for some minor currencies as well. So, regardless of where you are, you’re welcome to try it.

The primary benefit of Changelly is its instant exchange service, which lets you move from one coin to another in seconds. The platform also offers some amazing educational and research tools, and you can make deposits and withdrawals using different channels.

As for fees, you’ll find Changelly’s offering to be quite competitive. Crypto swaps on the exchange go for a flat rate of 0.25%, while crypto-to-fiat conversions carry a 5% charge. Trading fees vary between assets, but Changelly doesn’t charge any deposit fees. As for withdrawal fees, everyone pays a flat rate of 0.0004 BTC or its equivalent.

Pros

• A non-custodial exchange
• Impressive user interface
• Quick transactions

Cons

• No margin trading
• Non-regulated exchange

Your Capital is at risk.

What is Cardano?

Cardano is a high-performance blockchain platform that has become incredibly popular in 2021. The blockchain has positioned itself as one of the most prominent “Ethereum killers” – essentially, blockchains that look to steal Ethereum’s market share and become bigger than the blockchain behemoth.

Cardano operates as a decentralised proof of stake (PoS) blockchain that offers higher efficiency in processing and app development. The platform looks to improve the interoperability, scalability, and sustainability of proof of work (PoW) blockchains like Bitcoin and – for now – Ethereum.

The Cardano blockchain was developed by Input Output Hong Kong (IOHK) – a Hong Kong-based blockchain firm founded by Ethereum co-founder Charles Hoskinson. During his time at Ethereum, Hoskinson had gotten a proper grasp of the challenges facing blockchain platforms all over the industry. He started developing Cardano and its ADA cryptocurrency in 2015; the platform and token were eventually launched in 2017.

Since its launch, Cardano has positioned itself as a much better alternative to Ethereum. Both platforms are very similar, and they look to build an interconnected, decentralised system. But, as IOKH puts it, Cardano is more advanced than its predecessor.

Amongst other things, Cardano’s primary function is identity management and traceability. The former function allows Cardano to streamline and simplify the processes that require multi-source data collection. As for the latter, Cardano allows users to track and audit product movements across supply chains. This way, the blockchain helps to reduce the use of counterfeit products across the world.

Cardano has also stepped up its efficiency thanks to the launch of smart contracts. The blockchain launched its Alonzo hard fork in September 2021, bringing smart contracts to its features; this means that developers can now build decentralised applications (dApps) on Cardano – much like they do on Ethereum and other chains.

Why Buy Cardano? ADA Analysis

ADA already is one of the most popular cryptocurrencies in the market. The asset has delivered impressive results recently, with its price up by 80.3% in the past quarter alone.

As expected, ADA’s move is tied to growth in the Cardano blockchain. Thanks to Alonzo’s implementation, developers have been quick to build on the chain. Data from the Vercel app shows that over 2,000 smart contracts have already been created on Cardano in less than a month since Alonzo was announced.

Source: Coinmarketcap

Last month, renowned DJ Paul Oakenfold even confirmed that his next album – titled “Zombie Lobster” – will be launched as a non-fungible token (NFT) on the Cardano blockchain. The Grammy Award nominee will be looking to tap into some of the benefits of NFTs for musicians, and he has chosen Cardano to be his platform of choice.

Increased adoption like this only serves optimism that Cardano will be ready for a push soon enough. Once the market gets back to its bullish ways, ADA will be one of the top coins to look out for.

Is it Worth Buying Cardano in 2021?

ADA has had quite an impressive year. The asset has always been a large-cap coin, but 2021 saw massive growth for it. After starting the year trading at $0.17, the coin rose thanks to the market rally and hit successful highs. By May 16, ADA had hit $2.45 – a jump of over 1,300% since the start of the year. But, the downturn hit ADA pretty hard. In just five days, the asset’s price dropped by 57.3% to $1.045. Through several bearish cycles, the asset eventually hit a bottom of $0.995 on June 22.

Even though that was its bottom, ADA never really saw any more jumps. Its rally started in August like many other coins, with news of the impending Alonzo hard fork eventually causing ADA’s price to surge. Between August and right now, ADA has delivered 60.5% gains for investors. The asset has hit a new peak of $3.097, and it is now the third most valuable cryptocurrency in the world. Year-to-date, the asset is still up 1,142%.

Ways of Buying Cardano

If you want to buy Cardano, there are several methods to do this:

Buy Cardano with PayPal

With over 30 million customers worldwide, PayPal is a top payment processing company. The US company has recently added support for cryptocurrencies on its platform. You can buy Bitcoin and Ripple with PayPal, for instance. Meanwhile, if you want to buy Cardano on an exchange with your PayPal, we recommend using eToro. You only get charged 0.5% for a deposit which is little compared to 4% in some exchanges.

Buy Cardano with Credit Card

Another means to buy Cardano is through your credit card. However, you will need to speak with your credit card issuer to know how much in fees you will have to pay. Some credit card companies define crypto transactions as a “cash advance” and charge 3 to 5% of your transaction.
Another thing to consider is if the exchange supports credit card purchases. Some regions or locations are supported for credit card transactions.

Buy Cardano with Debit Card

Buying Cardano with a debit card is one of the most convenient and cost-effective payment options to use. Meanwhile, you will need to take your broker’s processing fee into cognisance if you intend to use this method. Crypto exchanges have different payment processors and charge differently as well. Some may bill 4% of the total debit card payments, while others may be much lower. eToro offers a more cost-effective debit card purchase fee, and you can fund your account while paying only 0.5% of the total transaction.

What to Remember Before Buying Cardano

While ADA appears to be a unique asset to add to your portfolio, it’s important to consider some caveats. Keep the following in mind as you step into the market:

Markets are volatile

The most important thing to remember as a prospective investor is that the crypto market is very volatile. Prices jump and drop from time to time, so losses on your investments are possible. You want to do your research and ensure that you’re investing in a solid project.
Thankfully for you, ADA is as solid as any crypto project is. The coin has real value, and its associated blockchain is also very impressive.

ADA isn’t so private

Transactions using ADA aren’t private. So, don’t buy the coin believing that you’d get any privacy benefits. Several other assets will be much more suitable to you – such as Monero (XMR), ZCash (ZEC), etc.

Choosing the Right Cardano Broker

To buy ADA, you need to have a broker or an exchange platform. There are so many options available, so choosing one can be a bit of a chore. But, consider these factors when selecting.

Compatibility

As expected, your ADA broker will need to be compatible with the coin, and the platform should support the currency and offer seamless transactions.

Fees

You want a brokerage service that doesn’t charge so much. Check out their fee structure – for withdrawals, deposits, trading, etc. You should also look into whether there are any hidden fees – account maintenance, inactivity fees, etc.

Ease of use

User-friendliness is an important part of choosing a cryptocurrency brokerage service or exchange. Dealing with cryptocurrencies can be challenging, and you need a platform that makes the process so much easier for you.

Security

Your chosen broker should be as secure as possible. They’re handling your funds, and you don’t want to lose money. So, check out features like fund storage, encryption, etc. All of these will come in handy when you make your purchase.

Customer Support

Customer support should be available at all times. Look into their channels and how quickly they respond to complaints and Emails. No one anticipates any problems, but it helps to know that there’s someone available to help you.

Payment Channels

Look into the broker’s payment channels and how you can find your account – or receive funds when you withdraw. Can you use them? What are the fees? This will help you to choose wisely.

Transaction Speed

Your preferred broker should be able to make transactions quickly enough. This way, you don’t risk delays when trying to buy or sell.

Investing in Cardano vs. Trading Cardano

People looking for crypto exposure tend to either invest or trade an asset. Both strategies have their merits and demerits, of course.

When you invest in ADA, you purchase the coin and hold it for a long time – usually months or years. This means that you expect its price to jump in the long term, and you’re willing to ignore short-term price movements and hold your position.

Investing is advantageous because you don’t get to bother much about the market. While you need to keep an eye on the coin from time to time, you’ve got the long game in mind, and you’re not worried about small swings. Also, with ADA being backed by a strong project in Cardano, you have a higher chance of netting those long-term gains you’re looking for. Just consider the coin’s year-to-date performance in 2021, and you can see.

As for trading, you’re making speculative decisions based on the coin’s short and medium-term projections. Trading allows you to benefit from ADA’s price volatility, and it could be a massive earning opportunity for you. But, you also have to keep a constant eye on the market and make moves based on its direction. This way, you know when to enter and exit the market to maximise your gains.

Buying Cardano as a CFD Product

Contract for differences (CFD) is a financial contract that has become increasingly popular due to its merits. Like several other crypto assets, Cardano can also be traded as a CFD product. A CFD is essentially a contract agreement between an investor and a broker to trade the difference in the value of a financial product (most times securities or derivatives). Advanced traders mostly use cFDs given the absence of storing the asset, ease of execution and the intrinsic ability to go long or short in a particular trade.

Employing a CFD trading strategy ensures that you profit from the price swings of Cardano while not directly holding the asset. Although several brokers offer CFD trading capabilities, eToro is a top CFD broker with a healthy stock of crypto assets. The social trading platform is also regulated and has super-low fees.

Taxation on Cardano Earnings

Taxation is a key part of any financial transaction, and investors are required to pay a fraction of their gains. The crypto space has gained a sizable relevance, and government agencies like the US Securities and Exchange Commission (SEC) are exploring ways to regulate the nascent industry. Aside from the SEC, the Internal Revenue Service (IRS) is also working on a crypto tax framework.

According to the tax agency, cryptocurrencies are considered as properties and therefore can be treated under the capital gains bracket. Meanwhile, there are particular circumstances that crypto trades are taxed under the income. This section will explore some of the occasions that will require you to fulfil your tax obligations while participating in the crypto market.

Taxable events that qualify for capital gains tax:

• Paying for goods and services with crypto
• Exchanging one digital asset for another on an exchange or peer-to-peer (P2P)
• Swapping crypto for USD

Taxable situations that fall under the income tax bracket:

• Earning block rewards from mining crypto
• Receiving payment for services rendered with crypto
• Receiving a crypto airdrop
• Interests earned from lending to decentralised finance (DeFi) protocols
• Newly minted crypto assets earned from liquidity pools (LPs) or staking

Despite the strict crypto tax structure, you can still write off up to $3,000 as losses from trading cryptocurrencies. This will save you some money and also keep the agency away.

Calculating Capital Gains Tax

Crypto taxes, especially in the US, largely depend on two principal factors, including the duration of owning a digital asset and your income tax bracket. With these two criteria, you should have a rough idea of how much you will need to pay in:

Short-term Capital Gains Tax

Short-term capital gains tax would come into force if you purchased crypto-assets for less than a year. This will see your crypto transactions treated under the income tax bracket by the IRS. You could pay between 15% to 37% depending on how much income you earn. Meanwhile, you can still minimise some of your potential taxes through losses.

Called Tax-loss Harvesting, this strategy allows you to write as much as $3,000 from your tax payments without incurring any penalty. This is used mostly in short-term capital gains situations as the tax rates for short-term gains are much higher than long-term tax rates.

Long-term Capital Gains Tax

Long-term capital taxes usually occur if you have been trading cryptocurrencies for a year or more. It is more tax-efficient than its short-term counterpart, and you will be taxed between 0 to 20% depending on your income bracket.

The Importance of Responsible Cardano Investment

The crypto market is seeing a lot of investors investing in digital assets to make quick money. Even though this sometimes happens, they are always far and in between. The best strategy is to build for the long term and resist the urge to follow the hottest and trending coins. Given the intrinsic risk of volatility cryptocurrencies hold, we itemise a few things to consider while you are surfing the industry:

Have an investment plan

The risks of trading cryptocurrencies are mainly related to their volatility. They are speculative, and you must understand the risks involved. We advise that you create an investment or trading plan and stick by it. Your trading plan should cover critical issues such as the kind of investment you are interested in, the conditions behind the decision, and your investment objectives. You should also factor in your risk appetite and work according to this.

This will help you depersonalise and detach yourself from the trade. Your trading plan should comprise the amount of leverage you are comfortable with, your preferred entry and exit prices for the trade, and the maximum amount you are willing to invest in a particular asset. Also, crucial issues like how diversified your portfolio reduces the impact of a potential loss and when you want to liquidate your position should feature in your plan.

DYOR

The crypto market is one of the most saturated financial markets in the world at the moment. Misinformation and fraudulent schemes are being repackaged to appeal to naïve investors. To forestall potential capital loss, we recommend that you do your research (DYOR) by validating and double-checking any information you come across to save you needless losses. No matter how appealing an investment may seem, make sure you do due diligence before financially committing.

Don’t Put Your Eggs In One Basket

The crypto market is full of great assets with good value propositions, but it is also fraught with potential bad eggs. To ensure that you do not lose your entire capital, do not hold only one or two assets because this exposes you to more risks. Try as much as possible to incorporate cryptocurrencies aside from investing in Cardano. This will require you to reassess your crypto asset allocation structure. You can also stake some of your assets as well as provide liquidity in DeFi pools.

Take Five

Take a break from trading. This will afford you time to reassess your goals and decisions. Taking time off also enables you to see the market with a clearer eye.

Would You Try Cardano Mining?

Cryptocurrencies require validator nodes or miners to solve sophisticated mathematical equations to earn block rewards. Although this system ensures security against malicious attacks, they are slower, costlier, and more energy-intensive.

This spurred the development of proof-of-stake (PoS) consensus algorithms which require validating nodes to hold a certain amount of a digital token before being selected to verify transactions on the network. The Cardano network uses a PoS mining protocol called Ouroboros, and it does not require mining as all the ADA tokens have been pre-mined.

Minimising your Risk With Crypto Investment

Given the inherent risks associated with cryptocurrency trading, we have itemised some safety tips for you as you trade Cardano:

Understand What Crypto Is

Start from the bottom and spend time knowing the details about what cryptocurrencies are. This will acquaint you with the fundamentals of investing in digital currencies. We recommend starting from this stage to avoid losing fortunes from making wrong investment decisions.

Use Reputable Exchanges only

One of the most important steps in cryptocurrency investment is ensuring that your trading account and wallet are safe.

A regulated exchange or broker offer protection from fraud. Some of the safety features you should look out for should be two-factor authentication (2FA), a whitelist address feature, and a strong password structure. Also, look for a broker that separates traders’ funds from the company’s finances. This will ensure your capital is not affected in the event of bankruptcy.

Keep FOMO at Arm’s Length

One of the issues you will deal with in the crypto space is the fear of missing out (FOMO). FOMO is an anxious feeling that you may have missed out on a profitable trade occurring elsewhere. However, entering into any market position without proper knowledge leads to major losses. Investing decisions should be based on facts, not emotions.

To make steady gains from your crypto investments, you will need to address the FOMO effect. This will require you to consider a few factors, including social media crypto gimmicks, inflated gains, potential losses from emotion-backed decisions, gossips and rumours, and how volatile the market is.

Automated Trading Robots

Given how volatile the crypto market is, several investors are now employing innovative tools to increase profits while minimising potential losses. One of the popular tools is artificial intelligence (AI)-powered crypto trading robots. AI is meant to perform trading activities with little human intervention. These trading robots can set limit orders like stop loss and take profits. Their objective trading strategy is void of human emotions, and investments are only made with facts.

Some of the best-automated robots can simultaneously scan thousands of key technical and fundamental indicators to get a wider picture of the market conditions and identify the most profitable trading ideas.

We reviewed some of the best crypto trading robots that can give you the advantage you need in the cryptocurrency markets.

Best Cardano Wallet

Much like every item, cryptocurrencies need a place to be stored. As virtual, the only means of safeguarding your crypto funds is with crypto wallets storage software that is accessible via mobile app or desktop software. You can also utilise a dedicated hardware device to store your ADA tokens. We explore the best Cardano wallet to store your digital assets below:

eToro Crypto Wallet

The eToro Money crypto wallet comes with state-of-the-art security measures to secure your crypto funds and details. It is further regulated by the Guernsey Financial Services Commission (GFSC). Accessible on both Android and iOS devices, the eToro crypto wallet comes with a password recovery feature in the likelihood that you lose your private key.

It allows the storage of over 120 virtual currencies with Bitcoin and Ethereum also on retinue. You can also buy and sell over 500 different crypto pairs without using a third-party app.

Given its ease of use, the eToro crypto wallet is ideal for beginners. However, more experienced traders can also access more sophisticated features on the digital wallet.

Cardano Against Other Cryptocurrencies

Although Cardano ranks in the top five most valuable crypto assets by market cap, it is not the only popular digital asset.

Cardano vs Bitcoin

Bitcoin is the most recognised cryptocurrency in the market and the precursor to the Cardano network. Bitcoin’s hard-cap limit of only 21 million tokens has seen several investors term it as digital gold. It also controls the largest share of the crypto market, with almost 50% of the market cap attributed to the benchmark crypto.

Cardano vs Ethereum

Much like Bitcoin, the Ethereum blockchain is viewed as a frontrunner for the rapidly expanding DeFi ecosystem. The decentralised applications (dApp) facilitator is home to over 3,000 top-performing dApp protocols and has a 20% stake in the crypto market. Its eventual switch to a PoS consensus model is expected to boost the value of the ETH token.

Cardanovs. Solana

Like Cardano, Solana is a popular ‘Ethereum killer’ and seeks to enable widespread DeFi services. Its PoS and PoH timing mechanisms makes Solana one of the fastest dApp facilitators in the blockchain ecosystem. Solana is also cost-effective and energy-efficient, and this has attracted several dApp protocols in the last year.

Cardano vs Dogecoin

Dogecoin was created in 2013 as a reaction to the sudden spike in crypto projects. Meant to be a joke currency for tipping users, Dogecoin has since outgrown its original vision. It is now touted as a more decentralised and viable virtual currency than Bitcoin by the likes of Tesla boss Elon Musk.
This past year, Dogecoin has seen exponential growth in its protocol, with more investors adding DOGE to their portfolio.

Cardano vs XRP

Unlike several crypto protocols, XRP is a digital token focused on the cross-border payment niche. Created by Ripple Labs, XRP is used by top financial institutions to settle trades in a trustless manner. XRP has been one of the best performers this year despite facing a legal suit with the SEC. The digital asset is gradually pivoting to the central bank digital currency (CBDC). The Royal Monetary Authority of Bhutan was the first to adopt the XRP Ledger for building a digital version of their fiat.

Where Does Cardano Go From Here?

It can be difficult envisaging a good ending for a particular asset in the highly competitive crypto space. This is even more peculiar given that the Cardano network is faced with top rivals like Ethereum, Solana, Polkadot, Avalanche, Fantom, and several others.

However, the Cardano network’s scientific approach to addressing the blockchain trilemma of scalability, security, and interoperability has been highly applauded. The peer-reviewed protocol has also been consistent with its deployment of functionalities, which is hard to say about the Ethereum protocol. Given the extensive knowledge and expertise of the development team, the Cardano network is expected to become one of the DeFi stars in the evolving space.

Update – read our latest Cardano price prediction here. ADA hit $3.1 in Q4 2021, before correcting 30% to re-test the $2 level.

If you have decided to buy Cardano, we recommend using eToro. The popular social trading platform is ideal for both beginner and advanced traders. eToro has super-low fees, thereby allowing traders more purchasing power. It is also regulated by top global bodies like the FCA, ASIC, CySEC, and FINRA. This means your funds and details are always secured.

Meanwhile, you should be reminded of the following safety tips:

• Diversifying your portfolio helps mitigate risks
• Cryptocurrencies are risky and also profitable
• Always follow a trading plan
• Keep FOMO at bay while trading
• Only trade on regulated exchanges or brokers
• Use review websites and online experts to know how cryptocurrencies

eToro – Our Recommended Cardano Platform

• Monthly Staking Rewards for Holding Cardano (ADA)
• Free Secure ADA Wallet – Unlosable Private Key
• Regulated by FCA, ASIC and CySEC – Millions of Users
• Copytrade Profitable Cardano Investors
• Buy with Credit card, Bank wire, Paypal, Skrill, Neteller, Sofort

68% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

How do you buy Cardano?

There are several options you can explore in buying Cardano. However, the safest is with a broker.

Should I Buy Cardano?

Buying Cardano largely depends on you. However, the digital asset has proven itself over time as a top crypto asset.

What is the best way to buy Cardano?

The best way to buy Cardano is through a broker. One of the best brokers is eToro. The social trading platform is ideal for both beginners and more experienced traders, and it has super-low fees. Also, you get to enjoy multiple payment methods as well as handy trading tools.

How does Cardano work?

The Cardano network uses a PoS protocol called Ouroboros, which divides transactions into epochs or timeframes. Validator nodes are chosen randomly to verify transactions and add them to the blockchain.

Is it safe to buy Cardano?

Even though Cardano is a crypto asset, the digital currency is a relatively safe investment.

How do I make money with Cardano?

The two popular option is to invest or trade Cardano. However, you can also earn passive income through staking your Cardano asset.

What are the benefits of buying Cardano?

Cardano is billed as one of the principal characters in the rapidly-growing DeFi and NFT sub-sectors. With the platform seeing growing adoption, its governance token ADA has surged more than 11,000% in the past year.

What are the best payment methods to buy Cardano with?

We recommend using your debit card. However, e-wallet options like PayPal, Skrill and others are also recommended, especially on eToro.

What are the best Cardano brokers?

We have covered several platforms that support Cardano trading. However, we recommend using either eToro or Binance due to their reputation in the investment services sector.

How can I buy Cardano instantly?

The first step is to open an account with a regulated broker and follow the KYC protocol. Once this is done, you can make a deposit and buy Cardano on the spot.

How can I buy Cardano with USD?

The best means is to use a reputable exchange or broker like eToro.

What are the taxes on trading Cardano?

Crypto taxes are largely dependent on the region where you reside. However, for US residents, we have highlighted a few criteria for crypto taxes in this guide.

How much is Cardano worth?

At the moment of writing, 1 ADA trades at $2.28.

How do you mine Cardano?

As we stated earlier, Cardano token ADA cannot be mined as the network uses a newer version of the consensus algorithm named PoS.