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Only a decade ago, the concept of cryptocurrency was relegated to the domain of science fiction. Today, however, it is rapidly becoming a realistic financial option. Not too long ago, getting your hands on cryptocurrencies meant signing up for a service that provided an electronic wallet and then visiting a specialized market to trade in your fiat currency for cryptocurrency. Today, it is much different. There has never been a more convenient time to start investing in cryptocurrency as more and more traditional financial institutions include it in their product lines. Signing up for a cryptocurrency-only provider like Coinbase is no longer necessary. Users may now sign up for a comprehensive financial service like SoFi Financial, which includes checking, savings, and investing accounts, and purchase cryptocurrencies directly from their account. If so, how challenging is this procedure? Do you wonder how to buy crypto on SoFi Invest? Read further to learn more.
How to Buy Crypto on SoFi Invest
First, you need a SoFi Invest account to get started investing, and you can only fund it with fiat currency via a bank or a Western Union cash deposit. After this is completed, the account holder can instantly buy cryptocurrencies using either the full coin value or a fiat currency equivalent. Thereafter, the user’s SoFi Invest dashboard will reflect the coin amount.
When the time comes to cash out, the customer receives USD in their trading account, which may then be used to acquire fiat currencies or other traditional assets. Cryptocurrencies can be bought and sold at any time, unlike equities and bonds, which are only available when the stock market is open. Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), and Litecoin (LTC) are all examples of tradable cryptocurrencies on SoFi Invest.
Costs and Limitations
There is a daily cap of $100,000 and a minimum purchase of anything from $1 to $10, depending on the cryptocurrency. The cryptocurrency market is growing in popularity and respectability as an investment option, although several governments prohibit cryptocurrency trading on exchanges. If you are located outside of the United States, you should verify the legality of cryptocurrency trading in your home country. Crypto dealing is permitted in every US state. SoFi Invest will charge a markup of up to 1.25% on crypto transactions.
Crypto gained popularity due to Bitcoin’s meteoric rise a few years ago, going from a value of only a few dollars to several thousand within a short span of time. As the price of the cryptocurrency skyrocketed, investors hurried to buy it. Bitcoin, like any overextended investment, plummeted hard, and many people lost everything. An individual should keep a few factors in mind before putting money into cryptocurrency:
- It’s completely digital. There is no tangible asset to claim as your own and no official documentation of ownership (as with stocks).
- It’s decentralized. Cryptocurrency is not monitored by any government agency, and it is not insured.
- It is not dependent on the economy. Cryptocurrency, unlike stocks, whose value goes up and down based on how much demand there is for the company’s goods, is only driven by demand and how much people think it’s worth, which can quickly change in either direction at any time.
Cryptocurrency is a very volatile, and yet potentially lucrative, investment. It is likely that cryptocurrency will continue to enter the mainstream and gain in value as technology advances and as more traditional retailers and institutions begin accepting crypto as a form of payment. However, investors should not forget that cryptocurrencies are influenced by forces that are vastly different from those of more conventional investments, and that they should always account for the additional dangers that come with cryptocurrency trading. Although cryptocurrency may not be a good fit for a long-term investing strategy, it does have the potential to yield rapid riches in the short term. If you have questions about how to buy crypto on SoFi Invest, SoFi offers an extensive FAQ page on the topic.
1. If a customer has cryptocurrency in their SoFi Invest account, can they move it to another wallet?
Not at this time. SoFi is not confident in the security of cryptocurrency transfers between wallets because of the strong demand for cryptocurrencies such as Bitcoin, Litecoin, and Ethereum, which encourages fraud. They would rather exclusively provide cryptocurrency investments within SoFi’s private and protected ecosystem.
2. Does a crypto investor have to pay taxes on their trades?
Transactions using cryptocurrencies are now subject to taxation in the United States. The IRS classifies crypto as property rather than currency, and sales of crypto are taxed based on the difference between the purchase price and the sale price. You are not taxed on crypto losses, so if you exchange crypto for payment or goods, you are taxed if the value increases from the purchase price.
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