What to keep in mind when buying, bitcoin
trading Bitcoin in the UAE.
Bitcoin, considered the most liquid cryptocurrency, involves accessing a cryptocurrency exchange that allows UAE residents to open accounts and trade using them. Among other cryptocurrencies, Bitcoin is one that is universally accepted and btc
works for crypto the purchase of virtually all cryptocurrencies.
Cryptocurrency: Always wanted to learn, here’s everything you need to know UAE investors keep finding downsides to crypto investments UAE investors keep finding downsides to crypto investments.
Choosing a secure Bitcoin wallet.
But before you buy Bitcoin or any other cryptocurrency for that matter, it's crucial to have a secure form of storage. Popular hardware wallet choices among UAE residents include the likes of Ledger Nano S or the Trezor. Cold storage hardware wallets are widely accepted as the ideal way to protect your coins.
Many Bitcoin exchanges offer built-in wallets, but they're centralised and as a consequence, vulnerable to theft. Once you have chosen a reliable wallet, the next steps involve choosing a suitable cryptocurrency exchange that involves verifying your identity for some transactions, which varies with each broker as detailed below, and finally buying and trading Bitcoin.
While buying Bitcoin in the UAE is easy, what matters most is the broker or exchange you select. Opening an account at a cryptocurrency exchange is the first step to buying Bitcoin in the UAE. You must also get a crypto wallet to store your Bitcoins, make purchases and receive gifts.
However, let’s first walk through what one should weigh when choosing a suitable cryptocurrency trading platform in the UAE, in detail.
Choosing a suitable cryptocurrency trading platform.
Multiple UAE-based cryptocurrency exchanges offer bitcoins, as well as a number of other digital currencies. Analysts cite low tax rate, regulatory environment and political stability, as reasons why a number of exchanges and digital currencies base themselves in the Emirates.
Additionally, official support for cryptocurrencies makes bitcoins an attractive investment, although their values can fluctuate dramatically relative to national currencies.
You can use local exchanges or select one of the many international exchanges that accept accounts from the Emirates. In addition, sites such as localbitcoins.com publish local buyers and sellers in the UAE, along with payment methods and bid and offer prices.
Many Middle East-based investors may prefer to use a regional cryptocurrency exchange, rather than one based in countries such as the US or Europe. Many foreign-based exchanges, such as the US-based CoinBase, don’t allow people based outside of certain geographic areas to trade on their platforms.
Will bitcoin stage a blockbuster comeback? Image Credit: Gulf News archive.
Here are a few UAE-based and international cryptocurrency exchanges that accept accounts from UAE nationals and residents, and a brief overview about each of them, and what to keep in mind about each:
BitOasis, founded in 2015 and based in Dubai, is one of the largest cryptocurrency exchanges in the Middle East, particularly for trading Bitcoin, among other cryptocurrencies it avails the option to trade. BitOasis allows transactions in USD and AED as well as the use of local credit cards, while also providing an option for users to store cryptocurrencies on its platform through online web wallets.
Keep in mind that the exchange requires a minimum deposit of Dh300 that can be accepted via bank transfer or cash deposit. Apart from the UAE, it is also accessed in Saudi Arabia, Oman, Qatar, Kuwait, and Bahrain. UAE clients may also deposit funds via exchange houses.
While the platform is considered among the most popular means to buy Bitcoins in the countries it services, some of the other perks include multi-signature security measures, which requires more than one signature to transfer funds – enhancing security.
Moreover, while there are no registration fees, but users will be charged a 0.5 per cent flat fee to deposit, withdraw and trade, on all orders, vital to note that verification is not required for amounts below $500 (Dh1,836) per week. However, for amounts above the week limit of $500 (Dh1,836), transactions are no longer private since identity verification is required.
Among the newer cryptocurrency exchanges, Palmex – established in 2018 – is also based in Dubai. While the website claims site claims comparatively better security standards and minimal trading fees, the firm does not accept fiat currency for deposit, so you must open an account with Bitcoin or other accepted cryptocurrencies.
Fiat money is a government-issued currency that isn't backed by a commodity or any underlying asset. It is a currency established as money by government regulation that does not have any intrinsic value.
What this means is Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.
Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the US dollar, are fiat currencies.
When using Palmex, the ‘ Taker ’ fee is 0.40 per cent upto $200,000 (Dh734,598) trading volume for Bitcoin, while the ‘ Maker ’ fee is 0.25 per cent for trading volume upto $200,000 (Dh734,598).
What are Maker and Taker fees?
When a market charges Taker and Maker fees, they differentiate whether you're increasing the size of the order book or decreasing the size of the order book.
When you create an order that is immediately matched with already existing orders, you're a Taker because you take liquidity from the market. When you add an order that doesn't match existing offers, you add liquidity to the market and are charged a Maker fee.
While a trade order gets the Maker fee if the trade order is not matched immediately against an order already on the order book, which adds liquidity, a trade order gets the Taker fee if the trade order is matched immediately against an order already on the order book, which removes liquidity.
Simply put, a maker fee is when you create an order on the order book (this could be a buy or a sell) and someone else completes it, therefore you pay no fees and get the amount paid. The one that completed your order pays the fee. The other way around, if you sell into an order already posted, you pay the fee, and they do not.
Within eight months of launching in July 2017, HK-based Binance quickly skyrocketed into the world's largest cryptocurrency exchange by trading volume, processing more than $1 billion (Dh3.67 billion) on a daily basis.
Binance has a trading fee structure that is based upon 30-day trading volume or 24-hour Binance Coin holdings. The cryptocurrency traders are categorized into VIP Levels, ranging from Level 0 to Level 9.
Trading fees range from 0.1 per cent for Maker and Taker to 0.02 per cent / 0.04 per cent, depending upon VIP level status. Additionally, both Maker and Taker can receive a 25 per cent discount by using Binance Coin instead.
Binance facilitates the deposit and withdrawal of funds in crypto and fiat money. For users who don’t pre-own Binance supported cryptocurrencies, bitcoin you can purchase cryptocurrencies by credit or debit card, cash balances, or by third-party payments.
While there isn’t any deposit fees charged, there is withdrawal fees of 0.15 per cent, with a minimum of 3 euros (Dh13.31) and a maximum of 15 euros (Dh66.57). The trading fees average at 0.1 per cent.