Cryptocurrency Investing for Internationally Mobile Investors

Risk Warning: Trading CFDs, cryptocurrencies, and other speculative investments carries a high level of risk. You may lose all capital invested. These products are not suitable for all investors. Independent financial advice should be sought before investing. Past performance is not a guide to future results.

Cryptocurrencies are highly volatile and largely unregulated in many jurisdictions. There is no equivalent of deposit protection or investor compensation for direct cryptocurrency holdings. You should invest only what you can afford to lose entirely.

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Cryptocurrency has moved from the fringes of finance to a mainstream conversation in wealth management — but for many internationally mobile investors, it remains a confusing and intimidating asset class. This guide provides a grounded, factual introduction to cryptocurrency investing: what it is, how to access it, how to hold it safely, and what the tax picture looks like across the key jurisdictions where Global Investments clients reside.

What Is Cryptocurrency?

A cryptocurrency is a digital asset that exists on a blockchain — a distributed ledger maintained simultaneously by a decentralised network of computers. Unlike traditional currencies, no central authority (central bank, government) creates or controls cryptocurrency.

Bitcoin (BTC) is the original and largest cryptocurrency by market capitalisation. It operates as a decentralised, fixed-supply digital asset — a maximum of 21 million bitcoin will ever exist. Bitcoin's primary use cases are as a store of value, an alternative to gold, and a means of transferring value across borders without banking intermediaries.

Ethereum (ETH) is the second-largest cryptocurrency. Unlike Bitcoin, Ethereum is a programmable blockchain — it supports "smart contracts" (self-executing code) and is the infrastructure layer on which much of decentralised finance (DeFi), NFTs, and blockchain-based applications are built.

Beyond Bitcoin and Ethereum, there are thousands of other cryptocurrencies (often called "altcoins"). The vast majority have limited utility, thin liquidity, and high speculative risk. For internationally mobile investors seeking cryptocurrency exposure, Bitcoin and Ethereum represent the most established, most liquid, and most widely adopted options.

How Blockchain Works (Briefly)

A blockchain is a chain of records (blocks) linked and secured using cryptography. Each transaction is verified by a network of participants (miners or validators) and added to the permanent record. Once added, it cannot be altered. This decentralised verification model means:

• No single party controls the ledger
• Transactions are transparent and permanent
• Double-spending (using the same digital asset twice) is prevented

For an investor, you do not need to understand the technical mechanics in depth — but grasping the decentralisation principle explains why cryptocurrency has no central issuer to guarantee its value and no government backstop if it fails.

How to Buy Cryptocurrency

There are three main routes to purchasing cryptocurrency as an international investor:

1. Cryptocurrency Exchanges Regulated exchanges (such as Coinbase, Kraken, Bitstamp, and others — mentioned for illustrative purposes, not as recommendations) allow investors to purchase Bitcoin, Ethereum, and other cryptocurrencies directly using bank transfers or debit cards. After purchase, the cryptocurrency can be held on the exchange or withdrawn to a private wallet.

The key advantage: simplicity and immediate access. The key risk: exchange custody means the exchange holds your assets on your behalf — if the exchange is hacked, becomes insolvent, or freezes withdrawals, your access may be impaired.

2. Bitcoin/Crypto ETPs (Exchange-Traded Products) Since the approval of Bitcoin spot ETFs in the US in early 2024, institutional access to Bitcoin via regulated exchange-listed products has become significantly more available. European and UK investors can access Bitcoin and Ethereum ETPs listed on regulated exchanges (London Stock Exchange, Euronext, Deutsche Börse) through standard brokerage accounts.

Advantages: regulated wrapper, easier tax treatment, custody handled by institutional custodians. Disadvantages: annual management fees (typically 0.15–1.5%), no ability to transact with the underlying Bitcoin, and exposure to the ETP provider's counterparty risk.

3. FX/CFD Brokers Regulated brokers offer cryptocurrency CFDs — price exposure without ownership of the underlying asset. Suitable only for short-term tactical positions; carrying charges and leverage make CFDs unsuitable for long-term holdings. Full risk warning applies (see above).

Cryptocurrency Storage: Exchange vs Hardware Wallet

Exchange Storage (Custodial) Keeping cryptocurrency on an exchange is the simplest option and is broadly acceptable for small amounts or for regular traders. However, you do not hold the private keys — the exchange does. The mantra in the crypto community is "not your keys, not your coins."

Exchange risks:

• Exchange insolvency (multiple major exchanges have failed — FTX in 2022 being the most notable)
• Hacking and theft (exchanges are high-value targets)
• Withdrawal freezes during market stress

Hardware Wallet (Cold Storage) A hardware wallet stores your private keys — the cryptographic proof of ownership — on a physical device that is not connected to the internet. To authorise a transaction, the hardware wallet must be physically plugged in and the transaction confirmed on the device. This makes remote hacking virtually impossible.

For significant cryptocurrency holdings (above a few thousand pounds/dollars), moving assets off exchanges to a hardware wallet is strongly recommended.

The risk of hardware wallets: if you lose the device and the recovery seed phrase, access to the funds is permanently lost. Proper backup and storage of the seed phrase is essential.

Tax Treatment Across Key Expat Jurisdictions

United Arab Emirates The UAE currently levies no personal income tax or capital gains tax on cryptocurrency profits for individual investors. This makes the UAE one of the most tax-efficient jurisdictions in the world for cryptocurrency holders. However, businesses involved in cryptocurrency activity may face registration requirements, and the regulatory framework under VARA (Virtual Assets Regulatory Authority) is evolving.

Cyprus Cyprus has historically not taxed capital gains on the disposal of securities (with limited exceptions including immovable property). The treatment of cryptocurrency gains in Cyprus has not been definitively codified in all cases — guidance from the Cyprus Tax Department has been developing. Specialist Cypriot tax advice is recommended before assuming gains are tax-free. Cryptocurrency income (e.g. staking rewards, mining income) is generally subject to personal income tax.

United Kingdom (for non-residents) UK non-residents are generally not subject to UK capital gains tax on cryptocurrency disposals. However, UK tax residency is determined by the Statutory Residence Test — spending significant time in the UK or retaining close UK ties may affect residency status. UK residents must report all cryptocurrency disposals (including trades between cryptocurrencies, not just crypto-to-cash conversions) to HMRC as capital gains.

Spain Spanish residents are subject to savings income tax on cryptocurrency gains — rates currently range from 19% to 30% depending on the size of the gain (the top band, on savings income above €300,000, rose to 30% from 1 January 2025). Spain has introduced reporting requirements for cryptocurrency holdings above certain thresholds. Tax advice from a Spanish adviser is essential for Spanish residents.

Risk Profile and Portfolio Allocation

Cryptocurrency is among the highest-risk assets accessible to retail investors. Historical drawdowns in Bitcoin include:

• 2017–2018: Price fell approximately 80% from peak to trough
• 2021–2022: Price fell approximately 75% from peak to trough

These drawdowns are not historical aberrations — they are a function of the asset class's characteristics: limited liquidity relative to traditional markets, sentiment-driven price movements, and regulatory uncertainty.

The majority of professional financial planners who include cryptocurrency in client portfolios treat it as a small satellite allocation — typically in the range of 1–5% of investable assets. This allows meaningful participation in strong up-moves without exposing overall portfolio health to the volatility of a severe drawdown.

Investors should never invest borrowed money, emergency funds, or money they cannot afford to lose entirely in cryptocurrency.

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The information in this guide is for educational purposes only and does not constitute financial advice. Trading CFDs, cryptocurrencies, and other speculative investments carries a high level of risk. You may lose all capital invested. These products are not suitable for all investors. Independent financial advice should be sought before investing. Past performance is not a guide to future results.

How Global Investments can help

Global Investments does not provide cryptocurrency execution services. However, we regularly advise clients on how cryptocurrency fits — or does not fit — within a broader investment and tax planning strategy.

For clients with existing cryptocurrency holdings, we can help with custodial considerations, cross-jurisdictional tax reporting obligations, and integration into a comprehensive wealth plan. For clients considering a first allocation, we can provide a realistic, objective assessment of suitability based on your specific circumstances. Contact us to discuss.