Wallet or bank deposit – cryptocurrencies in comparison

The purchase using a Wallet is the traditional form of cryptocurrency and a direct investment in cryptocurrencies.

There are different types of wallets where a rough distinction is made between hot purses (online) and cold purses (offline). Hot wallets include wallets managed by cryptocurrencies. There, private investors can create a wallet, transfer liquidity from the current account, buy and store cryptocurrencies. In Germany, providers such as Bison, Binance and Coinbase have established themselves, which store the cryptocurrencies and the associated private keys for the wallets on behalf of the customers.

This developed in parallel Bank deposit a convenient alternative to investing in cryptocurrencies. The driver behind this development is the increasing financial market regulation, which gives asset managers, stock exchanges and banks clear rules for dealing with financial products based on cryptocurrency.

The high investor demand for cryptocurrencies since the end of 2020 has led to a wide range of financial market products. Bank customers can primarily use Exchange Traded Products (ETPs), such as B. ETNs, ETCs or ETIs, investing in one or more cryptocurrencies.

Crypto-ETPs aim to replicate the performance of the underlying cryptocurrency (s) as closely as possible. The majority of the offered crypto-ETPs use physical deposit for this purpose. This means that the cryptocurrencies are purchased directly and stored by an administrator. Thus, the investor only buys cryptocurrencies indirectly, which he could also have supplied from some providers.

Pros and cons: Availability vs. security

The wallet almost corresponds to one of the basic ideas of the cryptocurrency world, namely independence from the financial system. Therefore, the wallet provides 24/7 access to your own coins, which can be traded or transferred at any time. With increasing freedom, however, personal responsibility also increases and thus the risk of e.g. B. access to the hot or cold purse is lost.

The bank deposit provides customers with a well-known and legally secure framework for trading and storing their indirect crypto investments. Unlike in the wallet, these can only be traded in the bank deposit during the usual trading hours. The stock exchange itself acts like other securities.

Taxation of cryptocurrencies can vary widely

The basic taxation of this income varies depending on whether the cryptocurrency was purchased directly through a wallet or indirectly using a financial instrument in one’s own bank deposit.

Wallet: In the case of direct purchase by a private individual, cryptocurrencies are subject to income tax as “other economic goods” in accordance with § 2 I No. 7 EStG. The sale thus represents a private sale transaction, and the regulation pursuant to § 23 EstG applies. Therefore, a distinction must first be made between the period of possession. If this is more than twelve months, capital gains (and losses) are tax-free. Under this, the profit is subject to personal income tax, taking into account an exemption limit of up to 600 euros.

Depot: When buying cryptocurrencies indirectly through a financial instrument, profits and losses are subject to the usual deposit taxation. For the majority of German private investors, this equates to the fixed withholding tax of 25 percent.

Advantages and disadvantages: The planned holding period as an important criterion

Depending on the planned holding period and the personal tax situation, both direct and indirect purchases can be beneficial to the investor. If, for example, the investor wants to invest part of it strategically and in the long term and wants to act another part tactically and during the year, both forms are sometimes suitable.

While the taxation of financial instruments is strictly regulated in this country and is carried out automatically by the custodian bank, the wallet entails an administrative effort and uncertainties in the assessment basis. In the case of a direct cryptocurrency purchase via wallet, investors must themselves state the sales transactions in their tax return and be able to prove them on request. This can quickly lead to computational chaos. Although the first crypto platforms allow for the export of transactions, the individual calculation of capital gains (and losses) taking into account air drops, effort rewards, savings plans and other special situations should not be underestimated. Cryptocontrol programs promise a solution, but even here manual follow-up is often required, or the user must set up and configure an API between the control software and the wallet provider.

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The cost in comparison

The direct trading of cryptocurrencies via the wallet is above all characterized by the transaction costs, whereas in the case of bank deposits there are product costs in addition to the transaction costs. In addition, there are other cost components, e.g. B. the spread (difference between purchase and offer price), or fees, e.g. B. to transfer liquidity from the checking account to the wallet.

The hot wallet user usually has no running costs for the wallet, with a cold wallet there may be acquisition costs. The initial costs often arise only when the user wants to transfer liquidity (fiat currency) to the wallet provider. Depending on the provider, zero to three percent of the money amount is withheld.

The wallet user is then prepared for crypto trading, but should notice the difference between the buying and selling prices and the market price. Some platforms show the market price and add a fee, others follow the market price and offer a slightly higher price for purchase and a slightly lower price for sale. In addition, there are also crypto platforms, mostly crypto exchanges, that use the current market price and only charge a variable or fixed fee for each transaction.

In contrast, the normal custodian usually pays an ongoing fee for his account information. For the purchase and sale of crypto-ETPs, the bank then mainly charges a fixed fee and / or a transaction fee that depends on volume. Unlike direct purchases, an issuer with crypto-ETPs is still responsible for the administration and storage of the cryptocurrencies. Therefore, most issuers charge a management fee spread over the year, which is added directly from the ETP’s assets.


Bank deposits and crypto-ETPs offer increased investor protection and administrative benefits, such as order and tax returns or the storage of cryptocurrencies, for which the customer pays an ongoing fee. On the other hand, there is the mostly free wallet, where the user has to keep an eye on the cost of trading (spreads and fees) and transferring liquidity.

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