The global interest in cryptocurrencies saw exponential growth towards the end of 2020, a trend clearly reflected in search engine data. Many people were searching for quick ways to build wealth. Now, a few years later, you might be wondering: is it too late to enter the cryptocurrency world?
The reality is that it's not too late to get involved with cryptocurrencies. While the era of becoming an overnight millionaire with minimal risk might be over, the world of blockchain—the underlying technology of cryptocurrencies—is really just beginning.
Understanding Cryptocurrencies: Key Basics
Before you start buying digital assets, it's crucial to understand some fundamental concepts.
What Are Cryptocurrencies?
Cryptocurrencies are digital forms of currency that use cryptography to secure transactions and control the creation of new units. They operate on a decentralized network based on blockchain technology, which is a distributed ledger that records all transactions across a network of computers.
Is Cryptocurrency Legal in Mexico?
Cryptocurrency transactions are not prohibited in Mexico. However, since these digital assets are not backed by a central bank, their use isn't guaranteed, and users aren't protected against potential fraud. Mexican banking institutions currently don't accept Bitcoin or other cryptocurrencies as payment methods or integrate them into their financial products.
That said, Bitcoin is legitimately recognized in Mexico as a means of payment and value transfer, though it's not considered official currency. This doesn't mean you can't purchase other cryptocurrencies—you can choose whichever digital asset best suits your needs and goals, whether for practical use or as a long-term investment.
Tax Implications of Cryptocurrency in Mexico
While there's no specific tax on cryptocurrencies themselves, taxes may apply to the acquisition of goods and income generated from crypto transactions. You could potentially pay income tax (ISR) of up to 20% on profits. It's important to obtain proper fiscal documentation for any gains you make through cryptocurrency operations.
How to Buy Cryptocurrencies: A Step-by-Step Guide
Here's a simplified overview of the process for buying cryptocurrencies and beginning your investment journey. Remember that this type of investment carries higher risk than traditional options like foreign currency or government bonds, but it has also created significant wealth for some investors in relatively short timeframes.
1. Choose a Trading Platform
Select a reliable and secure exchange platform that supports transactions in Mexico. We'll discuss some specific options later in this guide. Research each platform thoroughly before making your decision.
2. Complete Your Registration
Sign up for an account, verify your age, and fulfill all requirements of your chosen platform. This typically includes identity verification procedures to comply with financial regulations.
3. Deposit Funds
Once your account is set up, you'll need to deposit money to begin trading. Most platforms accept bank transfers, debit card payments, or credit card transactions to fund your account.
4. Select Your Cryptocurrency
Choose which cryptocurrency you want to purchase. While Bitcoin and Ethereum are the most popular options, there are thousands of alternatives. Remember that you don't need to buy a whole coin—you can purchase fractions equivalent to the amount you want to invest.
5. Review Your Purchase
Confirm the transaction details and ensure you understand all conditions, including any fees or commissions that may apply.
6. Store Your Cryptocurrencies
After purchasing, you can either leave your digital assets on the exchange platform or transfer them to a private digital wallet. Keeping them on the exchange may make it easier to sell when you want to realize gains, while a private wallet typically offers enhanced security.
Where to Buy Cryptocurrencies in Mexico
If you're interested in entering the cryptocurrency market, you might not know where to start or how to do it safely. Here are some platforms where you can buy cryptocurrencies in Mexico.
Binance: The World's Largest Exchange
As the largest cryptocurrency exchange platform globally, Binance offers considerable solidity and security. You can buy certain cryptocurrencies directly with Visa or Mastercard, with commissions that are reasonable though not the lowest available. The platform provides access to virtually all cryptocurrencies on the international market.
While the interface might seem confusing initially, Binance offers excellent tutorials to help users navigate the platform. The exchange also features Binance Academy, which provides free courses on blockchain technology and cryptocurrencies.
How to Buy Cryptocurrencies on Binance
- Create an account on the platform
- After registration, enable all security measures, including multi-factor authentication for login
- Before funding your account, decide which cryptocurrency you want to purchase
- If you're unsure, consider starting with USDT, a stablecoin whose value is pegged to the US dollar
- Navigate to the "Buy Crypto" option in the upper left corner
- Enter the amount you wish to spend in Mexican pesos
- Add your payment card and complete the transaction
👉 Explore secure trading platforms
Bitso: A Mexican Platform
Bitso allows you to fund your account with as little as $100 to purchase cryptocurrencies. The platform offers Bitcoin, Ethereum, LiteCoin, Ripple, True USD, and several other digital assets.
While Bitso doesn't offer the same variety as Binance, it provides a much simpler user interface. All cryptocurrencies on Bitso are available for purchase directly with Mexican pesos. You can add funds through cash deposits at Oxxo stores or via electronic bank transfers (SPEI) for users with bank accounts.
Coinbase
Founded in 2012, Coinbase is one of the largest and fastest-growing cryptocurrency brokers and exchanges globally. The platform allows you to buy Bitcoin, Ethereum, Litecoin, Dogecoin, Dash, and up to 250 different cryptocurrencies with the assurance of working with a secure broker.
Volabit
Volabit was the first Bitcoin purchase platform in Mexico, operating since 2014. It's user-friendly with relatively low fees, though its selection of cryptocurrencies is somewhat limited compared to larger exchanges.
Essential Tips to Avoid Losing Money
There's an important term you should know: "retail investor." This refers to non-professional investors who buy securities through traditional or virtual brokers. The warning that "75% of retail investors lose money" on trading platforms shouldn't surprise you—generating consistent returns requires dedication and effort.
Here are three simple tips to help you manage your investments and money more effectively:
Avoid Buying at Peaks Due to FOMO
- Fear Of Missing Out (FOMO) can lead to impulsive decisions
- Consider buying during market downturns when prices are discounted
- The same principle applies to cryptocurrencies as to other assets: if you liked a cryptocurrency at its original price, you'll likely appreciate it even more at a lower price
Only Invest What You Can Afford to Lose
- Cryptocurrency investments carry high risk
- Only invest money that you can afford to lose without impacting your financial stability
Research Before Investing
- Don't be swayed by promises of quick riches
- Investigate the team behind each project, the cryptocurrency's use cases, and learn how to perform technical price analysis
How to Choose Which Cryptocurrency to Buy
The best advice? Do your own research, as multiple factors need consideration, and the right choice varies for each individual.
Research the team behind each project or cryptocurrency, examine the project's utility, and if you're serious about entering this space, learn how to perform technical price analysis.
Additional considerations include:
- Volatility: The cryptocurrency market is highly volatile, with constant price fluctuations. Don't panic over short-term declines.
- Opportunity: Current low prices might present good entry points for long-term growth potential.
Frequently Asked Questions
Is cryptocurrency legal in Mexico?
Yes, cryptocurrency transactions are legal in Mexico. However, they're not backed by central banks, so users don't have the same protections as with traditional financial products. Always use reputable platforms and maintain proper records of your transactions.
What's the minimum amount needed to start investing in cryptocurrencies?
Many platforms allow you to start with small amounts—some as low as $100. You don't need to purchase whole coins; most platforms allow you to buy fractions of cryptocurrencies.
How do I secure my cryptocurrency investments?
Enable all available security features on your chosen platform, including two-factor authentication. Consider transferring larger holdings to a private wallet, and never share your private keys or recovery phrases with anyone.
Are cryptocurrency profits taxable in Mexico?
While there's no specific cryptocurrency tax, profits from trading may be subject to income tax. Keep detailed records of all your transactions and consult with a tax professional to ensure compliance.
What's the difference between storing crypto on an exchange versus a wallet?
Exchanges offer convenience for trading but may be vulnerable to security breaches. Personal wallets give you full control over your assets but require you to manage security yourself.
How often do cryptocurrency prices change?
Cryptocurrency prices fluctuate constantly, 24/7. Unlike traditional stock markets, crypto markets never close, which contributes to their volatility.
Conclusion
There's no magic formula for getting rich quickly with cryptocurrencies. Success requires effort—first in understanding how cryptocurrencies and their ecosystem work, and then in thorough research to identify which digital assets align with your goals before you start investing.
Prices will change, rise and fall—this is normal market behavior. The key is to be prudent and not invest more than you can afford to lose based on hype or popular opinion.
Follow these recommendations, and you may see returns on your investment in the medium to long term. Remember to prioritize your overall financial health: before investing, ensure you're free of high-interest debt and have a solid savings plan in place.