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Use crypto
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What can you do with
your cryptocurrencies?

From holding to crypto-backed loans — the most important options explained in a neutral and understandable way.

Reality

How people typically use crypto

Many users combine several approaches in practice. Pure single strategies tend to be rarer.

  • Holding + occasional trading
  • Holding + staking
  • Holding + crypto-backed loans

Which combination is chosen can depend on goals, time available and individual assessment. The list is intended for orientation and does not constitute a recommendation.

Quick orientation

Overview of typical usage options

Descriptive classification – not a recommendation.

Holding
Coins are typically kept long term in your portfolio
Possible ongoing income
Staking or lending – yields are not guaranteed
Liquidity without selling
Borrow against your coins – with interest and liquidation risk
Active use
Spot or derivatives trading – with elevated risk
The most important usage options

Six ways to use crypto

Every variant has its own risk profile and its own tax consequences in Austria.

🪙
Usage

Holding (HODL)

Buy coins and keep them over longer periods. Typically no ongoing effort. With your own wallet there is no platform risk, but self-custody risks remain (e.g. loss of access credentials – without a backup, recovery is in many cases not possible).

Characteristics
  • Very simple
  • Typically no ongoing effort
  • No platform risk in self-custody, but self-custody risks remain (e.g. loss of access credentials)
Possible drawbacks
  • No ongoing income
  • Full price volatility
Tax (Austria)
Simply holding generally does not constitute an immediate taxable event in Austria. Selling can be tax-relevant and may be subject to a special tax rate (e.g. 27.5%). Tax treatment may depend on the individual case.
💸
Usage

Staking

Coins are deposited in a proof-of-stake network and can contribute to validation. In return, rewards in the form of new coins may be generated – amount and frequency are not guaranteed.

Characteristics
  • Possible ongoing rewards
  • Available directly on many platforms
Possible drawbacks
  • Lock-up possible (coins can be temporarily bound)
  • Slashing risk for validators
  • Platform or network risk
Tax (Austria)
Rewards may be tax-relevant. Treatment can be complex and may depend on the individual case – clarify with a tax professional if in doubt.
💰
Usage

Interest & lending

Coins can be lent through a platform to third parties and may generate ongoing interest. Often used on stablecoins, BTC or ETH. Yield levels and availability are not guaranteed.

Characteristics
  • Possible ongoing income – not guaranteed
  • Also common on stablecoins
Possible drawbacks
  • Counterparty risk (e.g. platform insolvency)
  • Withdrawals can be temporarily restricted or suspended
  • Typically no deposit insurance like classic banks
  • Liquidity risk
Tax (Austria)
Lending income may be tax-relevant on an ongoing basis. Treatment may depend on the individual case – clarify with a tax professional if in doubt.
🏦
Usage

Crypto-backed loans

Coins can be deposited as collateral to obtain liquidity in euros or stablecoins – without selling them directly. Conditions, interest and collateral requirements can vary.

💡 If prices drop sharply, the deposited collateral can be wholly or partly liquidated – sometimes at short notice and without further warning.

Characteristics
  • Typically no direct sale of coins when taking out the loan
  • Can enable quick access to liquidity
Possible drawbacks
  • Liquidation risk if prices drop – coins can be sold in that process
  • Interest costs on the loan, rates can change
  • Variable contract terms
  • Platform risk (e.g. insolvency, restrictions on withdrawals)
Tax (Austria)
Simply taking out a loan generally does not constitute an immediate taxable event. Liquidation of collateral may be treated like a sale. Treatment may depend on the individual case – clarify with a tax professional if in doubt.
📈
Usage

Spot trading (no leverage)

Buying and selling coins on the spot market without leverage. Typically only the capital actually deployed is moved.

Characteristics
  • No classic leverage – losses are generally limited to the capital deployed (other risks such as platform or market conditions remain)
  • Often easier to track for tax purposes
Possible drawbacks
  • Normal market risk (price fluctuations)
  • Frequent trades increase complexity and tax topics
Tax (Austria)
Realised gains may be tax-relevant and may be subject to a special tax rate (e.g. 27.5%). At very high frequency a different classification may apply. Treatment may depend on the individual case – clarify with a tax professional if in doubt.
⚡
Usage

Derivatives / futures trading

Note

Trading derivatives such as futures or options – often with leverage. The actual asset is not held, only a contract on it.

⚠️ Derivatives differ significantly from classic spot trading and involve substantially higher risk.

Characteristics
  • More complex strategies possible
  • Falling markets can also be addressed
Possible drawbacks
  • Total loss possible (and beyond deployed capital depending on the product)
  • Very high risk due to leverage
  • More complex in practice and for tax
Tax (Austria)
Tax treatment of derivatives can be complex and differs from spot trading. Treatment may depend on the individual case – clarify with a tax professional if in doubt.
Returns and risk are typically linked

Higher potential returns tend to come with higher risks. A noticeably high quoted interest rate or an unusually high yield can be a reason to look at the underlying risks more carefully.

Orientation

Which usage is typically associated with which behaviour?

Descriptive classification – not a recommendation and not financial advice.

Little time
Often associated with holding
Focus on possible ongoing income
Often associated with staking or lending – returns are not guaranteed
Liquidity without a direct sale desired
Often associated with crypto-backed loans – with interest and liquidation risk
Active use
Often associated with spot trading
Very risk-tolerant users
Derivatives / futures are typically used in this context – with significantly elevated risk
Platform types

Commonly used platform types

General classification by usage – not a recommendation of specific providers.

UsageTypical platform type
Holding
Brokers or simple exchanges
Staking
Platforms with staking functionality
Lending
Platforms with interest functionality
Crypto-backed loans
Loan platforms with crypto collateral
Spot trading
Order-book exchanges
Derivatives
Derivatives or futures exchanges

Important notes

  • Higher potential returns tend to come with higher risks – returns are generally not guaranteed.
  • Lending and crypto-backed loans are not risk-free – platforms can become insolvent or temporarily restrict or suspend withdrawals (in the past e.g. Celsius, BlockFi, FTX).
  • Crypto platforms typically do not have deposit insurance like classic banks.
  • Larger holdings are often kept in a personal wallet in practice rather than left on platforms permanently.
View scam types Wallet overview
Next step

More on platforms

Once you understand the differences you can compare platforms by usage, fees and feature scope.

Go to comparison table Understand taxes

Not financial advice. Content is for information only.

Not sure which approach fits you?

You have seen the most important usage options. If you are unsure which approach matches your profile, the crypto type quiz can help you classify yourself.

Start quiz

Optional – no pressure, no recommendation.