Cryptocurrency guide: Bitcoin, wallets, exchanges, cycles, risks and taxes in Czechia

Cryptocurrencies are digital money without a central bank, and their price can fall by tens of per cent within a few months. Anyone who wants to get into them needs to know five things: the difference between Bitcoin and other coins, where and how to buy safely, how to hold your own keys, how the market moves in cycles and how cryptocurrencies are taxed in Czechia. This guide goes through them one by one. It is not investment advice – just an overview to help you avoid the most common mistakes.

Summary

• Bitcoin is the oldest and largest cryptocurrency, with a fixed supply capped at 21 million coins. Altcoins are all the others – with higher potential and a higher risk of disappearing.
• Only buy from a provider licensed under MiCA (check the ČNB list or the ESMA register) and hold larger amounts in your own hardware wallet.
• Historically, the market has moved in roughly four-year cycles tied to the Bitcoin halving. Every rise was followed by a deep fall. But the past guarantees nothing.
• Since 2025, income from selling cryptocurrency in Czechia is tax-exempt if the cryptocurrency was held for more than 3 years, or if annual income from sales does not exceed CZK 100,000.
• Most people lose money not on the market, but through scams and lost keys.

What a cryptocurrency is – in brief

A cryptocurrency is a digital currency whose transactions are recorded in a blockchain by a public network of computers. No single institution issues it or approves transfers. You prove ownership with a private key – whoever has the key has the coins.

We explain the technical principle, the difference between mining and staking, and the history in our article What is a cryptocurrency and how does it work. Bitcoin itself is covered in detail in our complete guide to Bitcoin. Here we focus on the practical side: what to buy, where, how to store it and what to watch out for.

Bitcoin, altcoins and stablecoins: what's the difference

Bitcoin is often compared to gold: both are scarce and nobody can “print more”. The difference is volatility – gold usually moves by a few to tens of per cent a year, Bitcoin by tens of per cent a month. You can also see today's Bitcoin price on our site: 1 BTC = 1 767 033 Kč.

How to buy cryptocurrency safely

1. Choose a licensed provider. Since 1 July 2026, only firms authorised under the MiCA regulation may provide crypto-asset services in the EU. You can check them in the ČNB list of regulated entities (JERRS) or the ESMA register. Check the exact name of the company you are signing a contract with.
2. Open an account and verify your identity. A regulated provider always asks for proof of identity – it is an anti-money-laundering obligation, not a nuisance.
3. Turn on two-factor authentication via an app, not SMS, and use a password you don't use anywhere else.
4. Deposit money by bank transfer and buy. Start with an amount you could afford to lose.
5. Transfer larger amounts to your own wallet. First send a small test payment, check that it arrived, and only then send the rest.
6. Keep records of every purchase and sale (date, amount, price). You will need them for tax.

A licence doesn't mean you can't lose money. The ČNB itself points out that supervision does not reduce the risks of investing in crypto-assets – it mainly protects against a dishonest provider.

Which wallet to choose

With your own wallet, you get a recovery phrase (seed) of 12 or 24 words. Write it on paper, keep it in a safe place, and never photograph it or enter it on a website. Whoever knows it has your coins – and no support team, exchange or “technician” will ever ask you for it.

Four ways to get cryptocurrency

Cryptocurrencies can not only be bought, but also mined. Each route has different costs and risks:

We compare the pros and cons of mining versus buying in our article Mining vs buying Bitcoin.

How the crypto market moves in cycles

The Bitcoin price has so far gone through repeated phases: quiet accumulation after a fall, growth, euphoria, a peak and a long decline. The cycles coincide with the halving – roughly every four years, the block reward for miners is cut in half, so new bitcoins are added more slowly.

A halving comes every 210,000 blocks, i.e. roughly every four years. The table shows the past, not a forecast. With the growing size of the market, exchange-traded funds (ETFs) and the entry of institutions, cycles may lengthen or flatten. Nobody can identify the bottom or the top in real time – usually only in hindsight.

Why timing matters so much

Anyone who bought in the euphoria at the peak waited, in past cycles, even several years for their investment to return to its original value. That is why some people buy smaller amounts regularly regardless of price (the DCA method) – averaging their purchase price. Even this doesn't rule out a loss; it only reduces the impact of a bad moment.

The biggest risks and most common mistakes

• Buying under the influence of emotions. Fear of missing out (FOMO) drives people to buy at the top; panic makes them sell at the bottom. It helps to have a plan before you open the exchange.
• Money you can't afford to lose. Savings for housing or a loan have no place in crypto.
• Scams. Guaranteed returns, “AI bots”, cloud mining and advice from strangers on social media. How to recognise them is described in our article AI trading bots: how to spot a scam.
• Everything on one exchange. The collapse of the FTX exchange in 2022 showed that even a large platform can go bankrupt along with its clients' money.
• Losing your keys. A forgotten recovery phrase or a discarded hard drive means coins lost forever.
• News and viral topics. Sensational headlines and “leaked documents” move the price for hours or days. In the long run, adoption, regulation and macroeconomics decide – not a trend on social media.

How cryptocurrencies are taxed in Czechia (2025 and 2026)

Since 15 Feb 2025, an amendment to the Income Tax Act (Act No. 32/2025 Coll.) has been in force, introducing two exemptions for individuals:

A transfer means a sale for crowns, an exchange for another cryptocurrency, or payment for goods in cryptocurrency. For 2025, only income from 15 Feb 2025 counts towards the CZK 100,000 limit. If you don't meet either exemption, the difference between income and acquisition price is taxed as other income under Section 10 at a rate of 15% (23% for high incomes).

Mining is taxed differently from buying and selling – we write about this in our article Mining in Czechia: taxes and laws. This summary does not replace a tax adviser; consult one for larger amounts.

What next

• Want to understand Bitcoin in depth – from mining to network security? Continue with our complete guide to Bitcoin.
• Considering mining instead of buying? You will find a comparison in our article Mining vs buying Bitcoin.
• Before you send anyone money, read how to spot an investment scam.

Sources

• ČNB: End of the MiCA transitional period on 1 July 2026 (in Czech)
• Crowe: Taxation of crypto-assets – KDP ČR and GFŘ methodology for the transitional period (in Czech)
• ČNB: MiCA – ČNB granted crypto licences to 11 entities (in Czech)
• Dostupný advokát: Tax return for 2025 – the CZK 100,000 limit and the three-year test (in Czech)