A common concern that new-age investors have is how to invest in Bitcoin. Purchasing Bitcoin can be a perfect way to dive into the alternative investments sector. Cryptocurrencies have the potential to elevate you financially, but they also come with significant risks that you should be aware of. Thing is, you can make it big in the world of cryptos, but you can also end up losing a huge amount of money if things do not go your way. that is why it is very crucial to have sufficient education about Bitcoin before taking a single penny from your bank account to invest in these digital assets.
Bitcoin is still rising in value, as the world’s most popular cryptocurrency. It has had its highs and lows, but it generally increased in value since 2009, when it was launched. It is therefore not a very unique asset when we look at it under the lens of volatility. If you have invested in bonds, stocks, or mutual funds, you may have already known what the rising and falling of asset prices can do to your portfolio.
It is therefore not advisable for anyone to overdo a specific asset. When it comes to volatile assets such as Bitcoin, my advice is always that you only invest 10% of your money and not more than that. Even so, you will need to find a way to secure your bitcoins. Luckily enough, there are companies that have come up with a perfect solution for the storage of cryptocurrencies.
How to buy Bitcoin
If you are well informed about Bitcoin and are willing to start investing in them, then you should consider purchasing them from a safe exchange. The 4 steps to follow in order to access the Bitcoin are as follows:
- Look for a reputable cryptocurrency exchange.
- Figure out where you are going to store your cryptos
- Purchase the cryptocurrencies.
- Manage the cryptocurrency investment.
Purchasing the Bitcoin
There are several ways in which you can purchase your Bitcoin and other cryptos, such as :
A. Cryptocurrency exchanges
You can buy cryptos from a variety of crypto exchanges. Most will charge a percentage of the total price of the cryptos that you purchase. You should ensure that you do sufficient research about the cryptocurrency exchange that is good for you. The most popular crypto exchanges include:
- Coinbase – United States’ crypto buyers prefer using this exchange owing to the fact that one can link it to their bank account. This platform is also popular for offering a very wide variety of digital currencies. Upon making a transaction, Coinbase will charge you a spread of approximately 0.5%, and a variable fee. A spread is an adjustment fee that is made to the sales price of a given investment.
- Binance – Binance is perhaps the most popular crypto exchange in terms of volume exchanges. Investors love this platform due to its very affordable fees (0.1% for cryptocurrency trades, and a variable withdrawal fee).
- Gemini- This a crypto exchange platform based in the United States. Depending on the size of your purchase, you can pay a fee ranging from 0.99% to 1.49%.
- Coinmama- This platform charges a 5.9% transaction fee, and requires that you make a purchase of not less than $60. You are also bound to incur an additional 5% fee if you make a purchase through a credit card.
B. Traditional stockbrokers
The only suitable platform that you can rely on under this category is Robinhood Crypto. This company is the first mainstream broker to provide investors with the opportunity to buy bitcoin for investment purposes.
The other ways you can purchase Bitcoin are Bitcoin ATMs, other Bitcoin owners, and Bitcoin futures companies.
How you will store bitcoin
There are two ways in which you can store your cryptocurrencies after purchasing them, namely: hot wallets, and cold wallets. With a hot wallet, you can store your cryptos in a manner that allows you to transact faster. A cold wallet, on the other hand, has some extra security features that are meant to keep your cryptos safe for a long period. Cold wallets are therefore generally slower in comparison to hot wallets.
Buying the Bitcoin
Upon linking the crypto exchange to your bitcoin wallet, you can then proceed to buy your Bitcoin. Did you know that you can purchase fractional units of Bitcoin? You can, for instance, decide to purchase an $50 share and make additional units as time goes by.
Managing your Investment
There several ways in which you can earn from Bitcoin investments. The two main ones are trading and using a Bitcoin IRA. If you want to earn an income on a daily basis or on a short-term horizon, trading is the way to go. If, on the other hand, you want to earn over a long-term investment horizon, you can open your self-directed Bitcoin IRA, and have your cryptos stored in a secure wallet.
It is crucial to have an understanding of how Bitcoin works before considering investing in it. The best thing is that there is a lot of information about Bitcoin on the internet, thus it is easier for anyone to understand how this crypto functions. If you would want to get an insight into how other investors’ Bitcoin IRA assets are performing so far, you can request for a free Bitcoin Investment Kit from Regal Wallet.
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I hope that you enjoyed this article about how to invest in Bitcoin. Feel free to express your thoughts in the comments section, and to also drop a question if you have any.
I wish you success!
Eric, investor, entrepreneur and team member of Gold Retired.