Bitcoin is a digital currency which operates free of any central control or the oversight of banks or governments. Instead it relies on peer-to-peer software and cryptography. It can be used to buy products and services, however not many shop accept Bitcoin. It has been banned by some countries of the world.
It is one of the most popular cryptocurrency which serves as an alternative form of money. Bitcoin offer a relatively new method of tracking and proving asset ownership, which enables the Bitcoin network to operate. It has been bought and held by many people as an investment, however, it’s important to note that Bitcoin investments are greatly risky because of its changeable nature.
There are several options to buy the world’s biggest and most popular cryptocurrency if you wish to become a Bitcoin investor,. Right away, we will discussing the steps involved and the requirements in vivid terms.
Facts To Note Before Investing in Bitcoin
Its no longer a news that bitcoin is a fascinating digital currency that initiated online currency and digital asset revolution.
Bitcoin uses a triple-entry book keeping system that powers a decentralized system, run by many participating computers around the world, known as miners.
Bitcoin was first created in 2009 and reached a peak value of more than $60,000 per coin in early 2021. However, the price is highly changeable compared to other assets, such as stocks and diverse ETFs.
Simple Steps On How To Invest On Bitcoin
Bitcoin can be acquired by using digital wallets, but certainly one of the easiest ways to buy bitcoin is through a cryptocurrency exchange account, also known as brokerage account. Below are the steps on how to invest on bitcoin.
1. Go For The Right Bitcoin Exchange
Begin your Bitcoin purchase by choosing the best place to buy and store your digital currency. Popular places to buy Bitcoin include Coinbase, Robinhood, eToro, FTX, Gemini, and BlockFi, among many others. Take note of fees and the reputation of the exchange when selecting where to buy Bitcoin. Also, make sure that the feature is supported if you plan to transfer your Bitcoin out of the brokerage account, as not all brokerages give you this option.
2. Create An Account With Bitcoin Support
Open your brokerage or cryptocurrency account immediately after choosing your desired account, For those in the United States, plan on sharing your basic contact information and valid identification to meet the exchange’s know your customer (KYC) requirements.
Stock Your Account With Government-Approved Currency (Fiat)
At this stage you have to stock your account once your account is opened. Of course the easiest, fastest, and cheapest way is usually with an online funds transfer from your bank account. You may also be able to use payment apps like PayPal depending on your exchange. Some cryptocurrency exchanges give you instant access to trade, while others may need you to wait for funds to clear before purchasing. You may have to wait until the deposit clears before you can withdraw funds from the account if you desire to buy cryptocurrency immediately.
3. Place A Purchase Order
Hit the buy button to enter an order when you feel the time is right. The exchange will change your dollars into Bitcoin and store in the same cryptocurrency account, similar to holding stocks in a brokerage account. At this time, you are officially a Bitcoin owne ronce your trade executes successfully.
Some Of The Good And Bad of Bitcoin Investment
i. Very Secure: The block chain technology behind Bitcoin makes it very secure and impossible to hack. All coins are tracked from the beginning through current ownership in a public ledger.
ii. Divers Currency And Investment Strategy:
Bitcoin can act as a protection against inflation and other currency risks. It also offers an excellent investment outside of traditional financial markets.
iii. Very Easy To Purchase:You can easily buy Bitcoin using a cryptocurrency exchange, brokerage, or another account connected with Bitcoin. It’s an easy way of buying stock and other common investments.
a. Technical knowledge Needed:You’ll need to use a computer and the internet to buy, sell, and exchange Bitcoin and other cryptocurrencies although, you don’t need an advanced computer or programming skill
c. Vulnerable To Online Hackers: Hackers may be able to accessible and steal your currency if you don’t keep your Bitcoin access information secured. In some cases, even large exchanges have experienced losses too.
b. Fluctuates And Very Volatile: Bitcoin’s value is very inconsistent. About half of its value was lost over a period of three months in the first half of 2021.
Bitcoin Investment Risks
Only invest what you can afford to lose with Bitcoin or any other cryptocurrency. Reason is because of their volatibility and risky nature.
It is very it’s possible that Bitcoin could double, triple, or even multiply by 10 times in value over a short period of time, it could also decline to zero.
It also happens that bitcoin is sensitive to government actions and could be made illegal or severely limited, as recently seen in some parts of the world.