HomeBusinessBITCOIN: BEFORE YOU INVEST IN BITCOIN, READ THIS!
BITCOIN: BEFORE YOU INVEST IN BITCOIN, READ THIS!
December 15, 2021
In this article, we would be analysing in detail in on how the steps involved in buying Bitcoin for the first time and perhaps start trading with ease with little or no mistakes.
1. Open A Cryptocurrency Online Accouny
Cryptocurrecy online account opening is the next step to take after you choosen your brokerage or exchange, Yes for most cryptocurrency exchanges, the online account opening process takes less than 10minutes probided all the requirement are handy. Also not thay you need a cryptocurrency wallet, included in most cryptocurrency exchange accounts, to store your digital assets which the password must be kept secret.
You will have to key in your name, address, phone number, email, and Social Security number to activate your cryptocurrency account. Some require additional information, like a picture of your driver’s license or passport, to access all account features. The process can be likened to the opening of a typical brokerage or bank account in any local bank branch
2. Choose The Type Of Cryptocurrency To Purchase
Going by research and available data, Bitcoin happens to be the largest, most important and most popular cryptocurrency by market cap. In as much Bitcoin is arguably the most important digital currency, most exchanges give you access to currencies such as Ethereum, Cardano, Stellar Lumens, or Dogecoin etc.
Truth be told, every currency has its own uniqueness, potential benefits, and market risks. And of course cryptocurrencies are arguably riskier than Bitcoin, so invest with care and what you may loose and it won’t lead you into depression.
Make Your First Transaction
At this stage, to purchase Bitcoin, correctly type the amount of Bitcoin, abbreviated BTC, in your exchange’s trading tool. You will need enough of your local currency in your local bank account for the transaction to go through by clicking the submit button
So long all the details supplied are correct and you have money in your local account, the transactions would occur instantly on some exchanges, while others may process a transaction on the Bitcoin blockchain that takes some time to complete. Standard Bitcoin transactions require four confirmations and take about 45 minutes to complete or more.
4. Alternatives To Buying Bitcoin Directly
Ok, perhaps after due research and investigation on who and where to buy cryptocurrency from, and a third party becomes your best option, you can really take advantage of a growing number of alternative investment options litered aaround, but we always advise you do a thorough scrutinization before conclusion.
Grayscale Bitcoin Trust enables investors to invest in Bitcoin through a traditional investment fund that in some ways is similar to an ETF. The shares of this fund trade with the symbol GBTC on the OTC exchange OTCQX, and can be purchased through your brokerage account.
Note that cryptocurrency and blockchain industry-focused ETFs, like Siren NASDAQ NexGen Economy (BCLN), Bitwise Crypto Industry Innovators (BITQ), and Capital Link NextGen Protocol ETF (KOIN), happens to be another chanel or way to get indirect exposure to Bitcoin and the crypto industry.
We always advise to consider fees and risks when investing in any ETF, particularly one focused on a relatively new industry.
After Investing In Bitcoin, Things You Should Consider And Look Out For
If you are not new to cryptocurrency, you will agree with me that Bitcoin is risky and volatile. Meaning the price rises and falls very quickly and sometimes with little notice aa the case may be. A Twitter message by Elon Musk or a negative message from a government official could be enough to send Bitcoin’s value downward within the slightest time frame
In as much as Bitcoin and other cryptocurrencies may be a reasonable asset to hold in your investment portfolio, don’t invest more than you can afford to lose, and consider keeping cryptocurrency as a relatively small portion of your overall investments.
Some Advanced Strategies For Investing In Bitcoin
You can advance your strategy to include Bitcoin futures, decentralized exchanges, and automated trading strategies provided you enjoy the Bitcoin marketplace. Bitcoin futures, like futures of other commodities, are derivative products with Bitcoin as their underlying securities. Derivatives are typically riskier than investing directly in the underlying security, and that means Bitcoin futures carry an even greater risk than directly buying Bitcoin.
It may be riskier and involve a better understanding of cryptocurrencies, another way to buy Bitcoin is through a decentralized exchange. Unlike Kraken or Gemini, which are centralized exchanges, platforms such as Exodus and Bisq allow you to connect with third-party buyers or sellers directly. Exodus does this through its app, whereas Bisq has software that you can run on your computer to give you access to a peer-to-peer network.
While using decentralized exchanges gives you more control over your Bitcoin and trading, it does have a few drawbacks. Fees may be higher or lower than centralized exchanges depending on the currency you purchase, market rates, and how you enter the trade.
If you’re not careful, it’s easy to spend a lot more on network fees when using a decentralized exchange. There is also more opportunity for you to make a mistake or send to the wrong wallet address, as centralized exchanges take care of much of this for you. Decentralized exchanges may also have a limited selection of cryptocurrencies and may not allow the trade of cryptocurrency options.
Another advanced strategy to buy Bitcoin that may not be suitable for beginner investors is using automated trading. There are many applications or trading bots, such as Cryptohopper, that have algorithms that make trades based on market conditions. Signing up for something like that will let the bot make trades on your behalf to take advantage of small price fluctuations—but it can be risky.
FREQUENTLY ASKED QUESTIONS AND ANSWERS
1. As A Beginner, How I Can Invest In Bitcoin?
Beginners can invest in Bitcoin most easily through a major cryptocurrency exchange or brokerage. Examples of dedicated cryptocurrency exchanges include Coinbase, Gemini, Kraken, and Binance. You can also buy Bitcoin through other financial and brokerage accounts, such as Robinhood, SoFi, and the Cash app from Square. Investing in Bitcoin through these services is similar to buying stock with a brokerage account.
2. Can I Invest In Bitcoin With Five Dollar?
In as much as the value of a single Bitcoin may be in the tens of thousands of dollars, you don’t really need nearly that much money to invest in Bitcoin. At Coinbase, for example, you can buy as little as two dollars of Bitcoin at a time. If you’d like to test out investing in Bitcoin with a small amount, perhaps $10 or $20, that’s certainly an option. You don’t need to be wealthy or have a lot of money to invest in Bitcoin.
3. Please State The Best Way Or Method To Invest In Bitcoin?
This may depends on several factors and may vary based on your goals. Some speculators may be happy with an account that makes investing in Bitcoin easy, even if it requires higher fees. Some may want to buy and HODL (hold on for dear life), aiming for long-term appreciation, while others prefer frequent trades to capture profit from smaller day-to-day price fluctuations. Start by understanding your goals. Then you can pick the right exchange and Bitcoin strategy for you. So therefore, it all depends on your goals.