Bitcoin is a well-known cryptocurrency that’s offering a new economy with a newer way of payments and investments. Many individuals acquire and hold Bitcoin as an investment, in addition to using it as a payment method.
If you wish to invest in Bitcoin, you may be a new millionaire in the making. Here are the steps to invest in Bitcoin.
Steps to invest in Bitcoin
1. Decide on a Bitcoin Exchange or Broker
Begin by deciding where to buy and keep your Bitcoin. Among the best sites to acquire Bitcoin are Coinbase, Robinhood, eToro, FTX, Gemini, and BlockFi. When choosing an exchange, consider costs and the exchange’s reputation. Also, if you intend to withdraw Bitcoin from your brokerage account, confirm that the feature is supported since not all brokerages do.
2. Open a Bitcoin Account
It’s time to open your brokerage or cryptocurrency account. If you live in the US, be prepared to provide basic contact information and acceptable identification to fulfill the exchange’s KYC standards. Different countries have different rules on Cryptocurrencies, so check the latest rules in your country.
3. Deposit Fiat (government-backed) Currency
Once your account is open, you can fund it. The quickest and cheapest method is usually an online bank transfer. Depending on your exchange, you might be able to use PayPal. Some cryptocurrency exchanges allow you to trade instantly, while others need you to wait for the money to clear. If you can buy cryptocurrencies instantly, you may have to wait for the deposit to clear before withdrawing funds.
4. Purchase Order
When you’re ready, click the purchase button to place an order. The exchange will turn your dollars into Bitcoin, stored in the same cryptocurrency account, similar to holding stocks in a brokerage account. Once your deal goes through, you possess Bitcoin.
Is it safe to invest in Bitcoin?
Bitcoin is a “hazardous/high risk” new asset. Bitcoin’s value may double, quadruple, or even tenfold in a short amount of time, but it may also fall to nothing. Bitcoin is also subject to government restrictions. Leverage your bitcoin investment with a risk-free amount.
Advantages of investing in Bitcoin
- Easy to buy.
- Offers a new currency and investing plan.
- Can get you upto 10X valuation.
Disadvantages of investing in Bitcoin
- High-risk, high-volatility
- Hacks and other losses
- Requires some technical expertise to understand
Can you invest in Bitcoins indirectly?
If you wish to acquire cryptocurrencies through a third party, you have an increasing number of possibilities.
For example, Grayscale Bitcoin Trust is a regular investment vehicle that is comparable to an ETF. Shares of this fund can be acquired through your brokerage account under the ticker GBTC on the OTCQX.
Other cryptocurrencies and blockchain-focused ETFs include Siren NASDAQ NexGen Economy (BCLN), Bitwise Crypto Sector Innovators (BITQ), and Capital Link NextGen Protocol ETF offer indirect exposure to Bitcoin and the crypto industry (KOIN). When investing in an ETF, especially one in a new area, consider the costs and dangers.
Summary: Should you invest in Bitcoin
Everyone must decide whether they believe Bitcoin’s price will “go to the moon” or plummet. If you decide to invest in Bitcoin, do not risk too much of your net worth.
If active stock trading scares you, you won’t like the high-speed, 24/7 cryptocurrency market. But if you’re willing to take on some risk and ride out the price swings, Bitcoin can be a viable long-term investment option.
Get started with as little as $10.