Market-wise, Bitcoin is still the dominating factor which influences and drives much of the other crypto-assets’ price formation and movement and is seen by many as a hedge against government and central banking confidence (similar to gold and its inverse correlation with the US dollar) — though these assumptions shouldn’t be taken uncritically at face value nor any “expert” opinion or prediction followed blindly. So, how to invest in bitcoin is a concern like where to invest. Remember that a bank account is not imperative in buying bitcoin, nor do you need a specific currency.
At the very least, given the fairly short history of Bitcoin and these kinds of assets, they are high risk and the combination of high and often unpredictable volatility with margin and leverage trading (in the case of exchanges like BitMex, allowing for x100 leverage. This is 10 times more than what is traditionally allowed for) tend to siphon and transfer value and large amounts of funds much faster than, say, in the more conservative environment of normal hedge funds (which tend to be like much more risk-averse and as such mostly just underperform at worst).
By now, most everyone knows that Bitcoin can be bought on exchanges like Coinbase, or purchased directly from other people via P2P platforms. You can also pay for them in a variety of ways – hard cash, credit or debit cards, bitcoin cards, wire transfers, or other cryptocurrencies.
The biggest factors in choosing a payment method (in exchange for the bitcoin) are the seller, your urgency, and your location. An amazing thing, you can even buy bitcoins in Walmart. You can buy BTC with online transfers, debit/credit cards, gift cards, and cash deposits, which is the category that Walmart2Walmart transfers fall under.
- Get a Bitcoin wallet. You can read the reviews to find what you really need.
- P2P exchange. Select the person-to-person marketplace. The system will pair your location with that of sellers in the area nearby. Consider LocalCoinSwap or Paxful although fees are a bit steep.
- Determine the amount of Bitcoins for purchase and enter your email to sign up.
- Select your method for cash deposits. Choose the payment options on the left-hand side of the page and choose Walmart2Walmart.
- Deposit the cash in Walmart, and transfer to the seller’s Walmart filling in details on Paxful for transferring the money.
- Verify the transaction by uploading the Walmart receipt you got from the teller.
- The BTC will be released by the seller to your wallet within 3 hours.
Step One: Get a bitcoin wallet
Since investment means buying and holding (the long-term investors called hodlers in the crypto jargon) rather than trading, it is not advisable to hold one’s bitcoin assets on a custodial exchange or really anywhere else except store them in their own digital hot wallet or in cold storage on a dedicated hardware wallet (such as Ledger Nano or Trezor).
The latter especially recommended for larger amounts since the balances of every bitcoin address is publicly visible on the blockchain and higher value wallets naturally attract the attention of those looking for ways to acquire them and easily become targets for the criminally minded like hackers, scammers, and thieves.
Exodus, Atomic wallet, and Jaxx are other digital wallet options, although those are not so much Bitcoin-centric, but multi-currency, multi-asset, and multi-purpose wallets with built-in exchanges, live charts and tools for portfolio management and (in the case of Exodus and Atomic) 24/7 human support.
Step Two: Choose an exchange
For US, UK, and Canadian customers, Coinbase is the most popular broker and software wallet which also has a web site and web interface and stores customer assets offline as a policy of ensuring better security. It is also ideal for beginners as the buying and selling process is intuitive and simple.
Other popular wallet and exchange services include blockchain.com which provides a wallet directly connected to an exchange. Mycelium is known as one of the most secure mobile wallets specifically designed for Bitcoin (and providing a front-end interface for all the more advanced functionality of the Bitcoin protocol and network), but it may be a little harder to use for beginners at first.
You can also pay in a variety of ways – hard cash, credit or debit cards, bitcoin cards, wire transfers, or other cryptocurrencies. The biggest factors in choosing a payment method are the seller, your urgency, and your location.
Even when two exchanges trade the same cryptocurrencies, they usually offer slightly different services. Exchanges can vary in reputation, reliability, security, processing fees, exchange rates, and cryptocurrencies available for trading. Before settling down with an exchange, look around.
Step Three: Place your order
There’s a number of ways you can buy bitcoins and the more popular means of how to buy a bitcoin is usually the easiest and the safest. Aside from digital currency exchanges, you can also buy and sell (where there are bitcoin buyers). For buying, you’ll need either a bank account or a credit card (or debit card). You can sell bitcoin back for fiat or other digital currency.
There are the so-called Bitcoin ATMs (which are technically not really ATMs, but standalone electronic Bitcoin exchanges), usually available in bigger cities and malls. They usually take a bigger commission (set by the operator of the machine). You can locate a Bitcoin ATM near you using coinatmradar.com (you would still need a wallet and a Bitcoin address to receive the bitcoins to).
In most countries where Bitcoin is banned that usually means that financial institutions are not allowed to deal with bitcoins, which doesn’t include private citizenry. Buy bitcoin is more than a hobby and how to invest in Bitcoin needs dedication.
Bitcoin Investment FAQs
How much does it cost to buy 1 bitcoin?
Bitcoin’s market price relative to the US dollar fluctuates a lot (an immediately obvious reason why Bitcoin can neither be money nor a store-of-value, let alone world reserve currency, contrary to some of the narratives cultivated around it), lately between $8k and $10k. Bitcoin’s third halving took place on May 11 — halving being an event where mining rewards for validating transactions.
This includes them in blocks on the chain get cut in half (thereby also slashing the inflation rate at which newly minted coins enter into circulation). Both previous halvings were associated with wild swinging boom and bust cycles and series of mini-bubbles that eventually stabilized around higher support levels than before (though this doesn’t so far appear to be the case).
What is the minimum amount to invest in Bitcoin?
One can purchase bitcoins in any amount they wish or whatever lower purchase limits a particular broker or exchange allows for. The common-sense principle of don’t invest more than you can afford to lose of course applies here as elsewhere.
In any case, the likelihood of Bitcoin market price valuation to experience another historically unprecedented surge like the one in 2017 is extremely unlikely after the regulatory measures that had been taken after those events. What’s more likely are temporary jumps (and plunges) of no more than 20-30% now and then in response to market conditions.
What’s the best way to invest in Bitcoin?
You can learn more about exchanges, or a bitcoin exchange, as you know your exact needs and purposes. Deciding to purchase bitcoin requires meticulous planning and reading comments from the bitcoin community in reliable crypto news sites and bitcoin forums about particular precautions when choosing a cryptocurrency exchange. How to buy and sell into bitcoin or matters to know to invest in bitcoin are not learned overnight.]
The most convenient way to gain exposure to bitcoins is through the Bitcoin Investment Trust (OTC: GBTC). This fund was created so that buying bitcoins could be as easy as buying any stock or ETF share. All people have to do is buy shares through their regular broker using the ticker symbol. Each share represents about one-tenth of a bitcoin. According to his calculations, a share often costs more than the value of the underlying bitcoin.
How to avoid scam bitcoin investments?
A time tested heuristic for avoiding any money scam is to discard anything that makes promises that sound too good to be true and as if give something for nothing. Automated and algorithmic trading systems aren’t consistently reliable either. Things can significantly differ when you buy from one currency exchange to the other.
There have also been a series of “bitcoin killer” scams such as the notorious Onecoin multi-billion dollar Ponzi scheme. These scams took advantage of people’s ignorance worldwide and operated as a multi-level marketing pyramid scheme. So, as the old Latin saying goes, caveat emptor. Knowing how to invest in bitcoin is totally separate from getting successful with it due to its volatility.
Key takeaways on how to invest in bitcoin
- It’s important to acquire some understanding of at least the basics of how Bitcoin works before jumping in on investing any money into it.
- So, it’s important to take the time to do that so as to avoid falling for any scams or false narratives and important to also understand the use of metaphors in the common crypto vernacular, e.g. “consensus” in Bitcoin does not mean social consensus but is a technical metaphor for how the network coordinates, etc.
- When you decide to buy bitcoin is whether you want to pursue this matter seriously because an investment is a serious matter. It’s not only knowing how to invest in bitcoin but how to handle the negatives.
- Another thing, whenever your passive income represents more than your expenses, you can stop working anytime and still make money, even if you get sick or decide to travel around the world.
- Smart people generally dedicate over 50% of their capital to invest in various assets. Buy bitcoin by all means when you can afford it but don’t think of it like a credit card you can fall back on.
As with any security, one should do their due diligence before getting involved in how to invest in bitcoins. This is not only on its worthiness as an investment. This also has to do with the right exchange platform that best meets your security and convenience needs. The safety of your transactions depends largely on your choice of exchange. There are those who will rely on brokers who will accept between $/€/£200 to $/€/£250. This will allow you to start with the minimum possible before you expand your portfolio and enter more markets. Hopefully, this has answered your doubts and queries on how to invest in bitcoin.