How to Invest In Bitcoin
- Understand the most popular Cryptocurrency, Bitcoin
- Should I invest in Bitcoin? The Pros and Cons
- Invest in Bitcoin: The Basic Steps
- The Role of Bitcoin In the Modern Economics
They say to invest in Bitcoin is to invest for your early retirement. Since the popularity of cryptocurrency in the past decade, more people - both the young and the old - have decided to join the bandwagon despite barely having any knowledge of investments and trades. In this article, we will show you how to invest in Bitcoin for beginners and the reasons why over one in ten people are now in the crypto market.
You will need the following: a good capital and a crypto platform. A cryptocurrency wallet comes optionally since that is tailored to experienced crypto enthusiasts. Unlike the stock market, you can invest in the crypto market for as low as $10 with lower fees. Depending on where you live, several trusted crypto platforms such as Binance, Coinbase and FTX are all free to download on your phone and PC.
A crypto wallet is secondary but will increase the security of your investments, especially if you fear cybersecurity breaches on the cryptocurrency niche at any given time. We will also elaborate on the best ways to invest in Bitcoin without risking your money too much.
As some people say, Bitcoin currency isn't just the future of the investment industry but the future of currency. This brings the idea of a cashless society floating around. However, all of these are just speculation. So, it's up to you to believe it or not. Meanwhile, if you are going to buy Bitcoin as an investment or want to try something new, here is how you do it.
But before we continue, please take note that this is not financial advice. I am just here to provide information about cryptocurrency.
Understand the most popular Cryptocurrency, Bitcoin
When you look at Bitcoins price, it can be daunting. Some people think that to get a piece of Bitcoin; you need to pay that. This just is not true as you can buy portions of Bitcoin, which will be significantly less. It will look something like this: “0.00000065 Bitcoin”. Fun fact, these small decimals are called Satoshi's, a nod to the creator Satoshi Nakamoto.
Bitcoin is a virtual currency that is generated with blockchain through "mining"
People use their own computers to process transactions as Bitcoin mining. After they have processed a certain amount of transactions, they're rewarded with Bitcoins. The Bitcoin can then be stored and sold at a later date.
Should I invest in Bitcoin? The Pros and Cons
You may have a friend at the office or social media showing off how much they made from the crypto market, and you found yourself thinking if you should get a piece of the pie. Ironically, investing in Bitcoin or any other top coins is highly accessible, but it is also considered the riskiest investment right after the stock market. Starting your BTC journey is as easy as one two three, but earning money from it takes a lot of patience and a strong will (which we will explain later on).
Pros Investing In Bitcoin
The best part about BTC investment is that you can start as low as $10. However, that amount of money will not give you a good return on investment (ROI) unless you are just doing it for fun or testing the waters out.
The safest and best way to gain profit from BTC is to plan for a long-term investment. Since 2019, BTC has grown 331.46% as of this writing - despite the various corrections and large dips. So think to yourself, “If I invest $100 Bitcoin today, how much will I earn two to five years from now?”
Another great perk about Bitcoin is that investing is highly accessible. All you have to do is download the right crypto app and start registering. One of the most popular crypto platforms is Binance - which houses more than a thousand cryptocurrencies and has low transaction fees. Once you download the app, you just need to verify your account to start trading and investing. Unlike the old times, you can check up your investments every so often on your phone or PC.
Cons Investing In Bitcoin
Of course, investing in Bitcoin also comes with several flaws. Primarily, if you have no idea how money works in the world of cryptocurrency, you already put yourself at great risk. Keep in mind that Bitcoin is the fast lane of investments that may get you rich at a quicker pace than bonds or lose a chunk of your money in a matter of hours. Unless you have general knowledge of the crypto market, you will be in a constant state of confusion.
Another con of investing in Bitcoin is the threat of cybersecurity. Sure, Binance and Coinbase may have some pretty good security, but that does not guarantee 100% safety. There have been several hack attacks for the past decade, which resulted in millions of dollars lost. So while security is tighter these days, that does not mean Bitcoin investors are wholly safe. That’s why serious investors opt for better security wallets such as Ledger and Electrum.
Both Pros and Cons
There are also some features in the crypto market that we consider as both a pro AND a con - a neutral state that depends on your perspective.
One of those neutral features is volatility. Compared to other financial markets, the cryptocurrency market is considered the most volatile platform - even more so than penny stocks. We’re talking about earning gains of up to 20% in just fifteen minutes and even 1000% in a matter of two days. That said, what goes up fast will always come down fast as well. If emotions get to you and you fear missing out (FOMO), that is when you lose money.
For example, you open up your crypto platform to see Bitcoin increase from $40,000 to $45,000. You want to go with the flow and buy the coin at $45,000 as it keeps on growing. However, some bad crypto news floated around social media and short-term traders decided to sell off their BTC, causing the currency to sink -15% in less than two hours. Because f your emotions get a hold of you and chased after the market at its peak, you lost more than you gained within a day.
That said, it follows up with another con: Bitcoin investments can toy with your emotions. One minute after you cash in on Bitcoin, it goes up. The next hour, it constantly goes down which marks the end of the trend. So now, you find yourself regretting the choice you made and thought you could have bought it during the dip. Unless you have a null state of mind during trades and investments, the world of Bitcoin can eat up your mental state. However, if you think long term, you may find yourself in a better state of mind since you vision the future and its overall good value rather than living at the moment. After all, it’s not like you would sell BTC in just two days, right?
Finally, the other neutral feature of the crypto market is that it is open 24/7. Thus, unlike stocks, cryptocurrency is wide awake and volatility never sleeps. That itself comes as both good and bad since that means the market can significantly go up or take a nosedive down while you sleep.
Should I Invest in Bitcoin or Other Crypto?
You may find yourself thinking, “Why should I spend time on Bitcoin when I could make more money on Ethereum, Cardano or Dogecoin instead?”
Yes, there are plenty of options besides Bitcoin with better gains, but that also means higher risk. These other coins are also known as Altcoins - most of which are still ongoing projects aiming to make the world a better place. One of the popular altcoins is Ripple (XRP). Ripple’s cause is to make business transactions more transparent and offer faster transfers between the two parties. Another is Cardano (ADA), which aims to fix the flaws of both Bitcoin and Ethereum currency.
Bitcoin is already considered the staple of the cryptocurrency market because it is now used as a proper form of transaction. Current events such as El Salvador officially making Bitcoin as legal tender, corporations investing in BTC, and businesses using Bitcoin as a form of payment result in the cryptocurrency showing its real value.
The second most popular coin, Ethereum (ETH), is already showing its proof as a valuable cryptocurrency such as the application of non-fungible tokens (NFT) and is a direct competitor to Bitcoin with its lower transaction fees and a more decentralized network. With its constant real-use case, ETH continues to prove itself to the world that there is more than one good reason for people to invest in it.
Perhaps you have also heard about Dogecoin (DOGE) as well. Back in the early months of 2021, Dogecoin earned a massive gain of more than 1000%, making its investors extremely rich in a short period of time - given that they cashed out the coin. Its story is unusual compared to other altcoins because its main purpose is to just mock Bitcoin. However, after its meme culture grew thanks to its solid community, the value of DOGE increased along with more serious features such as smaller transaction fees versus BTC and ETH as well as small businesses accepting it as a form of currency. Most professional investors and traders always say this is nothing more than a gimmick and a gamble rather than an actual coin with a real-use case.
Yes, altcoins may provide faster ROI compared to Bitcoin but that also mean riskier investments as well. As previously mentioned, most altcoins are still speculative projects with no actual use case, meaning if investors of a specific coin realize there is really nothing special about it, they will just sell their shares in it, causing a huge decline in its value. Simultaneously, if Bitcoin continues to dominate the market and constantly eliminating the competition, the majority of altcoins’ values will go into a steep decline. That is why investors who want lower risk will vie for Bitcoin or Ethereum instead since both already have proof of what they promise, despite the slower gains.
Ultimately, it all boils down to your choice whether or not you want to add altcoins to your portfolio or put all your trust in BTC and ETH instead. However, as experts would say, always diversify your portfolio. That means dividing your capital between BTC, ETH and a small fraction of it on altcoins that you think will make a difference to society.
Invest in Bitcoin: The Basic Steps
The most well-known cryptocurrency is Bitcoin, invented in 2008 by Satoshi Nakamoto and released to the public in 2009. Since then, it has gained mainstream attention. Thanks in part to its 2017 spike, which saw it rise to almost USD 20,000. The price of Bitcoin is USD 45,000 at the time of writing.
Throughout the years, the volatility of Bitcoin has lowered down to the point where it is more “stable” than in its earlier days. However, it is still possible that the coin may still make big gains as much as 100% in less than a year or even significant losses as low as 80%, just like back in 2018.
This may seem like too big of an entry point, but I will walk you through how you can invest in Bitcoin.
Step One: You Need a Wallet
A wallet for Bitcoin is a piece of software that will hold all the Bitcoin or cryptocurrency you buy until you're ready to sell it. Most cryptocurrency websites or as they're known "exchanges" have a built-in wallet that you can use. However, if you want one housed entirely on your personal computer, we recommend using Exodus as it’s perfect for beginners.
This comes in two types: a hot wallet and a cold wallet. A hot wallet is the most basic form of storage. In simple terms, it is a free-to-use app that lets you keep your cryptocurrency as long as you are connected to the internet. Meanwhile, a cold wallet is usually hardware (like a flash drive) that does not need an internet connection for you to manage. A cold wallet is considered safer and more secure, but you will need to pay for it initially before using it. You can find various cold wallets in online stores like Amazon, such as the best-selling Ledger Nano series or the Trezor series.
Step Two: Finding the Right Exchange
There are many exchange sites out there, but the best one for beginners is Coinbase. Coinbase has an easy to use interface and is very user friendly. It is also 100% free to use and has a built-in wallet.
However, Coinbase is limited to some countries - such as South East Asia - which is why Binance takes the lead as the most accessible and the most popular cryptocurrency platform. While it may be more complex than Coinbase, its accessibility and ease of use make it an all-around excellent exchange app for the phone and PC. However, its commission fees are arguably higher than Coinbase and even has some high-risk features such as Futures and Margins - features that we highly do not recommend for beginners and long-term investors.
Another great exchange platform is FTX. However, unlike Coinbase and Binance, FTX is more complex and catered to traders than investors. It offers a robust set of trading tools to help you indicate the market and more advanced trading features to set stop losses and target sell-offs.
Step Three: Trading
When you go onto any crypto exchange, you will see Bitcoin at the top with the option to see how much it has changed over the past 24 hours and an option to "trade". Trading is just buying, so don't get confused. It's called trading because you're buying that currency off of someone else.
Depending on whether you want to HODL (hold on for dear life) or day trade Bitcoin, the time period may be used as a reference so you can have the best return on your investment. If you are thinking about holding Bitcoin for the long term (around a year or more before you sell it off), then the time should not matter at all.
But if you are thinking of swing trading (holding for a short period around a few days up to a month), you should consider other time options besides the 24H volume, including 4 hours, 8 hours, 12 hours, 1 week and 1 month. That way, you get a better ROI in the short term.
Step Four: Store It and Sell It
You may select two options: keep the BTC in your crypto exchange platform or transfer them to your cold/hot wallet. Keeping your BTC in the exchange platform is the simplest form of storage, although it is prone to security breaches. If you want more guaranteed safety, you may want to transfer your investments to a wallet. To do so, you must withdraw your BTC from the exchange platform to your wallet. Then, pick a network (usually ERC-20), enter the wallet address and begin the transfer. This should only take a few minutes, but keep in mind that it also comes with transfer fees.
Once you get your Bitcoins, you can store them in the wallet that the platform provides. Then, you either transfer it to the Exodus wallet you downloaded and installed earlier.
Those are the essential guides on how to invest in Bitcoin.
Always be aware that this is like any other investment, so do adequate research before investing.
Step Five: Finding the Best Bitcoin Exchanges
Some of the best places to buy Bitcoin online include:
- Coinbase Pro
- Cash App
Coinbase is one of the most trusted cryptocurrency exchanges online, with over 35 million users who rely on its robust platform. It enables anyone to buy, sell, and trade coins while offering an in-house cryptocurrency wallet – so you don’t have to leave the platform for all your trading concerns!
Coinbase is available in over 100 countries, with limited functions depending on your location. It’s a great all-in-one website for beginner and veteran traders!
Coinbase Pro is a step up its entry-level platform, with a professional user interface and high-level functions––perfect for seasoned investors. It was specifically made for active traders who trade cryptocurrency daily. In addition, you can enjoy lower transaction fees and cryptocurrency insurance protection of up to $250,000.
However, note that Coinbase Pro has no mobile app, so you can’t monitor your trades on the go. It’s also not a beginner-friendly platform, so you may want to try the beginner Coinbase first before exploring higher grounds.
Binance is a widely popular crypto exchange platform with over more than 500 available coins to choose from and an easy user interface. While it is not as basic as Coinbase, Binance is preferred for many cryptocurrency beginners, especially in South East Asia.
It also offers complex and high-risk trading options such as Futures and Margins but we recommend staying out of those since they can instantly liquidate your account if you do not know what you are doing.
FTX is another popular crypto platform but it is more focused on short-term trades than long-term investments. This makes it especially pleasing for seasoned traders. It has plenty of robust trading tools such as risk-vs-reward ratios, accurate stop-losses, auto-sell on targets and even leverage.
That said, it is not an exchange platform for beginners and investors. However, it also provides lower transaction fees compared to its competitors - mainly Binance.
Cash App is a popular instant money transfer application in the US and the UK. Think of it as a faster and more user-friendly version of Paypal. Beyond fiat transfers, however, Cash App allows you to purchase Bitcoin directly from your balance. You’ll also receive a free VISA debit card to spend BTC on purchases. It’s a super-convenient way to get into cryptocurrency, especially if you’re still on the fence about really committing to a big exchange.
While Cash App isn’t officially available in Australia, you can circumvent this issue using a VPN to access the platform. As a result, it’s one of the fastest ways to buy Bitcoin!
Buy Bitcoin is an Australian exchange that offers one of the most trusted and reliable platforms for local Bitcoin purchases. Unlike other exchanges, they don’t charge transaction fees and, instead, allow you to provide any wallet address to transfer your assets to. The only caveat to this platform is that they take a 3.9% commission, plus a surcharge depending on your payment method. View their fees table to better understand how much you approximately have to pay for a specific purchase.
Buying Bitcoin allows you to buy and sell BTC and buy Ether but currently doesn’t support other altcoins. They also offer investment services––though for niche circumstances.
The platform CoinSpot has been around since 2013 and has since become a favorite among Australian investors. It’s a trusted exchange with super-fast trades and a high level of security. It supports over 270 coins, so you have plenty of options apart from BTC. CoinSpot also offers a cryptocurrency wallet for free, with some of the fastest AUD withdrawals on the market.
A big upside to CoinSpot is that it’s fully supported in Australia, which means that you can enjoy the full array of functions and don’t have to use a VPN!
The Role of Bitcoin In the Modern Economics
With more news circulating Bitcoin that may make or break its value, it is easy to see why people are getting more aware of cryptocurrency. Furthermore, with BTC slowly becoming a legal tender in various countries, big companies accepting Bitcoin as a proper form of transaction, and cryptocurrency in general is providing more freedom for payments between businesses, the role of Bitcoin in society is becoming more prevalent than ever.
This is the “utopia” that many people are hoping for; a new way of payment, free from the control of the state and corporations. This is where “decentralization” takes place - transactions wherein the government does not get involved.
If the relevance of Bitcoin continues as an agreement of businesses and high-profile people with power, then we might see a new phase of transactions in society right after the birth of the US dollar.
Bitcoin is a new way of making money and a modernized investment for anybody with good capital. While it may be considered the riskiest form of investment that topped off the stock market, its potential gains are the highest as well - given that you know when to sell off and when to buy. If you don’t find your portfolio gaining profit yet, remember that time in the market beats timing the market: meaning you just have to wait for a long period before you see your investment bloom into your retirement money.
The cryptocurrency market is also the most accessible form of investment today since you can start off with just $10 and grow from there with just a few taps on the phone. All you need to do is have a crypto exchange platform of your choice and a wallet to securely store your investments.
As more people become aware of Bitcoin’s presence, the world may find itself in a new phase of business where cryptocurrency could possibly take over the dollar exchange, resulting in the overthrow of centralized governments.
If you plan to invest in Bitcoin, keep in mind two crucial tips: buy low, sell high, and be patient. While it is easy to find yourself in a Bitcoin position, earning a large sum of money in return will take a span of a few months to a few years, depending on how long you want to wait. Above all, never forget Warren Buffett’s words: “Be fearful when others are greedy, be greedy when others are fearful.”
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