A 4-Step Guide on Buying Bitcoin
When Bitcoin was launched in 2009, millennials only saw it as an interesting phenomenon. But futurists predicted that the cryptocurrency industry would flourish, and they were not wrong. Over time, these digital assets have attracted millions of investors, and some analysts even believe that blockchain technology will be an invaluable tool for many businesses. But despite its growth and opportunities for gains, cryptocurrencies remain highly volatile, including bitcoin.
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To invest or not to invest in Bitcoin; that’s the question
The successful stories portrayed in the media are often the reason why many are lured to the crypto world. Some may expect a smooth experience when starting their journey in this exciting market. But that’s far from the truth. The industry has its flaws, and investors must keep their feet on the ground. Everyone would love to become a millionaire overnight, but let’s be frank: that’s not quite possible in real life. While luck may play a role in your success as an investor, it won’t get you far in the long run. A better way of approaching the industry is to establish your goals and plan an efficient strategy. It’s true that Bitcoin’s price has risen significantly at times, but not everyone has gotten rich from that. Due to crypto’s volatility, it’s impossible to figure out precisely when you should buy or sell. So, what is the solution? Luckily, following some basic guidelines will help you navigate this complicated maze.
As a rule of thumb, you shouldn’t dedicate more than 10% of your portfolio to cryptocurrencies. And this one may be obvious, but you should never invest in an asset you don’t understand, so it’s imperative to take the time to learn as much as you can about it. Whether or not you should invest in Bitcoin is something only you can decide, and it has a lot to do with your risk tolerance. If you know you are disciplined and can come to terms with the uncertainty in the industry, it may be worth getting into the game. But you should first assess your finances and determine how much money you’re willing to put at risk. It’s always better to start small and gradually invest more once you get a grasp of the industry.
If you’re considering buying Bitcoin, it’s imperative to weigh the risks and be prepared for the unexpected. In the crypto space, there is no such thing as a guarantee, only speculations. But you know how they say, nothing ventured, nothing gained. That said, you should never trade based on emotion and only make smart decisions after doing comprehensive research.
How to buy Bitcoin
Given its value, Bitcoin has become synonymous with cryptocurrency, and many choose this asset when they start investing for the first time. If you don’t know how to buy bitcoin, we’re here to get you through the process so you can buy bitcoin online without much hassle. Let’s dive into it!
Select an exchange
Whether you buy BTC or other cryptos, the first step is to choose an exchange where you can meet other buyers and sellers. Hundreds of exchanges are available, but as a crypto newbie, it’s best to pick a platform that’s easy to use and has increased security and low fees, such as Binance. Ideally, you want to select an exchange that provides a bitcoin wallet; otherwise, you’ll have to look for one yourself. While it’s also possible to buy bitcoin on Paypal, this option may not be the best because you may often not be able to withdraw your coins, and as a result, you’ll have to use another platform to hold them. That would involve selling and rebuying your holdings; let’s be honest, that doesn’t sound fun!
Store your BTC safely
Many crypto exchanges include a wallet where you can store your BTC safely. But the problem with this is some people may not feel comfortable knowing their crypto is connected to the internet, where hackers could easily steal it at any time. Major exchanges, however, ensure clients will be reimbursed if such a thing happens. But if you want to eliminate the risks as much as possible, you can store your BTC offline in a cold wallet. Unlike hot wallets, they are believed to be more secure, preventing unauthorized access.
Make your first purchase
So, you’ve chosen an exchange and connected your wallet to it. What’s next? Well, this step is probably the easiest, and it implies figuring out how much BTC you’ll purchase and then placing your order on the platform. Depending on the exchange, you may have to tap a button or enter the symbol used for Bitcoin (BTC). A single Bitcoin is pretty expensive – it costs thousands of dollars- but you can buy a BTC in portions, which means your first investment doesn’t have to be huge. More precisely, you could put in a small amount, like $25.
Keep track of your investment
If day trading sounds viable, you can buy Bitcoin now and only sell it when its value increases. You can use different strategies, such as spread trading, fading or trend following., or swing trading. What you pick is up to you – ultimately, it’s all about finding what works best for you and feeling confident using it. But it’s essential to be patient during the process, as finding the right strategy can take time. Plus, the changes in the market may require you to adjust your strategy. If you believe in the future of Bitcoin as a digital asset, maybe you’d instead opt for long-term holding. In both cases, you should consider the pros and cons and decide which one of the two suits you best. Ultimately, it all comes down to your skills, funds, risk tolerance, and how much you’re willing to dedicate to crypto.
The bottom line
Buying bitcoin can be tempting when the price skyrockets. But despite its potential lucrative opportunities, you should still approach the industry cautiously and only allocate some of your funds to it. Once you decide to buy bitcoin, following the tips above will help you start off easy.
Chris Evan was born in Quebec and raised in Montreal, except for the time when he moved back to Quebec and attended high school there. He studied History and Literature at the University of Toronto. He began writing after obsessing over books.