Bitcoin is arguably no.1 cryptocurrency in the world. If you are asking a question about investing in digital assets, Bitcoin tends to be included in the recommendations list.
Purchasing Bitcoin can be a great way to start your journey in new digital investment. But we agree not to overlook the fact that this kind of investment is high-risk, and high-return. The rule of thumb is to never purchase more than anything you can afford to lose. So, if you are breaking your bank just for purchasing Bitcoin, skip this article right now.
If you’re new to Bitcoin and want to know how to buy it for investment, you could proceed reading this article until it’s finished. Here are the steps to buy Bitcoin.
Where to buy your Bitcoin?
Buying bitcoin has been a lot easier than before. There are a lot of exchanges which you can join to purchase bitcoin. There are also conventional brokers who include Bitcoin in their services. But for beginners, I’d suggest you focus on Cryptocurrency exchanges because these services’ focuses are clear.
Just like the other kinds of services on the internet, you will need to conduct your own due diligence to find the most suitable exchange for you.
As mentioned, you will find dozens of options when browsing around the internet. But only the best exchanges can provide a good experience for you. For instance, Coinbase is a popular option in the US. It is because US users can easily connect their Exchange account with their bank account. Besides Bitcoin, Coinbase also offers the exchange of various crypto like Ethereum, Ripple, Litecoin, etc. It can be a great start for you if you plan to buy other cryptocurrencies as well.
Coinbase charges the spread of each transaction is around 0.5%. The fee is different depending on your region and your payment type. For users who use a US bank account, there will be a 1.49% fee. You will want to check on their fee details first before proceeding.
Perhaps you will also want to check on Finance for cheaper spreads. It charges a 0.1% fee for all crypto trades. There’s also a fee for withdrawal. In many exchanges, you will need to use cryptocurrency to purchase Bitcoin. But Balance is different, you can add other options like a credit card, wire transfer, etc.
You will also want to check other top rated exchanges like BlockFi, Gemini, Coinmama, Bisq, etc.
There are also some conventional brokerages where you can buy bitcoin in their exchange. Robinhood is one of the best. It is a popular brokerage that serves clients in the US. For international users, you could consider checking on eToro. It is a social trading platform that also includes Bitcoin. With the rising of Bitcoin popularity, we believe that other brokers will also have plans to offer crypto trading.
Some countries have also installed Bitcoin ATMs in various locations. In the US alone, there are over 7,000 bitcoin ATMs around the US. These work like normal ATMs where you can use them to buy Bitcoin and sell it. You can also check if the Bitcoin ATMs are available in your country or not.
Your due diligence
Setting up a cryptocurrency account is a start. And you need to take this into consideration seriously. To fund your bitcoin account, there is information that you need to provide. That includes your ID number, bank account, credit card, and your picture ID. Some exchanges may activate the “liveness” feature to make your ID verification. Well, it is actually good news. That means they don’t want someone else to use your personal identity to buy bitcoin from their website.
Change your password regularly to keep your crypto account and digital wallet safe.
Some exchanges accept credit cards. While some people are reluctant with this option, it has never been a good option if you are dealing with high-risk investment. So, no credit card and you will be fine.
Focus on the providers who are insured and licensed. They must protect you against the online breaches and other risks. When buying your bitcoin, do it at home with private internet connection. Activate your VPN service in order to protect you from online breaches. Never buy or sell your bitcoin at a public place with a public wifi connection.
Hot wallet or cold wallet?
It is one of the most important things you need to decide. Storing your bitcoin means making sure that your assets are kept safe and sound. There are two ways to store Bitcoins: hot wallet and cold wallet.
The hot wallet is stored by exchanges or service providers in the cloud. You will access the hot wallet via the dedicated app, software, or web-based software. All in all, you will need internet connections to access it.
Each crypto exchange should come with a free bitcoin hot wallet. So, when you buy bitcoin through their platform, the bitcoin will be stored in your particular hot wallet.
You can also choose third-party hot wallet providers such as Ledger Nano S, Exodus, Trezor Model T, Mycelium, Blockchain, Coinbase, and so on. I suggest using Blockchain or Coinbase for your hot wallets. I’ve read some reviews and they tend to be safer options than other hot wallet providers.
The cold wallet is more like a physical wallet. It usually comes in a small and compact portable device that provides access to your bitcoin. Through this device, you will be able to download and carry around your bitcoin. Most of the models look like flash disks.
The cold wallets can cost a lot but these are much safer and secure than the hot wallets.
There are dozens of cold wallet providers that you can find on the net. But the most popular ones to check are Ledger Nano and Trezor.
The next thing you will need to do is to link your bitcoin wallet (whether it is a cold wallet or hot wallet) to the bitcoin exchange of your choice (e.g.: Coinbase). After the wallet is linked to the exchange, all you need to do is to buy your bitcoin.
You could buy the bitcoin when the price is still lower and sell it when the price moves up.