“Successful investing takes time, discipline and patience.” These are the words of Warren Buffet, an American business magnate, a successful investor, and philanthropist and is currently the chairman and CEO of Berkshire Hathaway Inc. The same principle applies when you invest in cryptocurrency.
Current trends show that more and more people have been getting into investment. Investors are also becoming younger and younger. They are looking for ways to spend their money with the expectation of achieving a profit or material results. To do this, they put it into financial plans, property, shares, cryptocurrency, or by using it to develop a commercial venture.
Investing is particularly becoming popular among younger generations. The concern, though, is that this group of people can be considered as follower investors. This means that they are passive, and they lack interest in or have little understanding of money or investing. They do not have their own ideas, so they just follow the lead of their associates resulting in loss or no gain of investment or funds.
On the brighter side, a lot of people have also succeeded and are succeeding in their investment journey. You can find some aspiring crypto millionaires on the Bitcoin Era platform.
Questions have been asked as to why and how to start the investment process. If you are a newbie, you may resort to meeting a financial advisor to ensure that your money and effort won’t be wasted. This article will help you to know how to buy investments, especially in Bitcoin, the world’s first and most popular cryptocurrency.
How you can own bitcoin
The first step that investors take into the world of cryptocurrency is purchasing bitcoin. People are used to traditional financial products, so this stage can be nerve-wracking and foreign.
From the value of $3,237 in December 2018, it has risen to $65,000 in November 2021. Like other cryptocurrencies, bitcoin is risky and liable to change rapidly and unpredictably to worse when compared to many proven investments, such as stocks, bonds and mutual funds.
Bitcoin can be bought through exchanges and stockbrokers or from other owners. Anyhow, always bear in mind the risk of investing in digital assets.
The following is a step-by-step guide to purchasing bitcoin
1. Choose a platform exchange where to buy bitcoin
Do your own research before making the final decision. After the decision is made, you have the option to do cryptocurrency exchanges or traditional brokers. Bitcoin can be purchased from several cryptocurrency exchanges. There are heaps of cryptocurrencies to choose from in the market. Fees and consumer protections are to be considered too. Make sure you comprehend everything before picking a source.
Currently, the number of traditional brokers is few. Robinhood was the first mainstream investment broker to offer bitcoin. It is available in most US states, and it doesn’t charge fees for bitcoin trades.
Here are the legit brokerages and cryptocurrency exchanges that offer bitcoin:
6. SoFi Active Investing
7. Trade Station
Coinbase gives you access to buy and sell about 100 cryptocurrencies. It is followed by Kraken with more than 90 cryptocurrencies, Binance.Us with 60 and Gemini with 50. Sofi Active Investing, Robinhood, Tradestation and Webull offer crypto for bitcoin, bitcoin cash and Ethereum, respectively.
Bitcoin ATMs are also an excellent way to buy or invest in bitcoin. It works just like a normal ATM that enables you to buy and sell bitcoin. In the USA, Coin ATM Radar has 27,000 bitcoin ATMs. Buying coins directly from other bitcoin owners is also possible, but you need to be very wary when doing so.
Proshare launched the first bitcoin Exchange-traded funds or ETF in October 2021. This allows you to invest in futures contracts for bitcoin. Grayscale funds can be bought through many discount brokers as they are publicly traded. These are the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Classic Trust (ETCG). There is an extra fee to buy bitcoin through a traditional exchange, but despite this, some investors are willing to do that as they don’t need to worry so much about their wallets and storage.
2. Decide on your bitcoin storage
There are two options for you to choose from as to where you want to store your bitcoin; we call them digital wallets. The first one is called a hot wallet, where bitcoin is stored by a trusted exchange or provider in the cloud and accessed through an app or computer browser on the internet.
It is offered for free to use by any trading exchange you choose to join. It is recommended to choose a wallet from a provider other than an exchange because many of them suffered from security contraventions in the past, and such services don’t provide insurance and security to be used to store money like a bank. Coinbase, Electrum, Blockchain and Mycelium are examples of hot wallets providers.
A cold wallet, on the other hand, is a small, encrypted portable device that allows you to download and carry your bitcoin. These are purchased for about $100, indeed expensive, but are more secure than hot wallets. Trezor and Ledger Nano are good examples of this kind of wallet.
3. Be ready to make the right purchase
It is necessary that you link your bitcoin wallet to your chosen bitcoin exchange first. Then, decide as to how much bitcoin you want to buy. A single bitcoin costs an arm and a leg; however, BTC or XBT can be bought and sold for fractional shares. That means your initial investment in this Bitcoin platform could be as low as $25.
4. Keep track of your bitcoin holdings
Since owning a bitcoin can create a complex tax situation, you can sell your bitcoin to others if and when the value moves higher, which is called day trading, or you can also buy and hold your stocks for as long as you want if you see a future for bitcoin as a digital currency.
How to become a successful bitcoin investor?
All investors want to succeed. But most of the time, success is so elusive that only very few people come out victorious in lucrative endeavours. This is especially true in crypto investment, given that the market is highly volatile and unpredictable. It takes discipline and clever strategies to secure investment returns.
The good news is, you can achieve success by studying the market, especially price movements, by using fundamental and technical indicators. You can also learn from experts in the industry to know some hacks to give you an advantage.
Taking the first step in whatever you’ve planned to do, especially growing your money through investment, is always difficult and risky. But with the proper attitude, the right skills and enough guidance, you can avoid failures and are able to make better and wiser decisions that will eventually and hopefully lead to success.