Bitcoin investing comes with numerous rewards. This crypto is accessible, meaning anyone can invest it regardless of who they are or where they live. Bitcoin is a decentralized asset whose management isn’t controlled by any institution or management. It’s among the top-performing cryptocurrencies, guaranteeing a significant ROI. Bitcoin investing isn’t easy, especially for newbies. However, taking time to research and understand the coin can result in profitable investments. Here’s a beginner’s guide on how to invest in Bitcoin.
1. Join a Bitcoin exchange
Crypto exchanges are online platforms that make buying and selling Bitcoin easier for investors. Since most platforms provide Bitcoin and not all are legit, you should be careful when looking for the most appropriate option. To ensure the crypto exchange you’re considering offers legitimate services, check their physical address. If none is provided, avoid using that crypto exchange to buy Bitcoin. An exchange’s openness regarding their physical address signifies legitimacy.
Additionally, if your account is hacked, addressing these concerns with the Bitcoin exchange and involving regulators becomes easier. Look at the conversion rate to determine the amount of money to set aside for your Bitcoin investment. The rate also tells you if it’s an excellent time to trade. You should also consider the Bitcoin exchange’s fees, security measures, and minimum investment requirements.
2. Get a Bitcoin wallet
A Bitcoin wallet stores your crypto keys and allows you to access your coins. The funds are kept on the Bitcoin blockchain and require a private key to authorize the coins’ transfer to somebody else’s wallet. It lets you receive and send Bitcoins. The wallet doesn’t keep physical money. Instead, it saves the cryptographic data required to send transactions and access Bitcoin addresses. There are different types of Bitcoin wallets catering to various needs. They differ with regard to accessibility, convenience, security, and more.
3. Link your exchange to a payment alternative
Most exchanges allow users to directly link their bank accounts or connect to debit or credit cards. While you can buy Bitcoin using a credit card, its price volatility inflates the total crypto purchase cost of the token when added to the card’s interest fee.
4. Determine how much to invest
Considering the crypto market’s volatility, investing in Bitcoin as a beginner can be challenging. While the amount to invest differs from one investor to another, considering the following factors can help you decide, including:
- Discretionary income: It refers to the funds that remain after covering all your core expenses. The amount you put in Bitcoin shouldn’t exceed your discretionary income
- Volatility: To decide how much to invest in Bitcoin, note that your investment’s value can decline significantly within a short period
- Risk appetite: Every investment comes with an inherent risk level. Unlike other investments, Bitcoins can be riskier. So, invest the amount you can lose comfortably without injuring your financial health
- Diversification: Considering how risky crypto investing can be, you shouldn’t put all your money in Bitcoin alone. Spread your crypto portfolio to limit specific risks
Once you determine how much to invest, look at your exchange’s order types and place a Bitcoin order.
5. Manage your Bitcoin investment
After purchasing Bitcoin, you can use the coins to make online transactions and consider performing day trading. You can also hold the tokens for an extended period until their value appreciates.
Endnote
While Bitcoin investing is profitable, it’s challenging for beginners. However, following this guide can help.
