Bitcoin is the most popular type of cryptocurrency in the market today trading under the symbol BTC. Despite the fact that Bitcoin has become one of the biggest and most talked-about phenomenons in the financial world and crypto space, too many people still do not have any idea how thay can actually buy bitcoin. This lack of knowledge has created strong myths that buying and selling cryptocurrencies is difficult and incredibly complex. In reality, nothing could be further from the truth, especially in this day and time. Bitcoin is incredibly easy to purchase and this post will outline exactly how to buy bitcoin.
But before you go run out loading up on bitcoin, we need to discuss the risks.
Risks of Buying Bitcoin
Remember that Bitcoin (BTC) is not really an investable asset, it’s more of a speculative trade. Keep in mind that no one knows whether bitcoin’s value will skyrocket over the next few years or be completely worthless. There are thousands of cryptocurrencies and Bitcoin is currently the most popular one. No one knows who will win the blockchain wars since Bitcoin, Etherum, Ripple, Litecoin, and countless others are fighting for space in the cryptocurrency market. I trade bitcoin positions but I do not hold them for long periods of time as I do with stocks, bonds, and mutual funds. Bitcoin is a gamble and I don’t take major positions in it. I risk a few thousand dollars every now and than. I never risk money that I cannot afford to lose because Bitcoin is subject to wild price swings making it a volatile currency to invest in.
The other risk to investing in bitcoin is that it is often the target of hackers. Hackers stole over $40 million dollars from the the crypto exchange Binance in May of this year. Over $1 billion dollars in bitcoin has been stolen from major exchanges this year. Unlike other asset classes, bitcoin cannot be tracked, reclaimed or recovered. Bitcoin is a digital currency and not a physical one. In other words, if someone steals your bitcoin, you’re out of luck. There is no way to get your money back.
Now that we have gone over the risks, let discuss a few ways to buy bitcoin.
The first thing to do is to sign up on a MAJOR cyptocurrency exchange where you can buy, sell, and store your bitcoin. Stick with the major exchanges as some of the smaller ones have been known to be Ponzi schemes or have shut down abruptly costing investors fortunes. Coinbase is the largest and most popular digital cryptocurrency exchange used by many crypto buyers. It’s a trusted site. The other popular bitcoin exhanges include Trezor, Binance, Electrum, Robinhood, and Exodus. All of these sites offer what is known as a Bitcoin wallet.
What is a bitcoin wallet? A bitcoin wallet is a program or service where your bitcoin is stored. A bitcoin wallet acts like a physical wallet storing all of your private digitial currency in private keys. These private keys allow you to access your Bitcoin address and id used to track your bitcoin ownership since the asset is technically not stored anywhere. Your bitcoin wallet is password protected and controlled by you allowing you to buy, sell, exchange or use bitcoin. There are many digital wallet sites out there, so do your research in order to determine which one works best for you. Wallets can either be mobile apps or desktop hardware based depending on your preference. Bitcoin wallets are encrypted which provides some level of security but that does not make them hacker proof. Be sure to pick the right bitcoin wallet for you based on your needs, location, and your plans for your coins when you actually buy them and hold them in your possession. Most digital wallets provide support for iOS, Windows, Android, macOS, and many other systems.
Opening A Bitcoin Account
Setting up a wallet on a cryptocurrency exchange is really easy as well, whether you use a mobile device or a computer. It only takes a few minutes and you can start buying bitcoin almost immediately. You just need to fund your account using your credit card, debit card, or bank transfer depositing a small amount of money in it. With this money, you can purchase Bitcoin from sellers in a manner of minutes.
I have personally found that buying bitcoin through apps like Cash App is the easiest thing. Simply download the app, fill out some basic details, and you will be done in a few minutes. My favorite app for buying bitcoin is Cash App. Apps such as Cash App provide an easy way to buy bitcoin in small denominations and allow for quick monitoring of my account balance. I also like that I can use Bitcoin cash to make transfers and payments on Cash App. Cash App charges no fees when I buy or sell BTC.
After you buy your Bitcoin, you can do whatever you want with it. You can use it to buy other currencies, you can spend it for goods or services with online merchants and services, or you can simply store it in your wallet. Doing so might allow you to cash out at a later date, and possibly get more money for the coins than you paid. Alternatively, if the price goes down, you might get less money for the same coins. Again, remember that Bitcoin is highly volatile and that its price can go up or down at any time. This does not make it a particularly safe purchase.
I have noticed that traders tend to do best when buying Bitcoin. The best thing to do with Bitcoin is buy it when the price crashes and sell it as it creeps higher. This means trading in and out of positions over the course of a few days or a few weeks. Bitcoin is not a wealth building strategy but you can make some money trading it if you time it right. It’s a gamble but could pay off.