After researching the market, understanding the dangers involved, and taking care of any additional urgent financial concerns, the next step in bitcoin trading is to make a transaction.
Experts recommend staying away from the vast majority of cryptocurrencies until you learn more about them. The value of cryptocurrencies, particularly newer or lesser-known coins, may change dramatically from hour to hour. While even the most well-known cryptocurrencies like Bitcoin and Ethereum aren’t immune to price swings, their track records of long-term growth are more reliable.
Bitcoin is the most valuable and frequently held cryptocurrency, and with values tumbling in the crypto and stock markets, now may be a good moment to purchase if you’re okay with the dangers and interested in investing.
Bitcoin Investing: 4 Simple Steps
1. Pick A Trading Platform
Although plans are in the works, you currently cannot buy Bitcoin via a traditional financial institution. In order to convert your U.S. dollars into Bitcoin or other digital money, you must use a cryptocurrency trading platform at the present time.
While there are literally hundreds of cryptocurrency exchanges available, some of the most well-known are Coinbase, the-bitsoft360app.com, and Kraken. Cryptocurrencies may be bought and sold on these online marketplaces.
2. Make A Deposit
When creating an account on an exchange, you may be asked for personal information such as your Social Security number, ID, and employment history.
Typically, you may fund your exchange account with U.S. dollars by linking a bank account or debit card. When financing an online gaming profile, money transfers typically offer cheaper fees than card options.
Don’t confuse adding money to your account with actually buying cryptocurrency. You should never leave cash in a savings or checking account if you want to invest it. After adding funds to your account, you’ll still have to convert them into Bitcoin.
3. You Should Definitely Make A Purchase
In order to make an order for Bitcoin, you must first link a payment method. The steps you do here may alter based on the currency exchange you employ.
To acquire Bitcoin at the current rate after fees, all you need to do is input the amount in dollars you wish to exchange and use a site like Coinbase or PayPal.
Market orders and limit orders may both be available to you on a more robust trading platform, such as Coinbase Pro. A market order allows you to acquire cryptocurrency at the present marketplace rate. With a limit order, you may set the highest purchase cost for the coin. When the value of the currency hits that threshold, purchases will be made mechanically.
After the catastrophic crypto market meltdown in June, a single Bitcoin is now worth roughly $20,000, so if you buy one, you’ll probably be buying a fraction of a coin. Your contribution will be shown on the exchange as a fraction of the total Bitcoin in circulation. At its peak in mid-July, one Bitcoin was worth around $34,000, thus an investment of $1,000 at that time could yield 0.029 Bitcoins.
4. Keep Your Stuff Secure
This is the most straightforward option for new investors since most exchanges let you keep your money where it is. If you wish to take extra precautions for the safety of your digital assets, you may move them to a cryptocurrency wallet.
A “wallet” is a piece of software designed specifically for storing bitcoin. When your cryptocurrency platform of choice also offers a wallet service, you might well be allowed to easily transfer your bitcoins from the marketplace to a safer wallet. A third option is to employ cold storage on an offline hardware device or a third-party piece of software.
You may purchase cryptocurrency using many different services, but some of them, like PayPal and Venmo, don’t let you transfer your money to your own hardware wallet. Before making a purchase, think about whether or not you’d want that feature, whether it’s for the offline safety of your assets or the possibility that you’ll want to trade on a different platform in the future.
Other Options For Purchasing Bitcoin
You may now purchase cryptocurrency using an existing account with a number of popular online payment systems. Nonetheless, not every investor should consider them.
Unfortunately, your private keys will always be stored with PayPal or Venmo rather than in your own crypto wallet. Robinhood has just announced that it would provide a cryptocurrency wallet service, allowing users to safely store and transfer their money to and from external wallets. However, for crypto fans who adhere to the widespread crypto slogan “not your keys, not your coins,” platforms without the possibility to shift your holding off-platform fall short. It’s important to compare the rates you’ll pay there with those of more conventional exchanges since their fees for buying and selling cryptocurrencies may be rather expensive (and they usually only offer a handful of coins or only Bitcoin).
However, these applications may provide a convenient way to acquire Bitcoin. Instead of utilizing an exchange like Coinbase or Gemini to purchase Bitcoin, novice investors may find it easier to use a service like Venmo or Cash App. You should be aware that some applications may restrict your ability to move your crypto assets to another platform if your crypto holdings grow to a certain size.
The same caution should be used with any financial investment: learn as much as possible before putting your money down. Make sure that financing retirement accounts or paying off high-interest debt won’t suffer because of your crypto investments. Experts advise allocating no more than 5% of your portfolio to cryptocurrencies.