If you’re looking to get into the cryptocurrency game, you’ll need to know how to buy Bitcoin. In this Bitcoin 101 article, we’ll teach you everything you need to know about buying Bitcoin. We’ll cover how to find a reputable Bitcoin exchange, how to set up an account, and how to make your first purchase.
So whether you’re just starting out or you’re a seasoned pro, read on for all the info you need on buying Bitcoin.
Information to Know Before Buying Bitcoin
When it comes to buying Bitcoin, there are a few key things you need to know. Here’s a quick rundown of the most important info:
- Bitcoin is not legal tender in any country
- You can’t buy Bitcoin with cash; you’ll need to use a bank account or credit card
- Bitcoin prices can be incredibly volatile and can go up or down quite quickly
With this information in mind, let’s explain how you can start buying Bitcoin.
Select a Crypto Trading Service
The first thing you’ll need to do is select a Bitcoin exchange. You can think of exchange like Coinbase or Binance as the place where buyers and sellers come together. Once they’ve agreed on a price, they can execute the trade. But before you dive into your research, keep these things in mind:
You want to find a reliable cryptocurrency trading service that won’t scam you or cause issues with your bank account.
Not all crypto exchanges are created equal. Some will be better suited for certain types of users than others (e.g., if you’re a beginner, it may make more sense to use Coinbase over Kraken)
Some crypto exchanges charge higher fees while others are free. Just remember that “free” doesn’t always mean “better”.
Do Your Research
Once you’ve selected a crypto trading service, it’s time for the next step: research. You’ll want to look at things like the exchange’s reputation, how user-friendly the platform is, and what payment methods are accepted.
You should also take into account your own needs and preferences. For example, if you’re looking to buy Bitcoin quickly and easily, you may want to focus on exchanges that have a high liquidity rate. Conversely, if you’re more interested in investing in altcoins, you may want to consider exchanges that offer a wider variety of coins.
Choose a Bitcoin Wallet
Once you’ve selected your exchange and done some research, it’s time to choose a Bitcoin wallet. A Bitcoin wallet is where you can store the digital currency before transferring it back into fiat money (e.g., USD or EUR).
You’ll need to decide whether you want a hot or cold storage wallet. Hot wallets are connected to the internet while cold wallets aren’t; this makes them more secure if hacker attacks occur but also means they’re less accessible when compared with their online counterparts.
Determine How Much to Invest in Bitcoin
Now that you know how to buy Bitcoin and which exchange to use, it’s time for the final step: determining how much to invest. This can be tricky, as Bitcoin prices can be incredibly volatile.
Some things you may want to take into account when making this decision include your financial situation, investment goals, and risk tolerance. If you’re not comfortable with taking on a lot of risks, it may be wise to start off small and slowly increase your investment over time.
Make Your First Bitcoin Purchase
Once you’ve decided how much you want to invest in Bitcoin, it’s time for the final step: buying Bitcoin.
This process is fairly simple. All you need to do is create an account with the crypto exchange of your choice, deposit your fiat currency, and buy the Bitcoin you want.
Depending on the exchange you use, this process may take a few minutes or a few hours. Just be patient and remember that good things come to those who wait.
Start Out Small
As we mentioned earlier, it’s always a good idea to start small when investing in Bitcoin. This way, you can minimize your risk if the digital currency doesn’t perform as well as you’d hoped.
Remember, Bitcoin is still a relatively new technology and there’s no guarantee that its price will continue to rise. So if you’re not comfortable with taking on a lot of risks, it may be wise to invest a smaller amount at first and increase your investment over time.
Choose Your Trading Strategy
Now that you know how to buy Bitcoin, it’s time to choose a trading strategy.
There are many different strategies you can use, but here are a few of our favorites:
- Long-Term Investing: This is where you hold your Bitcoin for a long period of time with the hope that its price will increase over time
- Day Trading: This involves buying and selling Bitcoin within the same day in order to make profits from short-term price fluctuations
- Arbitrating: This is when you take advantage of price differences between different exchanges in order to make a profit
Create Stop-Loss Orders and Profit Targets
Now that you’ve chosen your trading strategy, it’s time to create stop-loss orders and profit targets.
A stop-loss order is when you automatically sell Bitcoin if its price drops below a certain point. This can help mitigate losses if the market suddenly turns against you, according to bytefederal.com.
Profit targets are where you automatically sell Bitcoin once its price reaches a certain level. This can help lock in profits as well as minimize risk.
The best part about these two types of orders is that they’re automatic so there’s no need for constant monitoring or manual intervention. You just set them up once and let them do their thing.
Diversify with Other Cryptocurrencies
Bitcoin isn’t the only cryptocurrency on the market. In fact, there are now many different digital currencies available and it’s important to diversify your portfolio by investing in several of them.
This way, if one currency performs poorly, you still have others that may perform well. It’s also a good way to hedge your bets against future price fluctuations.
Bitcoin 101: The Final Verdict
As you can see, knowing how to buy Bitcoin is a simple process. This Bitcoin 101 guide should give you a gist of how this process works.
Do you want to learn more about where to buy Bitcoin? If so, check out our blog for more helpful articles.