How to Invest in BTC
8 min readTable of Contents
When it comes to the crypto market, BTC still remains the backbone of the entire crypto world in relationship to price and currency value. From a financial point of view, it serves as a hedge against government and central banking confidence just like the role gold plays in its inverse correlation with the US dollar currency.
Relatively, BTC as a digital currency is still in its early stage, so it is difficult to say for certain what is, and what is not when it comes to crypto investments. It’s not just about how to invest anymore but also where to invest. This guide is going to attempt to do justice to the concept of BTC investments.
Compared to other investment opportunities with fiat money currency, it is safe to say BTC is still young. Young opportunities like this are usually considered risky, the nature of BTC is also quite volatile, with margin and leverage trading as high as x100 leverage (this is 10 times higher than traditional investment opportunities).
Overall, investing in BTC is risky, but also profitable. It somehow presents itself as an alternate option of making money apart from mining BTC. If you can capitalize on the opportunities afforded when you are investing in BTC, you could be smiling in the bank in no time.
Step-by-step guide
Few years after BTC was first traded in exchange, numerous exchanges have sprung up since then. Today people can either choose to buy BTC on crypto coin currency exchanges or directly from other people through P2P platforms. There are also payment methods that will make BTC transactions easier for you, from cash to credit cards, wire transfers, and other digital currencies.
If you want to buy a BTC token, factors you need to put into consideration are who is the seller? How urgently do you need BTC? What region are you buying from? After answering these questions, you then can determine how you want to purchase the token. Below is a step by step guide:
- Create a BTC wallet. Opening a wallet is pretty easy, it is just like opening a bank account.
- Decide whether you want a person-to-person marketplace or exchange.
- Decide on the amount of BTC to be purchased, then enter your email and signup on the platform of your choice.
- Select your payment method for cash deposits. Then you will see a list of payment options on the left-hand side of the page in which you will see Walmart2Walmart listed.
- Choose a payment method for your cash deposit, you’ll be given a list of numerous payment methods, pick the option that best suits you.
- Once you have an account, you can go ahead and acquire your cryptocurrency.
Step One: Get a BTC wallet
The two essential trade strategies are you purchase BTC then and hold, or trading. If your plan is to hold, then you have to be mindful of the type of wallet you are getting. One mistake traders make is holding your BTC on an exchange; this is a risky way to go about investing in cryptocurrency.
Your choice of cryptocurrency wallet is important because blockchain technology means everybody’s balance and address are public. A high value of BTC in your wallet makes you a target for hackers, scammers, and thieves. Fund your wallet using your credit card, then buy when BTC’s price is favorable or you can choose to trade on an exchange.
Step Two: Choose an exchange
Different countries have a cryptocurrency exchange that favors that region, for instance, US, UK, and Canadian customers, Coinbase is the most popular cryptocurrency exchange which serves both as a hot wallet and a software wallet.
Before you start investing, do a little research on the platform that best suits your region. On these crypto exchange platforms, you can easily see BTC price as well as that of other crypto coins.
Once you have chosen the crypto wallet of your choice, the next step is to fund the wallet, there are different ways to go about this, you can choose between cash, credit or debit cards, BTC cards, wire transfers, or other cryptocurrencies.
It is important to know that even if two exchanges are offering similar cryptocurrencies, their services are never the same, these little details shouldn’t be overlooked.
BTC rally, BTC’s value, asset class, BTC’s volatility, and cryptocurrency trading are useful concepts BTC investors should be familiar with. The key point here is that you should take the cryptocurrency market as a combination of an online bank, and stocks that are volatile in order to make an informed financial decision as a BTC investor. So when investing in BTC, you should be ready to either gain or lose your personal finance (quantitative easing).
Step Three: Place your order
There are numerous ways for you to actually buy BTC, one of the easiest ways is to place your order directly on an exchange. You don’t necessarily have to stick to the digital currency exchange, just like I mentioned earlier, you can buy and sell BTC from people who are willing to trade. But if you want to use an exchange, you’ll need your bank account or a credit card. At any time, you can decide to sell BTC back for USD or other cryptocurrencies.
In most countries where BTC is banned that usually means that financial institutions are not allowed to perform any transaction involving BTC, which doesn’t include private citizens. Buying bitcoins is more than a hobby. There are also BTC ATMs, which are more like a standalone electronic BTC exchange, and can be found mostly in big cities and malls; you’ll certainly find one if you are in New York. Before using this ATM, you’ll need a wallet.
BTC ATMs are usually issued too, so if you are in a big city like New York, you might want to give the BTC ATM a try. Besides, it is no different from your regular money.
Hardware BTC Wallets
The hardware wallet offers better security from theft and hacking. With it, you will easily be able to transact BTC and other cryptocurrencies. Especially if you are holding thousands of dollars worth.
Rather than save your millions worth of BTC on just any online wallet, you can make it more secure by investing in an offline wallet.
A hardware wallet will give you total control over your private key. Crypto investment comes with some challenges. It’s just like the stock market but more volatile. If you want to buy or sell crypto, an exchange is not a good place to store your investment.
Digital BTC Wallets
If you have ever owned crypto, or if you are into BTC mining, then there’s a big chance that you are already familiar with digital BTC wallets. It is just like your regular bank account, a place where you can store your token after a BTC transaction. You can either buy Bitcoins using fiat currency, then transfer it directly into your wallet or from a crypto exchange.
BTC trading requires a digital wallet because we cannot trust the exchange platform. Digital currency is prone to hacking and theft. In addition, cryptocurrency investing and the BTC marketplace is risky.
So, if you are trading with a BTC ETF, a BTC miner, or you are buying, investing, or trading BTC, you need a digital wallet.
BTC Investments FAQs
How much does it cost to buy 1 BTC?
The market price of BTC icould be paired to the price of the dollar, however, the specific price of BTC is not stable, it fluctuates a lot, that’s probably one reason why BTC is yet to become a legal tender. This lack of stability makes BTC an uncertain store of value. BTC can be worth $10k in January and $5k in March. It’s important that you follow the latest crypto news and trends to stay up-to-date with BTC prices.
What is the minimum amount to invest in BTC?
There’s no minimum amount as long as you can find someone willing to sell. It all comes down to the exchange or the broker. If they allow you to trade the lowest price, there’s nothing stopping you. However, before you invest, apply the rule of don’t invest more than you can lose. It is cliche but still remains relevant.
We are silently wishing and hoping that BTC can miraculously hit another mega surge like it did in 2017. But if we are realistic, that’s only wishful thinking as a lot of regulatory measures have been put in place to prevent such surges again. However, every once in a while, there’s a tendency for BTC to do 20 to 30% jumps in valuation.
What’s the best way to invest in BTC?
The first thing to do here is to ask yourself, what are my exact needs and purpose? Buying BTC is not just done randomly and you should be investing in BTC only after doing thorough planning and research.
There are different ways of investing in BTC, from holding to trading, you can also try out BTC Investment Trust (OTC: GBTC). OTC was designed to make the entire BTC trading process easier. It becomes as easy as buying and selling stocks and ETF shares.
As a cryptocurrency investor or an institutional investor, you are one step away from becoming a BTC millionaire if you make the right investment decision. Virtual currency just like the stock market strives for quality financial decisions.
How to avoid scam BTC investments?
It’s simple, once promises are made which seem too good to be true, there’s a big chance it’s going to turn out to be a scam. Imagine a project promising something for nothing, that’s quite impossible. Even with automated and algorithmic trading systems, they are not reliable too, so there is a need to watch out.
Since the introduction of cryptocurrency investment, there have been lots of scam projects trying to rob people of their digital assets, examples are Onecoin. This was the biggest cryptocurrency investment scam to date.
Key takeaways on how to invest in BTC
- If you invest in BTC out of ignorance you are bound to fail, this makes it essential for you to understand the entire process before putting a penny.
- Research is important, it will help you avoid scams and help you understand everything about blockchain technology, crypto, and BTC. Your BTC fund is not safe until you know how an investment is done.
- Knowing the right time to buy BTC is equally as important as other investment strategies.
- Making BTC Investment a passive source of income is good, but if it starts yielding more than your active income, there’s no harm in investing full time into BTC.
- Financial experts advise investors to invest over 50% of their capital for various investments, on the other hand, buy BTC at a price that you can afford to lose, and think of it as a credit card, a source where you can always fall back on.
