Should you invest in Bitcoin?

People buy Bitcoin mostly because they believe it is an asset and can be invested or speculated on. Today, you can easily buy Bitcoin in many places with high security and convenience. Here are some basic Bitcoin and crypto purchases that anyone can easily do.

1. Where to buy Bitcoin and Cryptocurrencies?

You can buy Bitcoin through exchanges and stockbrokers or from other owners. Regardless of what you use how to buy bitcoins Either way, consider the risks before investing in digital assets.

How to buy Bitcoin
How to buy Bitcoin

Buying Bitcoin is often the first step that investors take into the world of cryptocurrency. And it can be an unfamiliar scene for those used to traditional financial products.

The value of Bitcoin – the world’s first and most popular cryptocurrency – has grown from $3,237 in December 2018 to rapidly hit a new record high above $65,000 in 2021. Bitcoin price level at the time of writing is $40491.50. Like all other cryptocurrencies, Bitcoin is much more speculative and volatile than many tried-and-true investments, such as stocks, bonds, and mutual funds.

2. Is Bitcoin Right For You?

Bitcoin can be a risky investment, so it’s important to think carefully about your goals and strategy before deciding on options. how to buy bitcoins. Although the price of Bitcoin has increased significantly over time, not everyone who bought it has received a portion of that profit. Because the cryptocurrency market in general is so volatile, it is nearly impossible to find the “right moment” to buy or sell – prices can either go high right after you sell or plummet right after you buy. .

That said, there are some basic guidelines. A general rule of thumb is to invest no more than 10% of your portfolio in individual stocks or risky assets like bitcoin. If you’re new to investing, learn more about investing money. If you decide to buy bitcoin, you will have to make some technical and logistical decisions.

3. Understanding Cryptocurrency:

Cryptocurrencies are digital assets typically created using a cryptographic computer network technology known as blockchain, which makes it possible to exchange them without the need for a central authority like a bank. Cryptocurrencies are traded on public exchanges, but they are generally not subject to the same regulations as stocks and other traditional investments.

Make sure you understand Bitcoin before making any Bitcoin purchases
Make sure you understand Bitcoin before making any Bitcoin purchases

Bitcoin is the dominant force in the crypto market, but there are thousands of other cryptocurrencies – some reputable, some not. Different cryptocurrencies are often designed for different purposes. For example, Bitcoin was developed as a payment system. Some other cryptocurrencies, such as Ethereum, are used to perform more complex transactions. Some, such as Dogecoin, were created as a joke but managed to capture investor interest nonetheless.

If you’re thinking about doing your way to buying Bitcoin or any cryptocurrency, there are several ways to think about risk and potential return. Bitcoin is a bet on both the cryptocurrency space and the specific technology behind Bitcoin. Both are relatively new and untested, and neither is guaranteed to reach the potential some proponents predict.

If you believe in the ideas behind cryptocurrencies in general, but you don’t believe that Bitcoin is a potential investment then a more diversified crypto portfolio might be considered.

4. How to buy Bitcoin:

How to buy Bitcoin consists of 4 basic steps as follows:

  • Decide where to buy Bitcoin: Cryptocurrency exchanges like Coinbase, Binance, Huobi, can help you get started investing in Bitcoin.
  • Think about how to store your cryptocurrency. Are you going to keep your Bitcoins in a hot wallet or a cold wallet?
  • Find out how much you want to invest in Bitcoin.
  • Manage your investments. Determine your long-term plan for this property.

4.1. Deciding where to buy Bitcoin

There are several ways to buy Bitcoin and different cryptocurrencies, including traditional exchanges and brokers.

The most common way to buy Bitcoin is to buy it on an exchange
The most common way to buy Bitcoin is to buy it on an exchange

Exchanges: You can buy bitcoins from several cryptocurrency exchanges. Many offer dozens of crypto options, while others simply have Bitcoin and some alternatives. They have different fees and consumer protections, so be careful before choosing.

Traditional Brokers: There is little choice at the moment between traditional brokers that offer customers a way to buy and sell Bitcoin – Robinhood was the first mainstream investment broker to offer bitcoin (Robinhood Crypto is an example). ). Like its stock trading platform, Robinhood does not charge Bitcoin trading fees.

Among the online brokers and cryptocurrency exchanges that NerdWallet reviews, the following are currently offering Bitcoin.

Other ways to buy Bitcoin:

  • Bitcoin ATMs: They work like normal ATMs, only you can use them to buy and sell bitcoins. Coin ATM Radar shows over 27,000 Bitcoin ATMs across the US. However, in Vietnam, we do not have this type of machine.
  • Peer-to-peer bitcoin holders. You can buy bitcoins directly from other Bitcoin holders, just like you would buy items on Craigslist, through peer-to-peer tools like Bisq, Bitquick, and LocalBitcoins.com. Use extreme caution if buying Bitcoins directly from individuals.

Note that you should not use a credit card to make Bitcoin purchases. Although some providers allow you to buy Bitcoin with a credit card, investing by borrowing from a high-interest product like a credit card is never a good idea. Also, use a private, secure internet connection. This is very important whenever you do financial transactions online. Bitcoins should not be purchased while at a coffee shop, in your hotel room, or using other public internet connections.

4.2. Decide how to store Bitcoin

Bitcoins can be stored in two types of digital wallets: hot wallets or cold wallets. With hot wallets, transactions are usually faster, while cold wallets often integrate additional security steps that help keep your assets safe but also make transactions take longer.

4.3. Conduct transaction:

After linking your bitcoin wallet to the Bitcoin exchange of your choice, the last step is the easiest – deciding how much Bitcoin you want to buy. Although one Bitcoin costs tens of thousands of dollars, the cryptocurrency (trading symbol BTC or XBT) can be bought and sold for fractional shares, so your initial investment can be low. up to 25 dollars.

4.4. Manage your investments

If you like the idea of ​​day trading, one option is to buy bitcoin now and then sell it if and when its value goes higher. However, it is entirely possible to maintain a cryptocurrency investment in the long term.

With how to buy bitcoins and cryptocurrency management in general, wish you have investment strategies that suit your needs.