How Can a Beginner Invest in Bitcoin?

Thursday April 28, 2022
Originally published on April 28, 2022

How Can a Beginner Invest in Bitcoin?
  (Source:Getty Images)

Are you a beginner and want to invest in Bitcoin but don't know how? If so, here's how to invest in Bitcoin as a beginner.

People and organizations use Bitcoin as an exchange medium via a peer-to-peer system. Essentially, Bitcoin does not involve a central entity or government. The absence of a regulatory authority partly makes Bitcoin highly volatile. But despite Bitcoin's well-known volatility, it has become increasingly popular among today's investors and traders that want to profit from it. The following tips should guide you if you're new to Bitcoin investing.

Invest an Amount You Can Afford

Bitcoin is a speculative asset. Therefore, it's good to avoid putting a lot of money into your Bitcoin investment. If you are not ready to lose the entire amount, don't invest it in this risky asset. Keep the funds that you will need in the next few years in safe accounts to ensure that you can access them when you need them. If you have debts to settle, pay them first to avoid fines and higher interests.

Get a Bitcoin Wallet

Getting a crypto wallet is the first step toward investing in this digital asset. A Bitcoin wallet holds the digital coins you buy via a crypto exchange. Also, you use the wallet to receive Bitcoin payments from other users. Essentially, a Bitcoin wallet is the storage for your virtual coins.

You can select a hot wallet or a cold wallet. A hot wallet is also known as a software wallet, and it's similar to a mobile application. On the other hand, the cold wallet, also known as the hardware wallet, is identical to a physical wallet. However, it's safer and more secure as it is offline.

Register with a Bitcoin Exchange

A Bitcoin or crypto exchange is a place to trade digital currencies and exchange them for traditional currencies. Most Bitcoin investors use cryptocurrency exchanges that facilitate Bitcoin trades. These platforms act as intermediaries for Bitcoin buyers and sellers. Also, they enable users to convert Bitcoins to fiat money.

For instance, Bitcoin Motion Software provides a safe and secure place to buy or sell Bitcoins. While there are many crypto exchanges, not all of them facilitate safe trading. Therefore, research the available platforms to choose one that suits your trading style and needs.

Link a Payment Method to Your Crypto Exchange Account

Once you've chosen a crypto exchange, please create an account with it. The platform might require you to complete an identity verification process. After that, link a payment method to your crypto exchange account to load it with the money for your first Bitcoin purchase. Different crypto exchanges accept varying payment methods. Therefore, choose a platform that allows the conventional payment method you want to use. After verifying your identity and linking a payment method, proceed to buy Bitcoins.

Order Your Bitcoin

Some crypto exchanges have a minimum deposit amount for first-time buyers. Therefore, check the minimum amount you can spend on your first Bitcoin purchase. Place a purchase order to buy your first Bitcoin with this knowledge. Follow the instructions to complete the transactions. Your Bitcoin will reflect on your account balance once the transaction goes through.

Protect Your Investment

Experts recommend moving Bitcoins from a crypto exchange account to a separate wallet for safety purposes. Therefore, transfer your coins to a separate crypto wallet and follow these tips to determine when to sell your Bitcoins for profits.

  • Monitor the crypto market to stay up-to-date with market prices

  • Join Bitcoin communities to know what others think about the cryptocurrency

  • Monitor government and regulators' moves to know what they decide to do about the crypto industry and comply with the regulations

  • Continue learning about the crypto market to make wise decisions along the way

    The Bottom Line

    Crypto exchanges and websites with information about cryptocurrencies make investing in this digital currency easier. Follow these to start your Bitcoin investment journey.