Investing in cryptocurrency like Bitcoin has become extremely popular among investors over the past few years. The crypto market, in general, has been steadily growing. It is projected to hit $1 trillion by the end of 2018. This has made it incredibly easy to begin investing in Bitcoin and other cryptocurrencies like Ethereum or Litecoin if you haven’t already.
If you’re looking for an alternative way to grow your investment portfolio, or if you’re just getting started with investing, here are five simple steps to get you started on the road to becoming a cryptocurrency investor.
1) Step One: Understand What Bitcoin Is
Created in 2009, Bitcoin is a type of digital currency. Bitcoin, as well as other forms of cryptocurrency, is not controlled by any centralized institution like a bank or government. Instead, all transactions are recorded in a public ledger called the blockchain.
The blockchain contains every Bitcoin transaction ever made and is constantly updated with new purchases, so it’s nearly impossible to fake your way into owning bitcoins. This public and open-source nature of the system makes Bitcoin very difficult to counterfeit.
It has also been described as a relatively stable store of value because its price is determined by supply and demand rather than based on the fluctuating policies of central banks.
2) Step Two: Set Up A Bitcoin Wallet
Your bitcoin wallet is where you store your bitcoin, and this is where you will send the bitcoin you are going to buy. Think of it like your home address or email account; it’s how people will be able to find and communicate with you on the network.
There are a lot of different types of wallets, but we’ll cover two of the most popular ones below. A hardware wallet is good for someone who doesn’t want any third-party access, while an online service might be better for those who don’t have much experience with computers or just want something quick and easy that can only be accessed from one device at a time.
One thing to keep in mind about both of these options is that if someone steals your password, they will also have access to all of your bitcoins, so make sure you choose a strong password. The benefit of a hardware wallet is that once you set it up, everything remains encrypted and private until you connect it to your computer.
Once connected, anything that happens on the device remains private until disconnected. With an online service, anything happening on the device may be viewable by others who may have access to your computer remotely (if there’s malware installed). While neither option offers perfect security, each has its advantages, depending on the situation.
3) Step Three: Join A Bitcoin Exchange
The most important step in investing in bitcoin is joining a bitcoin exchange. There are many exchanges out there, and it can be difficult to choose the right one for you. However, here are some of the top exchanges you should consider when deciding on where to buy or sell bitcoin.
Coinbase is a US-based cryptocurrency exchange that allows individuals and businesses to trade bitcoins with USD, Euros, and other cryptocurrencies. If you’re looking for an easy way to buy and sell bitcoins, then Coinbase may be your best bet.
Kraken is another popular U.S.-based exchange that deals in fiat currencies and cryptocurrencies like Ethereum (ETH), Dash (DASH), Monero (XMR), Ripple (XRP), and more. It’s based in San Francisco and was founded in 2011 by Jesse Powell.
One advantage of using Kraken is its high liquidity, meaning you’ll always find what you want to buy or sell, as well as execute large trades without having to go through a middleman.
Bitfinex is also one of the largest exchanges for digital assets, including Bitcoin, Litecoin (LTC), Ethereum (ETH) & more. Founded in 2012 by Raphael Nicolle and Michel Etienne Takhounts, Bitfinex offers advanced trading tools such as margin trading and offers traders several options for funding their accounts at no cost to them, including Euro transfers from SEPA bank accounts, among others.
Binance is another notable one. It provides services related to trading, listing, fundraising, de-listing, and withdrawal of cryptocurrencies, the same as other cryptocurrency exchanges.
It is a platform that cryptocurrency enthusiasts may use to raise money through ICOs to launch their coins (ICOs). A significant number of traders and participants use Binance to trade and invest in different cryptocurrencies.
4) Step Four: Start Buying Bitcoin
The next step is buying Bitcoin, the most popular cryptocurrency. There are a few ways to buy it, but we’re going with using an exchange.
One of the most popular exchanges for buying Bitcoin is already mentioned above. It’s relatively easy to use and has an excellent interface that makes it simple and straightforward to buy your first Bitcoin.
You can also link your bank account or credit card so you can purchase more than just $100 worth of Bitcoin at a time. Once you’ve verified your identity and linked your payment method, you’re ready to start buying some cryptocurrency! You’ll be able to choose how much money you want to spend on Bitcoin and then hit Buy.
After you enter your transaction details, it will take 4-6 business days for the funds to transfer from your bank into the exchange. When they do, they will automatically be available in your wallet on the platform!
5) Step Five: Keep Tracking The Market
Keep up-to-date on market developments at all times. If you don’t know where to search, it might be challenging, so start by looking at sites for news and updates on how your assets are doing.
Additionally, you may think about subscribing to notifications from BitcoinCharts, which offers real-time data on all significant exchanges, so you’ll constantly be aware of fresh opportunities.
The second piece of advice is to monitor prices consistently, even if it’s only a cursory look at Bitcoin in the evening while watching TV. Instead of waiting till morning when everything will already have changed, you will get a sense of how prices appear when they climb and decrease in this manner.
Furthermore, spend some time learning about crypto trading before investing money that might be used to buy more traditional assets like equities. For instance, if you’re interested in learning more about fundamental analysis or swing trading techniques, visit the YouTube channels Josh Olszewicz and OnChainFx.
Additionally, use caution when using the internet and constantly double-check the website’s URL if something seems off. Online con artists may copy entire websites and use URL addresses that are very similar to the real ones. Confirm that the website URL is legitimate if you use an online wallet or another similar service where you must enter the private key.
Email scams using bitcoin should also be avoided. These are becoming more and more common, and they frequently need you to submit your information or visit a certain website.