Bitcoin since its introduction has grown to be one of the highly popular virtual currencies. However, there has been a lot of controversies on whether it is the future of currency. Many aspiring investors also want to know how risky it is to invest in, and its profitability.
The inception of bitcoin was for the intent of becoming a worldwide acceptable currency thereby replacing government-issued currency.
To determine the right way to invest in the international market (bitcoin), we have to understand what bitcoin is exactly.
WHAT IS BITCOIN?
Bitcoin is a disseminated virtual currency that can be sent from one person to another electronically to anywhere in the world. It does not involve government, bank, or any cooperation.
Since its introduction in 2009, it escalated from $1 to $20,000 at the end of 2017.
Though bitcoin suffered a setback after 2017, it has gained more grip since 2021 which is about $36,000. With this kind of increase, a lot of investors have gained more interest in bitcoin.
Bitcoin makes use of “blockchain”. This iIt is a coding system that distributes a single code over thousands of various computers. This enables a well-secured transaction as cybercriminals won’t be able to hack into the code.
WHAT YOU NEED TO INVEST IN BITCOIN
All you need is your Identification documents
A secured internet connection
Bank account information.
Personal or financial information might not be needed if you are going through a stockbroker.
HOW DO YOU INVEST IN BITCOIN?
DECIDE TO JOIN A BITCOIN EXCHANGE
The first and foremost thing to do is, to decide where you want to buy bitcoin. Whether it’s through traditional brokers or cryptocurrency exchanges, there are various ways to purchase bitcoin and other cryptocurrencies. Here is an overlook of where bitcoin can be purchased:
There are several cryptocurrency exchanges you can purchase bitcoin from. it is left for you to do your proper findings in order to get the right one for you. the most popular ones are:
Coinbase: is a popular crypto exchange, especially in the U.S. They grant access to etherium, litecoin, and some other cryptocurrencies. Moreover, if there happens to be any security breach, they insure the loss.
Coinmama: They trade in eight different cryptocurrencies. The minimum purchase is $60 and their transaction charges are 5.9% plus a 5% fee for credit card purchase.
Gemini: this U.S based crypto exchange trades bitcoin, litecoin, zcash, and bitcoincash. Their transaction charges are about 1.49% of your purchase plus a 0.5% additional fee.
Robinhood is the first and best mainstream investment broker. Robinhood doesn’t charge fees for bitcoin trades. Other brokers are Tradestation and eToro.
Other ways to purchase bitcoin or invest in bitcoin are, Bitcoin ATMs, buying from bitcoin owners, bitcoin futures, and grayscale funds.
Bitcoin, when purchased, can be stored in a virtual wallet and those wallets are of two types, which are cold or hot wallets:
It is operated or stored by your exchanger or a provider and with the faster transaction. The hot wallet makes it easy to access your coin through the internet or a software program.
Examples of hot wallet are:
Mycelium, a mobile version of bitcoin wallet and is available for android and iPhone users.
Electrum, a software that allows you to store your bitcoin on computers.
Other examples are blockchain and coin base.
This type of wallet allows you to download and carry your bitcoin as it is a small and encrypted portable device. It is also a more secure method for storing your coins and cost between $60-$100.
Examples of cold wallet are:
Ledger nano: it looks like a thumping drive and ranges from $60 to $120
Trezor: is a key size cold wallet and it ranges from $80 to $170
LINK YOUR WALLET TO YOUR BANK ACCOUNT
When your bank account is linked to your wallet, it enables you to buy and sell a coin. You can also link your bank account to your cryptocurrency exchange account.
MAKE YOUR ORDER
In this step, you have to know how much bitcoin you should purchase. Buying and selling of fractional shares are allowed. You can always invest as low as $25 as your first initial investment.
MANAGE YOUR BITCOIN INVESTMENT
To invest in foreign stocks(bitcoin) requires good management. After successfully purchasing bitcoin, you can make online transactions with your coin.
You can also wait for its value appreciation by holding it for a long period. Trade with your coin through your cryptocurrency exchange platform by buying and selling bitcoin.
Bitcoin is a well-known cryptocurrency. It sometimes brings large returns and at the same time, it can be risky. Also, ensure to diversify your investment for proper protection as the market can be very volatile.