How to Invest in Bitcoin: A Beginner’s Guide
In this post, I’m going to show you how to invest in bitcoin and cryptocurrency to make money.
So, if you’re looking for how to invest in bitcoin and make money then you’ll love this post.
Let’s get started and dive in…
Over the previous years, Bitcoin has become increasingly popular amongst today’s investors and mainstream media. During that same time, there’s been a lot of debate about Bitcoin and other cryptocurrencies—Its proponents argue that it’s the future of currency and investing, while its detractors argue that it’s a risky investment option that may not generate big returns.
To better understand its true value and importance in the marketplace, we must look to its latest movements and trends. Most recently, Bitcoin’s valuation has increased more than 763% in just one year, easily outpacing traditional gains in the stock market. More people are buying into Bitcoin becoming a decentralized, global currency. One tailwind, in particular, is the acceptance of Bitcoin by several high-profile individuals and businesses.
Elon Musk, the brain behind both Tesla and SpaceX, recently announced his automotive empire would not only purchase $1.5 billion in Bitcoin, but it also intends to accept the cryptocurrency as payment in the future. Several popular FinTech (financial technology) companies like Square and PayPal also announced their intentions to support cryptocurrencies moving forward. Despite all of that, however, the most important development for Bitcoin maybe the recent IPO (initial public offering) of Coinbase Global, Inc. (NASDAQ: COIN), today’s leading cryptocurrency exchange platform.
There’s no doubt about it: momentum in Bitcoin is certainly increasing. Recent developments have contributed to Bitcoin’s meteoric rise in value, and proponents of the asset are convinced this is just the beginning.
So, what exactly is Bitcoin, and how can you determine whether it’s the right investment for you? Read our beginner’s guide on how to invest in Bitcoin and make money.
What is Bitcoin and how does it work?
Bitcoin BTC is a digital currency created for use in peer-to-peer online transactions. It was created and introduced in January 2009. It follows the idea set out in a whitepaper by the mysterious ad pseudonymous Satoshi Nakamoto.
Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority.
Bitcoin is a type of cryptocurrency. There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to. All bitcoin transactions are verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin is very popular and has triggered the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins. Bitcoin is commonly abbreviated as “BTC.”
When the richest person in the world gives his support to a virtual currency you know it’s big business.
Elon Musk has told users of an online social media app that he thinks the virtual currency, Bitcoin, is a “good thing.”
His comments resulted in the value of Bitcoin rising significantly.
With all this talk you’re probably wondering; How do bitcoins work?
How do Bitcoins and Cryptocurrencies Work?
Cryptocurrencies (Bitcoin, Ethereum, and Altcoins) use decentralized technology to let users make secure payments and store money without the need to use their name or go through a bank. They run on a distributed public ledger called blockchain, which is a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated maths problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.
Cryptocurrencies and applications of blockchain technology are still nascent in financial terms and more uses should be expected. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.
What exactly is Blockchain?
Blockchain is a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network.
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.
How does Blockchain work?
The bitcoin system is a collection of computers (also referred to as “nodes” or “miners”) that all run bitcoin’s code and store its blockchain. Metaphorically, a blockchain can be thought of as a collection of blocks.
Bitcoin uses the digital technology called “blockchain,” an advanced coding mechanism that disperses a single code over thousands of different computers. For example, let’s say that your coin is built from the code, “XDA146DDS.”
Blockchain segments the code into smaller pieces and stores the pieces of code across many computers. If a hacker wanted to access the code, they’d have to hack various computers to access the entire code.
Blockchain also employs a “public ledger,” which uses thousands of computers (referred to as “nodes”) to keep track of coins and their owners. If a coin’s data is changed, the nodes will cross-reference each other’s records to verify whether the change is accurate and that the coin’s owner initiated it.
Anyone, whether they run a bitcoin “node” or not, can see these transactions occurring live. In order to achieve a nefarious act, a bad actor would need to operate 51% of the computing power that makes up bitcoin. Bitcoin has around 12,000 nodes, as of January 2021, and this number is growing, making such an attack quite unlikely.
But in the event that an attack was to happen, the bitcoin miners—the people who take part in the bitcoin network with their computer—would likely fork to a new blockchain making the effort the bad actor put forth to achieve the attack a waste.
Why is Bitcoin worth so much?
Bitcoin is limited in nature, while all other fiat currencies are produced by the government periodically. This means Bitcoin has an increased scarcity and hence is of high value. This is also why the price of one Bitcoin vis-a-vis various currencies soars like a skyscraper.
Durability is a major issue for fiat currencies in their physical form. A dollar bill, though sturdy, can still be torn, burned, or otherwise rendered unusable. Digital forms of payment are not susceptible to these physical harms in the same way.
For this reason, Bitcoin is tremendously valuable. It cannot be destroyed in the same way that a dollar bill could be. That’s not to say, however, that bitcoins cannot be lost. If a user loses his or her cryptographic key, the bitcoins in the corresponding wallet may be effectively unusable on a permanent basis. However, the bitcoins themselves will not be destroyed and will continue to exist in records on the blockchain.
What is Bitcoin used for?
Once you purchase coins, you can use them in online transactions wherever they’re accepted. Remember, when you make a transaction with a coin, there’s no actual money being pulled from your bank account.
Money only leaves your bank account when you purchase the coin itself—not when you make purchases with a coin.
Like cash currency, the value of a coin may fluctuate. That’s why some investors are getting excited about Bitcoin and other types of cryptocurrency.
Investors speculate that Bitcoin’s value may rise significantly if there’s a surge in the market. I’ll explain the arguments for and against cryptocurrency investment later on.
For now, investors should pay special considerations to the rate by which Bitcoin and other relevant cryptocurrencies are being adopted. Not unlike traditional equities, Bitcoin increases in value when more people are interested, and more people are interested in buying Bitcoin today than ever before.
Whether it is a pure conviction or an inherent fear of missing out on what many predict to be the greatest transfer of wealth in American history, trading volume continues to increase exponentially. For the better part of a year, in fact, Bitcoin trading volume has steadily increased. As a result, Bitcoin is regularly testing new highs.
What Do You Need to Invest in Bitcoin?
You don’t need very much to invest in Bitcoin!
You only need the following:
- Personal identification documents
- Bank account information or other alternative payment methods
- A secure internet connection
The straightforward way you can invest in bitcoin and crypto is by purchasing a coin or a fraction of a coin via a crypto exchange such as Binance.
In most cases, you’ll need to provide personal information to set up an account, then deposit money you’ll use to purchase bitcoin or preferred crypto.
Pay attention- if you’re going to be purchasing coins through a stockbroker, you may not need to supply your personal information or financial information because your stockbroker will likely have all that on record.
How to Invest in Bitcoin in 5 Easy Steps
Are you ready to dive into cryptocurrency? Are you ready to learn How to Invest in bitcoin and make money securely? You’re in luck, as investing in Bitcoin is simpler than you might think. Here’s how to invest in Bitcoin, in 4 easy steps:
- Join a Bitcoin Investment Platform or Cryptocurrency Exchange
- Get a Bitcoin Wallet
- Fund your Bitcoin Wallet
- Register your Bitcoin Order based on Minimum Bitcoin Investment
- Cash out or Manage your Bitcoin Investment
1. Join a Bitcoin Investment Platform or Cryptocurrency Exchange
Before you start investing in bitcoins or cryptocurrency, you’ll need to determine where you want to make a Bitcoin purchase. Most Bitcoin investors use cryptocurrency exchanges. There’s no official “Bitcoin” company because it’s an open-source technology, but there are several different bitcoin investment platforms and exchanges that facilitate Bitcoin transactions. These exchanges are the middlemen of cryptocurrency investing, like a stock brokerage.
If you decide to purchase from an exchange, you’ll have to decide which exchange you want to buy from and which bitcoin investment platform you want to invest your bitcoins. Here are a few of the most popular options:
- Bitcoininvestmentrex: Bitcoininvestmentrex is by far the most popular legit bitcoin investment sites and one of the best cryptocurrency investment platform because you can invest directly with USD. Bitcoininvestmentrex the world’s most trusted bitcoin investment site that helps you to invest in bitcoin and make money securely and easily.
- Coinbase: A very popular crypto exchange that insures losses in the event of a security breach or fraudulent transfers
- Binance: Founded in 2017, Binance is a crypto exchange with a strong focus on altcoins
- Kraken: This San Francisco-based exchange allows you to invest in Bitcoin using various currencies from around the world
- Gemini: Launched in 2015 by Cameron and Tyler Winklevoss, Gemini offers services for casual and veteran Bitcoin investors with different user interfaces and fee structures for both.
- Bitfinex: The longest-running cryptocurrency exchange that’s optimized for advanced traders and lenders (unfortunately, Bitfinex doesn’t currently accept USA customers)
2. Get a Bitcoin Wallet
When you purchase a coin, it’s stored in a “wallet,” which is where all your cryptocurrency is stored. There are two types of wallets you can get: a “hot wallet” or a “cold wallet.”
A hot wallet is a wallet that’s operated by either your cryptocurrency exchange or by a provider. Some exchanges will automatically provide you with a hot wallet when you open your account. In any case, hot wallets are convenient because you’ll be able to access your coins through the internet or a software program.
Some notable hot wallets are:
Electrum: Software that enables you to store your coins on your computer
Mycelium: A mobile-only app for Android and iPhone users
However, hot wallets are not the most secure form of coin storage. If the hot wallet provider is hacked, then your coin information may be at risk.
A cold wallet is the safest storage method for your coins. A cold wallet is an actual piece of hardware that stores your coins, usually, a portable device that’s similar to a flash drive. Most cold wallets cost between $60 to $100. Some popular cold wallets are:
If you’re only going to purchase small amounts of coin, then you might be fine using a hot wallet with an insured crypto exchange. But if you’re going to be trading large amounts of coin, then a cold wallet would be well worth your investment.
3. Fund your Bitcoin Wallet
Now you’re ready to purchase Bitcoin. Your cryptocurrency exchange will have everything you need to buy. The big question is, how much Bitcoin should you purchase in your wallet?
Some coins cost thousands of dollars, but exchanges often allow you to buy fractions of a single coin—your initial purchase could be as low as $25.
4. Invest your Bitcoin Order based on Minimum Bitcoin Investment
Investing in Bitcoin is very risky, and it’s important that you carefully determine your risk tolerance and review your investment strategy before you invest any Bitcoin.
With all that said, you must be ready to invest in bitcoin and make money fast, this is where you need the expertise of a trusted bitcoin investment platform like Bitcoininvestmentrex that offers minimum bitcoin investment suitable for all investors.
Most importantly, you can grow your bitcoin and crypto account into a powerhouse portfolio in under 40 days with our highly profitable crypto investing platform.
Each crypto is guaranteed to generate a monthly return between 25%-30% consistent profit, and there is an extra advantage of compounding profit on our platform.
5. Cash out or Manage your Bitcoin Investment
After you’ve invested your bitcoins with Bitcoininvestmentrex a Trusted Bitcoin Investment Platform, you wait to receive your guaranteed profit at the end of your investment period depending on the maturity of the bitcoin investment plan you choose.
In addition, you cash out your bitcoin profits once you receive them in your bitcoin wallet at the end of your investment period or you can :
- Use your coins to make online transactions
- Hold your coins for a long period in the hopes it’ll appreciate in value
- Perform day trading with your coins—that is, buying and selling coins with other Bitcoin owners, which can be facilitated on the cryptocurrency exchange
Is Bitcoin a good Investment?
Here’s one of the most commonly asked questions about Bitcoin: is Bitcoin a good investment? according to Google Trends and answersocrates.com, the question is bitcoin is a good investment keeps trending and will do so for a long time.
Well, the real answer is no investment is inherently “good” or “bad.” It depends entirely on your risk tolerance, your investment strategy, and your financial goals. Before you consider Bitcoin as an investment, you should carefully consider your own goals and determine what you want to accomplish in your investment activities. Do you want to develop a passive income? Become a full-time investor? Save for retirement? Answering these questions will help you figure out whether Bitcoin is the right investment option for you.
Bitcoin is a very high-risk investment because it’s a volatile asset. That means that Bitcoin values may rise or fall dramatically in value over a very short period—even as quickly as a few hours or days.
Like all cryptocurrencies, Bitcoin has no intrinsic value. It’s not backed by any physical asset, like gold or silver, and there’s no central regulator to ensure that the value remains stable.
Furthermore, Bitcoin value isn’t linked to the profits of any one corporation. The value of Bitcoin is dependent on market demand. When there are more people buying Bitcoin, the value will increase. When there are fewer people buying Bitcoin, the value will decrease.
To make a significant profit on Bitcoin, you may need to rely on “timing the market,” which is a difficult and generally ill-advised investment strategy. Nonetheless, there’s a potential for profit.
Bitcoin compared to other assets
Bitcoin was the best performing asset of the decade, returning 10x more than Nasdaq 100.
Bitcoin and cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency.
Choosing which investments to jump on and which to avoid can be a very confusing decision. Your choice will decide whether you enjoy great returns for years to come, or you lose it all. It is impossible to turn on the TV or read an investment blog without hearing about Bitcoin. It is one of the hottest topics in the world right now, but it’s not the only way to invest your money, which begs the question: How does Bitcoin stack up against other wealth-building vehicles?
While Bitcoin is its own investment vehicle, it’s important to note that it can actually transcend investing borders. In fact, Bitcoin can be used concurrently with some of today’s greatest assets. Real estate, in particular, could benefit immensely from what’s known as “tokenization”. According to Tom Winter, CRO & co-founder of DevSkiller, “tokenization is the process of creating a virtual token representing ownership of an interest in real estate that exists on a blockchain (The core technology behind Bitcoin).” Winter suggests “tokenization has the potential of revolutionizing the global real estate market. It offers investors many advantages over existing investment options.”
The unique convergence of real estate and Bitcoin may award investors with attractive profits, but how do the two investment vehicles compare to each other by themselves?
- Many experts believe that Bitcoin is a bubble, meaning it is overvalued and could crash at any moment.
- Bitcoin’s value is volatile; it is equally prone to massive spikes and drops in price.
- Bitcoin is entirely digital, meaning it is more vulnerable to security breaches than a tangible asset.
- Real estate is an investment that is backed by a strong historical record and the security of a tangible asset.
- Rising home values and rents are an excellent hedge against inflation.
- Depreciation, utilities, insurance, and repairs all allow real estate investors to qualify for valuable tax benefits.
- Rental properties provide the consistent monthly cash flow you can rely on.
Here at Bitcoininvestmentrex, we implement a multi-strategy of portfolio diversification across asset classes like Bitcoin, Volatility, and Real Estate to achieve the goal of capital appreciation, the strategy captures different sources of alpha embedded in the long-term investment horizon. To reach the objective of capital preservation, it uses a robust and sophisticated risk management framework that targets a constant portfolio volatility level independent of market conditions.
The Pros of Bitcoin Investing
- The main benefit to Bitcoin investing is that you may be able to generate a huge return on profit, perhaps as high as 200% or more. Of course, that’s an extremely difficult thing to accomplish, but it’s possible.
- If you purchase a large amount of Bitcoin, you may be able to capitalize on a market surge and sell your coins for a much higher value when there are lots of buyers. There’s also a slight possibility that Bitcoin will truly become the currency of the future or a more popularly traded asset, and you could hopefully generate returns from long-term holdings. It should be noted, however, that Bitcoin values are generally decreasing every year.
- Your success may depend on properly “timing the market.” In other words, you’ll buy coins when they’re at a low price and sell them when they’re at the highest possible price. High-risk investors who pay close attention to the market may be able to generate massive returns when employing that strategy. They might even generate returns that are highly improbable in the world of corporate stocks or government bonds.
The Cons of Bitcoin Investing
- Unfortunately, the high volatility of Bitcoin makes it a hazardous investment, and you could lose money if you’re not careful.
- Bitcoin and other types of cryptocurrency are at high risk of “pump-and-dump” schemes. Predatory investors will reach out to amateur or unassuming investors and convince them to pour a lot of money into Bitcoin. The resulting surge causes Bitcoin prices to increase rapidly.
- The predatory investors are smart, and they sell all of their holdings before the buying surge ends, making a huge profit. But when investors stop buying, the value of the coins falls to extremely low prices. A coin bought for $200 could wind up having a valuation of just $30. The unknowing investors would be throwing their money away.
- You could always make a profit by selling your coins before the price collapses, but it’s impossible to predict when the buying surge is going to stop—prices could fall 50% in only a matter of hours. That’s why any volatile asset, like cryptocurrency and penny stocks, are considered high-risk investments.
- You should also know that pump-and-dump schemes and pyramid schemes are illegal. While it’s not necessarily illegal to capitalize on a market surge—whether it’s natural or artificially created—you might not want to be associated with such practices. You could be the target of an IRS audit or a criminal investigation, even if you’ve done nothing wrong.
Best Tips for Investing in Cryptocurrency:
If you do decide that you want to try Bitcoin investing, be sure to heed the following tips:
- Understand your risk tolerance: As mentioned before, Bitcoin is a high-risk investment, and you should carefully review your risk tolerance before you invest. If you don’t feel comfortable investing in volatile assets or only have a small sum of money to invest, you may want to consider other investment options.
- Diversify Your Portfolio: The best way to protect yourself from investment losses is to diversify your investment portfolio. Your primary investments should be low-risk, like government bonds or index funds. Next, you should go for medium-risk investments, like real estate or corporate stocks. High-risk investments, like penny stocks or Bitcoin, should be your smallest and least-prioritized investments. Bitcoin is essentially the “icing on the cake:” the investment that could yield substantial profit but which you could still do fine without.
Best ways to Invest in Bitcoin and Crypto
Despite the many differences between buying Bitcoin and buying other equities like stocks, there are inherent similarities that must be addressed. In fact, the actual Investment Strategies for Cryptocurrency aren’t all that different from their stock counterparts.
That said, many of the strategies for investing in Bitcoin have to do more with investment timeframes. In particular, investors may exercise one of the three most popular Bitcoin investment strategies.
If you want fast, easy, and secure ways to invest in bitcoin and make money, you’ll love these tips:
1. Buy and ‘Hodl’ Bitcoin:
Buying and holding bitcoin is one of the most straightforward and most beginner-friendly ways to invest in Bitcoin and crypto.
Those familiar with Bitcoin are probably already aware of the concept between Buy and ‘Hodl.’ Those who aren’t, however, can get caught up quickly. ‘Hodl’ (an intentional misspelling of hold) is merely an investment philosophy. Short for “hold on for dear life,” ‘hodl’ suggests the best Bitcoin investment strategy is to hold it forever.
Those who subscribe to this strategy are more than aware of the asset’s volatility but have a strong conviction for its prospects.
Therefore, this strategy will require investors to weather the many ups and downs of Bitcoin price fluctuations without selling.
You must know when is the right time to sell.
Most importantly, make sure to buy using the dollar cost average (DCA).
2. Cryptocurrency Investment Company
There are quite a few choices you have when it comes to investing in Bitcoin and crypto.
You could make money with crypto by investing in startups, bitcoin investment sites, stocks, or even blockchain-based products.
You should be careful with investments, especially when it comes to cryptocurrencies.
It is no secret that the cryptocurrency market is a very unpredictable place.
Always do your homework and research the cryptocurrency and the platform that you plan to invest in, or else the question of “how to make money with bitcoin?” might turn into “how to get out of debt (no Bitcoin)?”.
Bitcoininvestmetnrex.com is the world’s most trusted cryptocurrency investment company that helps you invest in bitcoin and crypto safely and securely without any hassle or stress
3. Accept Payment in Crypto
Think of a skill you’re good at.
This can frankly be anything – starting from copywriting and digital marketing to painting or singing.
Pick your strongest quality (or qualities) and think of ways you could monetize them to earn crypto.
Find a way to charge people.
A good place to start is to offer your services on online forums and marketplaces, stating that you only take payments in the form of bitcoins or other cryptocurrencies.
Do this long enough, and you might eventually want to create a designated website for this same purpose and teach others how to make money with Bitcoin and Crypto.
4. Lending Bitcoin and Crypto
Cryptocurrency lending platforms offer investors the opportunity to make bitcoin loans to others and earn interest for their trouble.
With some sites offering interest rates of between 8% and 15% while requiring minimal effort from lenders, this can seem very appealing.
If cryptocurrency lending still appeals, research diligently and proceed with extreme caution.
The decentralized nature of bitcoin and other cryptocurrencies makes it simpler to make transactions.
This is because you won’t need any authorities to validate it.
Because of this decentralization, you can also loan BTC to potential loanees at an interest rate.
Think of it as a way to make your money flow even when you’re HODLing—you’re actually making use of the wealth rather than keeping it unmoved in your wallet.
Bitcoin is a popular type of cryptocurrency that utilizes a large chain of interconnected computers to store and protect your digital assets. Bitcoin is a highly volatile asset that’s prone to large and fast swings in value, which presents an opportunity for large returns but also poses a tremendous risk. It is critical that you learn how to invest in Bitcoin responsibly before making any decisions. Be sure to diversify your investment portfolio to protect yourself from marketplace volatility.
I really hope you enjoyed this post on how to invest in bitcoin and make money.
The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only.