For avid investors and young entrepreneurs across the globe, buying all kinds of cryptocurrency, specifically Bitcoins, has become a chore. Most of them begin by acquiring a few units and then move onto dedicated trading with the hope of making incredible returns.
However, knowing how to invest in Bitcoin, where to trade, and ways to store it safely are some crucial aspects of crypto trading that amateur investors should be aware of.
Here is a quick guide on how to go about trading Bitcoins and other cryptocurrencies safely and without any loopholes.
Decide where you wish to buy the currency from
With an incredibly high crypto trading volume each day, the number of ways to buy and trade in Bitcoin has expanded massively. Your priority should be to figure out the most suitable place for you to get your share of Bitcoins. While traditional stockbrokers and peer-to-peer Bitcoin owners are popular options, the most reliable way is to sign-up with an exchange platform.
Once you identify an exchange, you wish to trade with, the process is relatively simple. You need to register an account with the platform first with your name, identification number, email, and other details. The exchange will then verify your identity and ensure you are the only one who can use your account. Finally, you can purchase Bitcoins of any amount you wish and begin trading in them.
Weigh your storage options
Cryptocurrencies are stored primarily in two types of digital wallets:
- A hot wallet
- A cold storage wallet
Typically, exchange platforms provide users with a hot wallet after sign-up. When you choose a hot wallet, your crypto will be held by an exchange or another trusted provider in the cloud. You can access the currency via an application or even your internet browser.
On the other hand, cold wallets are small, portable, and security-encrypted devices in which you can download and store your purchased Bitcoins. While you may need some amount of finances to buy these wallets, they are generally considered safer than hot wallets, which are prone to hacking attacks.
Make the purchase
Making the actual purchase is a critical step in learning how to invest in Bitcoin correctly. Once you have successfully linked your wallet to the exchange of your choice, you must decide how much Bitcoin you wish to purchase. Note that a single Bitcoin could cost thousands of dollars, depending on the current market conditions.
Several exchange platforms allow users to opt for recurring purchases, limit orders, market orders, and similar buying options. You can pick whichever purchase option suits your needs the best and buy the crypto using any acceptable payment method.
Effectively manage your investment
Once you have the number of Bitcoins you wished for, you can begin trading with them. Some people invest in Bitcoin and sell it when its market value becomes higher than the price they bought. Meanwhile, others view Bitcoins and other cryptocurrencies as valuable investments and hold on to them for a long time.
Another option is to use your coins to make specific online transactions or use them for day trading. But ultimately, what you do with your share of crypto is entirely up to you.