Bitcoin happens to be a popular cryptocurrency providing tech buffs with an alternate form of cash. Apart from functioning as a payment mode, many individuals purchase this particular cryptocurrency as an investment. It will be imperative for you to buy Bitcoin in several ways in case you like to become a successful Bitcoin investor and pay the tax in cryptocurrency gains. Here, we have mentioned 6 important steps for investing in Bitcoin.
1. Join a Bitcoin Exchange
You will not come across any official company for Bitcoin at present since it is considered to be an open-source technology based on blockchain. However, Bitcoin transaction is facilitated by several different exchanges out there. The majority of the Bitcoin investors make use of cryptocurrency exchanges.
In case you want to purchase bitcoin from any exchange, it will be imperative to decide which particular exchange to purchase from. Some well-known options are Binance, Coinbase, Gemini, Kraken, and Bitfinex. Exchanges can charge a transaction fee and you need to check their fees and security features before you invest.
2. Become familiar with how Bitcoins are valued
Invest some time for studying the manner in which various markets function, how macroeconomic factors tend to impact them, plus how to assess a possible purchase. Try to comprehend the actual meaning of indicators, the functioning of margin requirements, and whether an investment is a proper fit or not.
3. Fund the account with Fiat currency
After opening your account, you need to add funds. The most affordable and quickest way to do this will be with the help of online transfer of funds from any bank account. It might likewise be feasible to make use of PayPal and other payment apps to transfer the funds from your account to crypto wallet. While certain cryptocurrency exchanges need you to wait for clearing the funds prior to purchasing, the others provide you with immediate access. In case you purchase Bitcoin immediately, you might be required to wait until the deposit is cleared. It can take few hours to several days, and you need to check the transaction time before you choose an exchange.
4. Get hold of a Bitcoin wallet
Once a coin is purchased, it is going to be stored in a “wallet”. You will come across a couple of wallet types, namely, a “cold wallet” and a “hot wallet”.
A cold wallet is considered to be the most risk-free method for storing your coins. It is essentially a piece of hardware, typically, a portable gadget which is almost identical to a flash drive. The cost of these types of wallets varies between $60 and $100.
On the other hand, a hot wallet is operated by a provider or your Bitcoin exchange. On some occasions, you will be provided with a hit wallet once your account is activated. This type of wallet is convenient since it will be feasible to access the coins via the web or a software application.
5. Your wallet has to be linked with a Bank account
After getting hold of the wallet, it has to be connected to your Bank account. In this way, you will be able to buy and sell coins. Otherwise, your Bitcoin exchange account can be linked to your bank account. Nowadays, you can also buy bitcoin with credit cards and there are some exchanges available that accept credit cards as payment mode. But if the exchange is located out of your city or country then you need to pay an additional fee for international transactions.
6. Place the Bitcoin order
It is time for you to buy Bitcoin right now. But you might be thinking of the amount of Bitcoin that ought to be bought by you. Even though the price of some coins might be quite high, exchanges often permit you to purchase just a small fraction of a coin. In fact, just $25 might be your initial investment. You can also buy bitcoin with a minimum $1 from PayPal.
Bitcoin happens to be a comparatively new and risky asset. While the value of Bitcoin might increase right now, it can drop to even zero all of a sudden. Consequently, it will be sensible to invest only what you will be able to lose, and not the entire amount.
