Bitcoin has been known as a decentralized digital currency that applies peer-to-peer technology for instant payments. The Bitcoin supply is generally restricted to 21 million. Out of this 21 million, 90 % of Bitcoins have already been mined. The transaction of Bitcoin is recorded in a distributed public ledger called the Blockchain. The functionality and management of Bitcoins are not governed by any central authority, unlike government-issued currencies like Euro and Dollar. The execution of the payments through Bitcoin happens at lightning-fast speed.
As a Bitcoin trader or an investor, if you are thinking of entering into the world of cryptocurrency, the initial step is to purchase Bitcoin. Bitcoin is one of the world’s famous cryptocurrencies. With its growing popularity, the price of Bitcoin has risen from $ 3,327 in December 2018 to $ 65,000 in November 2021.
Unlike any other cryptocurrencies, trading Bitcoins is considered the safest of all. When an investor plans to invest in cryptocurrencies, one common thumb rule to be followed is not investing more than 10% of your portfolio. If you are a novice investor and planning to invest in Bitcoins, here is a guide for you to follow on purchasing Bitcoins.
Steps To Purchase Bitcoins
Buying Bitcoins is the first step involved in investing or trading Bitcoins. Mentioned below are the four steps involved in the process of purchasing Bitcoin.
- Decide Where to Buy Bitcoin
Some cryptocurrency exchanges like Coinbase and other conventional brokers are considered the best platform from where you can buy Bitcoin. Traditional brokers such as Robinhood can also help in purchasing Bitcoin.
- Decide On How To Store Your Cryptocurrency
Once you have purchased cryptocurrency like Bitcoin, it is time for you to think about storing your cryptocurrency. There are facilities of a hot wallet or cold wallet for storing Bitcoins once purchased.
- Make Your Purchase
For an investor to purchase Bitcoin, they should think about the amount they are willing to invest for purchasing Bitcoin. They should be well-alert that the amount they invest in purchasing Bitcoins is a matter of risk. Thus, it is recommended to invest only that amount you shall be able to bear if you incur a loss.
- Manage The Investment
Bitcoins that you purchase are a digital asset, and thus, proper planning should be done on what to do with the asset you possess. Long-term planning is very important when purchasing a riskier asset like Bitcoin.
The Bottom Line
The transactions made through Bitcoins are considered to be high on safety. The features that Bitcoin offers attract prospective investors to invest in Bitcoins. For the beginner, it might be a whole new concept. From the steps mentioned above, any investor can purchase Bitcoin with ease regardless of their expertise. Also, when purchasing Bitcoins, it is recommended to have a long-term plan on what to do with the Crypto assets that you hold.