The choice of cryptocurrencies is bewildering, and investing in them can be hazardous unless you know their pros and cons and expected price movements. However, since Bitcoin has a more established track record, investors making their first forays in cryptocurrencies can consider investing in it, even though it is not free from price volatility, as we have all witnessed in the past year. Some basic steps involved in investing in Bitcoin:
Decide on an Exchange
As of now, you cannot purchase Bitcoin through your bank or investment firm, which is why you need to use a cryptocurrency trading platform to exchange your cash for cryptocurrency. Since there are hundreds of cryptocurrency exchanges, you need to choose a dependable and safe one. Since investments in cryptocurrency are not backed by insured banks if the platform is hacked or your account compromised, you could lose your investment. If you don’t want to store cryptocurrency in your wallet but prefer to keep it with the exchange, you should make sure it uses offline storage and is insured against hacking incidents.
The fee charged by the exchange is an important factor for choosing an exchange. The established ones may charge higher fees because they provide better security and better services, as reported by ambcryptoEspanol. You must also find out the basis of charging the fees. The fees can vary widely from one exchange to another. You must make sure that the exchange you are considering allows trading in the cryptocurrency you are investing in because not all exchanges offer all cryptocurrencies.
Fund Your Investment Account
Usually, you will have to provide the exchange you have decided on with details like your identity, source of income, and Social Security number. Most cryptocurrency exchanges will allow you to link your credit or debit cards or bank account. So that you can transfer money into your trading account. The exchange may charge transaction fees depending on the method you use to fund your account. After you fund your account, you can place orders for buying Bitcoin.
Place Order for Bitcoin
The ordering method for Bitcoin can vary from one exchange to another, but generally. You will be able to go online and enter the dollar amount of your order to buy at the prevailing rate. Of course, you will need to pay the applicable fees. If you use the exchange to trade actively, you can buy at the market price or place a limited order. That the exchange will trigger when the cryptocurrency reaches the specified price. Since the price of Bitcoin is high and maybe anywhere between $30,000 and $60,000, typical orders will fetch you a fraction of Bitcoin. According to Time, experts recommend keeping cryptocurrency investments to less than five percent of your portfolio.
Conclusion
Once you have successfully bought Bitcoin. You can choose whether to leave your investment in your account. At the exchange or transfer it to a cryptocurrency wallet for better security. All the leading cryptocurrency exchanges offer wallets for transferring your investment to a wallet. You can also use third-party software or choose to keep them in cold storage in a hardware device kept offline.
