Investing in Bitcoin as a beginner can be quite overwhelming, especially if you’re confused about where to begin. However, breaking the process down into steps will help you feel more confident and ready to begin your Bitcoin investment journey in no time.
By reading our guide, you can begin your investment journey with ease. We’ll also go over how you can invest with reduced risk, and what wallets you should consider to store your Bitcoins.
What You Need Before Beginning Your Bitcoin Investment Journey
Here’s a checklist of the things every Bitcoin investor must have before they start investing in the market-leading digital currency. Firstly, you have to sign up with a crypto exchange platform. There are thousands of crypto exchange platforms online, so this is going to demand extensive research. Just in case the platform you use has a KYC process, you’ll also need a few documents that prove your identity.
Then, ensure that you have a secure internet connection so you can remain in touch with your investments at most times. Also, keep in mind that you’ll need a crypto wallet or Bitcoin wallet where you can store your Bitcoins. You can find several Bitcoin wallet providers online.
Last but not least, you should have a valid payment method. This could be your bank account, debit card, or credit card – whichever form of payment you prefer.
- An account with a crypto exchange platform
- Documents for any KYC process
- A stable internet connection
- An online crypto wallet
- A valid and reliable payment method
Choosing the Right Crypto Exchange Platform
The first and most important step of beginning your investment journey is finding the right platform. You want to make sure that the platform is well-reputed, user-friendly, has the right set of tools, and offers available customer support. Read online reviews for the top crypto exchange platforms in the market, and give them all a try.
Most top-notch crypto exchange sites offer a demo account feature. This is especially beneficial in helping you understand how the platform works, whether it suits your needs or not, and what risks are involved with Bitcoin investments. Give the demo account feature on the platforms a trial run, then sign up with the one that you find the easiest and convenient to use.
Do keep in mind that the majority of reputable crypto exchange platforms have a thorough KYC process – so you’ll have to provide a few personal details along with documents before you can sign up.
Key points: What to look for in a top-notch crypto exchange platform
- Customer support
- Effective tools
- Good online reviews
- Demo account feature
How to Invest With Reduced Risk
If you know anything about Bitcoin, you’re probably aware that it’s a highly volatile instrument to trade. While many experienced investors benefit from the digital currency’s highly volatile nature, some also end up feeling overwhelmed due to loss in investments. Here are a few things that you can do to reduce the risk of loss when beginning your Bitcoin investment journey:
Master the basics
While it may not be possible to become an expert trader right away, you should know the basics of investing in Bitcoin before you begin investing. For instance, you must be aware of the factors that affect the value of the cryptocurrency, how and where you can remain up-to-date with crypto news so you can follow up and manage your investments accordingly. In short: research, research, and research.
Practice on a demo account feature
It’s common for beginners to get overly excited when they begin investing in the cryptocurrency market, though this may lead to significant capital loss. You need to be fully aware of the risk that tags along with Bitcoin investments, and the best thing to do is practice on a demo account feature. Make yourself familiar with the platform, try a few trading strategies, and keep practising until you’re confident enough to actually invest.
Start with smaller investments
As much as you might want to, don’t invest all of your savings at once. Start with smaller amounts, and take your time learning what works well for you and what doesn’t. As you practice and apply strategies, you’ll gain more insight into how things work. Then once you see your smaller investments going well, you can take the leap of faith and invest much larger amounts.
Choose the Right Crypto Wallet for Your Investments
It’s absolutely essential that you store your Bitcoin securely. There are a number of options when it comes to crypto wallets, such as hot wallets and cold wallets – your job is to pick and choose which wallet works best for you.
Hot wallets, also known as online wallets, are accessible through the internet only. You cannot access the wallets on a device that doesn’t have the internet. Once you open a hot wallet, you’ll receive private keys, which you can then use to access the wallet. Most online wallets are highly secure and have a thorough authentication method before you can enter them. However, there have been instances when hackers broke into these wallets, or the private keys were forgotten/lost.
A cold wallet, also referred to as an offline wallet, isn’t accessible through the internet. This makes these wallets a lot more secure and suitable for those who want to hold Bitcoins. Though you also get a private key to access your cold wallet, you don’t necessarily have to use this key to view your portfolio. You only need to use the key to make transactions.
Which wallet should you choose?
For people who make Bitcoin transactions more often and in smaller quantities, a hot wallet is fine. Mainly because it’s more accessible and easier to transact with from anywhere; on the other hand, a cold wallet is more suitable for someone who has a large amount of Bitcoin and wants to keep it secure rather than use it for transactions on a regular basis.
If you’re interested in beginning your Bitcoin investment journey, make sure that you invest carefully and take one step at a time. The first thing you’ll need to do is find a reliable crypto exchange platform and sign up for an account. Then you can practice on a demo trading account until you’re ready to invest actual capital. After that, you’ll need to create a crypto wallet for your Bitcoins. Though the entire process can seem overwhelming, if you do things right, it can be quite rewarding.
Investing in Bitcoin – FAQs
✅ Is investing in Bitcoin suitable for beginners?
Cryptocurrencies, in general, are highly volatile in nature, mainly because there are several factors that can affect the value of crypto. For instance, Bitcoin’s value can largely be affected by something as little as a tweet by Elon Musk. However, many investors make the most out of this volatility and follow ongoing trends and news regularly so they can make the right trades at the right time.
❓ Should you still invest in Bitcoin now?
Bitcoin was first introduced in 2009 by an anonymous individual referred to as Satoshi Nakamoto. The guy behind the cryptocurrency is a genius, as he built it relying on software we now call blockchain technology. It has now been over ten years since Bitcoin first entered the market, and it still remains the largest cryptocurrency to ever exist. You can read more about investing in Bitcoin through our website.
💣 Will Ethereum become larger than Bitcoin?
Ethereum is another cryptocurrency that emerged a few years after Bitcoin. It was adapted quite fast, and people use it as a form of payment in many instances. While Bitcoin is treated more as a commodity, Ethereum is treated more as a valid form of payment. Mainly because the value of a single Bitcoin is extremely high at the moment, whereas storing and transacting Ethereum is easier as its value is relatively low until now.