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An effective plan for buying Bitcoin

The following steps can help you to start investing in bitcoin.

physical bitcoin on table
Image: Unsplash

As a digital currency, Bitcoin is new to many people. However, some people accept it as value storage and exchange medium. Since 2009, bitcoin has steadily risen to become the most valuable asset class, traded alongside commodities like gold. It offers faster and low-cost cross-border money transfers, with enhanced transparency and security. 

As a decentralized currency, bitcoin is easily accessible to anyone via smartphones, tablets, computers, and the internet. The following steps can help you to start investing in bitcoin. 

Choose a Reputable Crypto Exchange or Broker 

You can buy bitcoin through a crypto exchange platform or broker. However, there are some differences between the two entities that you should know beforehand. A cryptocurrency exchange is a marketplace where sellers and buyers meet to trade digital currencies. Exchange platforms are relatively low-cost but use complex interfaces with multiple trading patterns and levels that could easily intimidate beginners. 

However, there are also renowned crypto platforms with enhanced automated binary trading systems such as bitcoin pro, which offer user-friendly options for buying bitcoin. They also provide accurate market statistics analysis to enable you to determine the best times to buy bitcoin. 

Crypto brokers are like intermediaries, offering simpler interfaces with automation capabilities to handle the exchanges on your behalf. That is why most of them usually charge higher fees than crypto exchanges. Others even claim they are free to lure customers. They might seem convenient but, brokers could sometimes restrict you from transferring your bitcoin holdings to other platforms. 

Create and Verify your Account

The exchange platform will direct you on how to create an account in a few steps. Most crypto exchanges require identity verification, which is essential to regulatory compliance and fraud prevention. 

You can buy bitcoin after the verification of your account. The verification process usually requires you to submit a copy of your passport or driver’s license. Sometimes, you may even have to send a selfie for comparison with the submitted documents.  

Make a Cash Deposit 

Check to ensure that you have enough cash in your account to buy the required amount of bitcoin. You can link your bitcoin account with your bank account and authorize a wire transfer for the deposit. Alternatively, you can deposit funds via credit or debit card. It might take a few days before you can use the money deposited into the account to buy bitcoin, depending on your exchange platform, broker, and method of funding. 

While most crypto exchanges and brokers accept payment by credit cards, you should beware that it could be precarious and costly. That’s because they usually process bitcoin purchases via credit cards as cash advances, which come with high interest than ordinary purchases. Besides, they also require additional fees for processing cash advances, adding up to about 10% of the deposit. 

Order Bitcoin 

With funds in your account, you can proceed to buy bitcoin. Make sure that you indicate the number of bitcoins that you would like to purchase. Most crypto exchanges and brokers will allow you to purchase fractional shares of bitcoin if you do not have enough money to acquire the desired amount. However, bitcoin has higher divisibility. That means you can always buy as little as you can with what you have.

Choose a Storage Method 

A bitcoin wallet is the safest place to store your bitcoin holdings. However, you can also transfer your bitcoins to another online platform (hot wallets) or offline (cold wallets) at a small fee, depending on your exchange platform or broker.   

If you do not want to buy bitcoin directly, as discussed above, you can also pursue other options such as investing in companies with bitcoin holdings and Exchange Traded Funds (ETFs). 

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