Bitcoin has experienced a remarkably strong start in 2020. Analysts believe it could be a blockbuster year for Bitcoin and for the crypto market in general. In January, the Bitcoin market gained steam and has finally broken through the level of $9,000 for the first time in 2020.
On the wave of bullish crypto market sentiment, now seems like a great time to start investing in Bitcoin. Let us figure out how and where to buy Bitcoin and store it safely.
How to buy Bitcoin
There are a few clear steps you should take before purchasing Bitcoin for the first time. Once you are ready, you can learn to buy Bitcoin in no time, as simply as using any other mobile app on your phone.
Step 1. How to buy BTC: choose a trustworthy Bitcoin trading app
There is a whole bunch of crypto exchanges out there with different performance and levels of credibility. You should focus on an award-winning and regulated crypto exchange. With Currency.com you can buy, sell and hold your crypto assets safely.
An online crypto exchange is a marketplace that operates similarly to platforms that traders use to buy stocks. The BTC exchange connects you directly to the Bitcoin marketplace, where you can exchange traditional fiat currencies for Bitcoin.
Bitcoin exchanges resemble Forex markets. These are digital platforms where you can exchange BTC to USD, BTC to EUR, BTC to GBP or choose any other crypto-to-fiat currency pair.
Although the crypto exchange serves as a one-stop solution compliant with the most stringent security standards and AML rules, you should note that it is not recommended to store large amounts of Bitcoins on your account for a long time. While the in-built wallets are secure enough to ensure smooth trading, it is advisable to transfer your crypto holdings to an external wallet.
This leads us to the next step of our journey – choosing a Bitcoin wallet. Experts believe you should stick to the one with a multi-signature facility.
Step 2. How to buy Bitcoin safely: choose the right wallet.
Since Bitcoins are not literally coins they need a special place to be kept securely. You should choose a digital wallet to store your Bitcoin holdings until you are ready to spend them or exchange to another currency.
The major challenge is to choose a crypto wallet you can trust. Crypto wallets operate through private and public keys, which represent long strings of numbers and letters, created through a mathematical encryption algorithm.
- Public key works as a location where Bitcoin transactions are deposited to and withdrawn from. These keys appear on the Blockchain ledger as a user’s digital signature.
- Private key is a password necessary to buy, sell and trade the Bitcoin in a wallet. This key should be protected and used only to authorise Bitcoin transactions.
Some traders prefer to encrypt a Bitcoin wallet with a strong password, and in some cases choose a cold storage option.
What exactly do we mean by saying a ‘cold’ and ‘hot’ wallet? In-built or ‘hot’ wallets offered by some exchanges are regarded as more agile and safe for exchanging crypto to fiat. Although they guarantee the highest level of security for clients’ assets, they still incur some external risks.
That is why many traders stick to offline or ‘cold’ wallets, when it comes to storing significant amounts of crypto assets. Cold wallets, representing special hardware devices, are not vulnerable to fraudulent activity when they are offline.
Step 3. How to buy Bitcoin easily: choose a payment method you want
Bitcoin exchanges accept different payment options. Today you can use traditional payment methods, such as a bank transfer, credit and debit card transactions or even Apple Pay to fund your account and buy Bitcoins.
You simply click the ‘Buy’ or ‘Sell’ button on the exchange and select the payment method you want.
Credit and debit card payments are considered the most popular and user-friendly options, as they require less time. However, they may impose higher fees. Bank transfers, in turn, usually have lower fees, but they are more time-consuming.
Step 4. Buy Bitcoin now
Once you have set up your account on the crypto exchange, decided where to store your Bitcoins and what payment method to choose – you are ready to buy some Bitcoins or its fractions.
The crypto exchange will provide you with the real-time streaming Bitcoin price rate and show how much of a Bitcoin (or how many Bitcoins) you can buy for a particular sum of money.
Note that Bitcoin is used to skyrocketing and drastically sinking throughout its history. And even if you do not have enough funds to buy a Bitcoin, you can buy a fraction and trade it further to earn more.
To place a trade at Currency.com or another platform, you input the amount of Bitcoin you want to buy in the given field and click the ‘Buy’ button. This is a classic market buy order, which will purchase Bitcoin at the best market rate.
Once you have executed your purchase, your new Bitcoin assets will be stored in your Currency.com account. It is up to you to decide what to do with them next.
Step 5. Withdraw or hold your Bitcoins to sell them further.
Now when you have Bitcoins on your account, you start thinking what to do next. There are always several options.
- Trade Bitcoin
If you have an account on a crypto trading platform you can not only buy Bitcoin at a competitive price, but also sell or exchange it. A wide choice of crypto-to-fiat currency pairs open enormous opportunities for traders to make money from price movements. You can sell Bitcoin the same way you buy it. Simply put a sell order, specifying the amount you want to sell, and the exchange will execute your order.
- Hold Bitcoin
Having shown some positive price dynamics since the beginning of 2020, Bitcoin is considered a lucrative store of value. If you share the bullish forecasts for Bitcoin price, you may decide to hold your coins for a while and try to reap more profit.
- Spend Bitcoin
It’s easy to forget that you can always use Bitcoin to buy goods and services. The list of vendors and retailers who accept Bitcoin payments, including Starbucks, Whole Foods and Nordstrom, is steadily growing.
According to SpendBitcoins.com, over 100,000 merchants are ready to provide almost anything you would like to buy with Bitcoin.
In the end
Bitcoin has proved to be a strong cryptocurrency which deserves investor attention. Today many traditional stock investors and traders choose Bitcoin and other popular cryptocurrencies to diversify their investment portfolio. Although the crypto market and Bitcoin in particular is very volatile, it can bring you significant profit. Buy, sell and exchange your crypto holdings with a reliable crypto trading provider to make it work.