How to Invest in Bitcoin for Beginners


Bitcoin is the most valuable cryptocurrency in the Crypto world. Its ability to remain stable even when other markets are volatile makes it an excellent investment. For the past five years, Bitcoin investors have had a 2000+% value increase in their bitcoin portfolio. Here is a guide on how to invest in Bitcoin.

Step 1: Get a Bitcoin Wallet

To be a bitcoin investor, you will need to have a bitcoin wallet. A bitcoin wallet is a physical device or software that stores your private and public keys for your bitcoins and keeps track of your transactions. Your bitcoin wallet has a wallet address. This is a QR code or a series of characters that are unique to it. It is like your account number.

There are two main types of Bitcoin wallets, namely cold and hot wallets. Cold wallets are printed papers with a QR code that contains your wallet information. They keep your Bitcoins offline. Some popular cold wallets you can try out are Trezor and Ledger Nano. 

Hot wallets, on the other hand, are online applications that manage your Bitcoins. Some of the good Hot wallets that you can use are Electrum and Mycelium.

Cold wallets are more secure because you need to scan the QR on the wallet to access your bitcoins. Hot wallets are more accessible since they are always online.

Step 2: Connect Wallet with Your Bank Account

After getting a Bitcoin wallet, you will need to link it to your Bank account. Once you link your bank account to the bitcoin wallet, the user can easily buy or sell the bitcoins. However, the first time you buy bitcoins using that bank account, it will take four days to reflect. After this, the transaction will be instantaneous.

Using the cash in your account, you can buy Bitcoins, but you cannot sell bitcoins and deposit money into the bank account.

Step 3: Link a Bitcoin Exchange

Bitcoin Exchange is a platform where you can trade bitcoins. They are like Forex brokerage firms.

The most known Bitcoin Exchange Firms are:

Factors to look for in a good Bitcoin Exchange Firm are:

  • The processing fees.
  • Trading security of the firm.
  • The exchange rates of the firm.
  • The number of cryptocurrencies in their trading platform.

Step 4: Place Your Bitcoin Order

If you have found a good Bitcoin Exchange, you are ready to invest in bitcoins. All you have to do is place an order of how much bitcoin you want. At the time of writing, one bitcoin coin costs about $ 49 937. However, the Exchange Firms allow you to purchase fractions of a Bitcoin. You could buy a fraction of as low as $ 50.

Investing and Trading bitcoin can be very risky. It’s essential that you stick to your risk tolerance and your investment strategy before purchasing any Bitcoin. 

Short-Term Vs. Long -Term Bitcoin Investments

Investing can be long-term or short-term. Short-term investments are bitcoin investments and trades that you will hold from a minute to 6 months. Buying at low prices to wait for the prices to appreciate or selling at high prices to wait for prices to depreciate can be a good short term trading strategy.

Long-term Investments are all trades held for more than six months and above. Here you will buy a bullish wave or sell a bearish wave and hold it long-term. To illustrate this, let’s use the price of bitcoin in 2013. One Bitcoin was about$ 220 dollars. Bitcoin Investors who bought one then held it up to date are long-term investors. Their bitcoin value has increased by more than 22598%.