Bitcoin investments can be made directly or through ETFs regulated by the Stock Exchange, which provides more security for investors. In addition, Bitcoin futures contracts can be used as an additional mechanism to hedge one’s portfolio.
Cryptocurrencies attract investors because of the possibility of making huge profits in a short period of time. Therefore, it is no surprise that one of the most searched questions on the internet on this topic is: “How to invest in Bitcoin today”.
However, before explaining how to invest in this crypto asset, it is important to know what Bitcoin is and what the risks of this asset class are. In any case, it is good to emphasize the following premise:
Crypto assets are more volatile than traditional allocations and substantially increase a portfolio’s risk profile. Before starting, please note that the term “cryptocurrencies” is just an informal generalization and may be imprecise, as it implies that all virtual assets function as money, while many have different functions and are not always used as a medium of exchange. The term “virtual assets” is more precise and comprehensive, reflecting this diversity of use.
What is Bitcoin?
Before learning how to buy Ethereum, it is important that you understand what this cryptocurrency is and how it works. Bitcoin (BTC) is considered the first decentralized cryptocurrency in history. In other words, it’s a digital asset that operates independently of the influence of financial institutions, banks, or countries.
When Bitcoin was created, a protocol was released, which informed the maximum volume of Bitcoin was 21 million. For many investors, this limit will make BTC more and more valuable as time goes on. The last Bitcoin will be mined in 2140.
How to invest in Bitcoin?
Not everyone knows, but there are different ways to invest in Bitcoin. In addition to direct investment through specialized brokers (exchanges), Bitcoin can also be acquired through:
– P2P trading, which is a transaction that occurs directly between users, without a company intermediary.
– Exchange Traded Funds, ETFs.
– Bitcoin mining.
– ATMs in several countries around the world, including Australia.
Buying Bitcoin is probably the simplest way that any investor can think of. However, a potential investor needs to check the legal status and any regulations regarding the purchase of Bitcoin in his country. Once everything is secured, it is time to choose an exchange and if the buyer wants to remain anonymous, he can choose a decentralized exchange. If he is okay with his data being exposed and wants to get more services, choosing a centralized exchange is recommended.
A centralized exchange is basically similar to a regular exchange that handles stock purchases, foreign exchange trading, and the like. Local bank account linkage is also an advantage. After purchase, buyers can store their Bitcoin outside the exchange and that means in a digital wallet. Usually, centralized exchanges offer crypto wallets but it is not a requirement.
PayPal can also be a simple purchasing medium. You can buy at least 4 cryptocurrencies directly with your PayPal balance (this includes Bitcoin). You can also buy with your credit card. In short, there are many different ways you can invest in Bitcoin but buying your first Bitcoin is often the beginning of the end.
