Bitcoin is the world’s first electronic currency and was born in 2009. Until now, Bitcoin is still one of the most attractive investment channels for investors. So how to invest in Bitcoin? Let’s find out with CoinMinutes through the article below.
How to Invest in Bitcoin in 2023?
Investing in Bitcoin involves purchasing the digital currency with the anticipation that its value will increase in the future, resulting in a profitable return. Essentially, investing in Bitcoin is similar to investing in other assets such as stocks, gold, and real estate, where investors purchase at a lower price and expect to sell at a higher price. So, how can one invest in Bitcoin in the year 2023?
Select a Cryptocurrency Exchange
To invest in Bitcoin effectively, you must answer the question: Where will you trade Bitcoin? Like stocks, Bitcoin will be traded on cryptocurrency exchanges. According to recent statistics, there are about 200 – 300 exchanges worldwide. However, there are only a few exchanges that are considered reputable and trustworthy for trading and investing in cryptocurrencies.
Some reputable exchanges that you can refer to are Coinbase, Binance, Bitfinex, Kraken, Gemini,…
Here are some factors you need to consider before choosing an exchange:
- Safe and secure.
- Amount and currency.
- Transaction fees.
- Customer support.
After choosing a reputable Bitcoin exchange, you can access the exchange’s spot feature to quickly buy Bitcoin. With this feature, you can search and select the BTC USDT trading pair. Until now, BTC USDT has been the trading pair with the largest volume and extremely good liquidity. After selecting, review the price of Bitcoin and USDT to start converting the amount of USDT for the BTC you desire.
Explore Storage and Digital Wallet Options
Bitcoin wallet is a place you can use to store, manage, send, and receive Bitcoin. Each type of Bitcoin wallet you create will have a wallet address, which is similar to your “bank account number”. You can use this wallet address to send/receive BTC from others.
Currently, there are three popular types of Bitcoin wallets: hot wallets, cold wallets, and exchange wallets.
- A hot wallet is an online wallet, connected to the internet and users can access it anytime, anywhere. Hot wallets are very convenient if you are a trader who often has to exchange, buy, and sell. Some popular hot wallets are Coin98 Wallet, Metamask, Trust Wallet,…
- A Cold wallet is a secure method of storing your Bitcoins. A cold wallet is a piece of hardware that stores money. Some popular cold wallets such as Ledger Trezor,…
- An exchange wallet is a wallet operated by your cryptocurrency exchange. Some exchanges will automatically provide you with a wallet when you open an account. Similar to hot wallets, exchange wallets are also convenient for trading. However, if you want to hold Bitcoin, you should not choose this method.
Depending on your purpose and financial conditions, you can choose the appropriate type of cryptocurrency storage wallet.
Decide How Much to Invest
After setting up your e-wallet and choosing a suitable Bitcoin exchange, you will proceed to buy Bitcoin. At this point, the amount of Bitcoin you want to invest depends entirely on your decision. If you are new, you should consider investing a small amount to refer to the market and understand the Bitcoin investment mechanism first. If you have experience and understand how the cryptocurrency market works, make yourself a specific investment plan and determine the amount of BTC to invest that you feel is appropriate. Next, on the exchange, find and select the “Buy Bitcoin” section. Enter the quantity and volume of bitcoin to buy and transfer money to the seller. The bitcoins you just placed will then be transferred directly to your wallet.
Manage Your Bitcoin
Just like any other investment, you need to track and manage your Bitcoin to make it most effective.
Bitcoin is a high-risk investment and you should carefully consider your risk tolerance before investing in it. So when you first start investing in Bitcoin, you should trade in small amounts to get used to it first. When you are proficient and understand the process of every transaction, then trade in large quantities.
To manage your bitcoin effectively, you need to pay attention to the following:
- Avoid fake exchanges. Always choose large, reputable, and long-standing exchanges.
- Do not give account information or private keys to strangers
- Perform 2FA and KYC verification before trading on the exchange
- Do not access links that you do not know what they are
- If you don’t believe you’ve won, the giveaway asks you to send them Bitcoin and then they send it back.
- Store recovery keys or characters offline to avoid being hacked.
- Regularly monitor and update news related to the Bitcoin market to make appropriate investment decisions.
What do I need to know before buying Bitcoin?
Before buying Bitcoin, you need to learn how to buy Bitcoin, then you need to consider the exchange rate, transaction fees, security, and stability of the exchange. Understand how to safely store Bitcoin with an e-wallet and avoid sharing your private information.
What to look for in a Bitcoin to invest?
When investing in Bitcoin, you need to find a reputable exchange and virtual wallet that ensures security and compliance with regulations. In particular, you need to look for exchanges with reasonable transaction fees and high BTC liquidity to easily buy and sell.
How much should I invest in Bitcoin as a beginner?
When you first start investing in Bitcoin, you should trade in small amounts to get used to it first. When you are proficient and understand the process of every transaction, then trade in large quantities.
Bitcoin investment has its own characteristics compared to conventional investment options. Hopefully, the information that CoinMinutes shared above will help you gain more understanding about how to invest in Bitcoin.