Bitcoin is a fascinating cryptocurrency. Although it has faced enormous challenges, it has been resilient, rising every time stronger from the ashes, just like a Phoenix. Its price swings have been wild, and while 2022 was a year of turmoil for the leading digital asset and the entire crypto industry, things look a lot different in 2024. This year promises to be one of continued growth for Bitcoin, with the Halving potentially propelling its price to a substantial $400,000. Although it’s an exciting investment, buying Bitcoin can feel daunting for those unfamiliar with the crypto landscape. But here’s the good news: there are different methods to add the mainstream asset to your portfolio. You can buy bitcoin with bank transfer, peer-to-peer, or even through a financial app like PayPal, if that works better for you. It’s worth noting that each method has different pros and cons, so you should consider what each offers and make an informed decision.
If the process of buying your first Bitcoin seems daunting, we’re here to help. We’ve created this guide for you, where we discuss the different methods of buying Bitcoin, give some tips on how to store it safely, and more. Read on!
What are the different ways you can buy Bitcoin in 2024?
Cryptocurrency exchanges
A crypto exchange is one of the most popular ways to buy Bitcoin. Such platforms offer several advantages, such as low trading costs, and wallets ( which can be convenient and allow you to safely store your crypto funds). Remember that the fees can vary from one exchange to another, so conduct your due diligence and see which offers the best features.
Financial apps
Apps like Venmo and PayPal also enable users to trade cryptocurrencies. For instance, with PayPal, the process is straightforward, as you can buy or sell coins through the same app that you’ve used for your online payments. The fees start from $0.49( for trades below $5). However, this option doesn’t allow you to move your Bitcoin around easily, which could be a significant downside.
Bitcoin ATMs
They are similar to normal ATMs – the only difference is that they are specifically designed for buying and selling Bitcoin. They are usually found in the same areas where normal ATMs are, like convenience stores. Before conducting a transaction, you should check the fees you will have to pay and determine where you will send the coins you bought.
Traditional brokers
Trading cryptocurrency using traditional brokers is also possible, especially now that Bitcoin ETFs have been approved. You can choose to buy Bitcoin futures contracts( and pay $5 for each), getting exposure to five Bitcoins. Or, you can trade Bitcoin directly if that works better for you. If you pick this option, you will be charged a commission of 0.12-0.18% of the trade value based on your monthly volume.
Storing your bitcoins safely: the different options available
When buying Bitcoin, you also want to determine where to keep it. The decision you make ultimately depends on how you want to use it. For instance, if you’re looking to trade Bitcoin, it’s a good idea to store it in the crypto exchange of your choice. However, if you want to lock it down or plan to spend your crypto, you can opt for a crypto wallet instead. There are two types of wallets you can use, with significant differences between them: a hot wallet and a cold wallet.
A hot wallet makes it easy to use and move around your digital assets. If you plan to use your coins anytime soon, it makes sense to opt for this type of wallet – but keep in mind that it provides less security than a cold wallet, as it is connected to the Internet and, therefore, more susceptible to digital threats. Different types of hot wallets are available, ranging from desktop wallets and web wallets to mobile wallets.
On the other hand, cold wallets rely on a physical device, which means you can disconnect them from the Internet, thus ensuring your crypto holdings are safe. Although this type of wallet offers increased security compared to a cold wallet, it has some risks, such as the loss of the wallet, theft of a device, and even loss of a password. So, weigh the advantages and disadvantages of the two options and stick to the one that best suits your needs.
How can you use your Bitcoin after buying it?
Generally, Bitcoin has two uses: it can either be an investment or a medium of exchange. In other words, you can choose to hold, trade, or spend it on products or services. Several businesses accept cryptocurrency as a payment option, and you can buy different goods, from smartphones and cars to luxury clothing and bags.
If you decide to use Bitcoin as an investment, that’s a whole other story, and there are several things you need to consider. For instance, you should ask yourself what kind of investing approach works better for you. Some investors opt for day trading, a risky strategy requiring you to buy and sell Bitcoin frequently. However, if you believe in Bitcoin’s potential, you may want to invest in it in the long run. Whatever option you choose, it’s important to remember that Bitcoin, like any other crypto, has its risks and should be approached with caution.
Takeaway
The decision to buy Bitcoin is a major one, so it’s imperative to consider your financial goals before jumping on the crypto bandwagon. However, if you think the investment is suitable for you, remember to follow basic rules, such as allocating only 10% of your portfolio to assets like Bitcoin and understanding what you’re getting yourself into by conducting thorough research.
Many people dream of getting rich quickly with Bitcoin, but this mindset never leads to a successful outcome. Instead, you should see Bitcoin as a new type of investment, which poses its own risks and can equally lead to gains and substantial losses. Discipline is always key when buying Bitcoin, so remember to show a sound judgment whenever you’re trading.
