Cryptocurrency or crypto is a digital currency independent from government-issued currencies. This currency can be used to buy goods and services using an online ledger with strong cryptography to secure transactions online. People invest in cryptocurrency because the digital money you have is yours and will always be yours as it does not rely on financial institutions, like a bank, to keep or transfer it. If you are interested in cryptocurrency, specifically Bitcoin, you are on the right page. In this article, you will learn the process of how to purchase cryptocurrency stock, particularly Bitcoin.
Bitcoin was launched in January 2009 and is the first digital currency. Currently, it is the world’s largest cryptocurrency by market cap. It can be sold or use to trade for a product or bought into like a stock. Bitcoin’s value reached $19,857 on Dec. 1, 2020. After more than two weeks, one Bitcoin is already equivalent to $23,454.90. So, let’s not keep you waiting. Keep on reading and learn how to buy cryptocurrency stock below.
How To Purchase Cryptocurrency Stock In Four Steps
1. Choose Where To Buy Bitcoin
There are several ways to buy Bitcoin and other cryptocurrencies. You can choose either exchanges or traditional brokers.
- Cryptocurrency Exchanges – if you decide to buy your Bitcoin or other cryptocurrencies through an exchange platform, then you will have to register with one of them. You will need your email address and your credit or debit card information in this process. There are many cryptocurrency exchange platforms that you can choose from, but there is no need to worry. All of them recognize the same Bitcoin trading price; however, each caters to a different country or continent, which means they offer the rate that corresponds with the currency used in that particular region.
- Traditional Stockbrokers – one way on how to purchase cryptocurrency stock is thru traditional brokers. A few traditional brokers these days give customers a way to buy and sell Bitcoin, like Robinhood. It is the first mainstream investment broker that offers Bitcoin. Similar to its stock-trading platform, Robinhood does not charge any fees for Bitcoin trades. Another traditional stockbroker, TradeStation, offers crypto trading, including Bitcoins.
Other Ways To Buy (or Invest in) Bitcoin
- Bitcoin ATMs – another way on how to purchase cryptocurrency stock is thru Bitcoin ATMs. These are like the usual ATMs. The difference is that its purpose is only for buying and selling Bitcoins. According to Coin ATM Radar, there are more than 7,000 Bitcoin ATMs in the US.
- Peer-to-Peer Bitcoin Owners – you can also opt to buy Bitcoins directly from another Bitcoin owner through peer-to-peer tools such as Bisq and Bitquick. However, it is important to be cautious when purchasing crypto money directly from individuals.
- Grayscale Funds – if you’re asking how to buy stock in cryptocurrency, Grayscale Funds is the answer. This is a digital currency asset manager. Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Classic Trust (ETCG) are two of its investment trusts. They are publicly traded over the counter. This means investors can buy them through several discount brokers.
2. Think About How You Want To Store Your Bitcoin and Other Crypto Money
Bitcoins and other digital money can be stored in digital wallets. It can be a hot wallet or a cold wallet. It is generally faster to transact using a hot wallet. On the other hand, cold wallets have extra security steps that ensure your assets are safe.
- Hot Wallet – when you decide to use a hot wallet, your bitcoins are stored by a trusted exchange or provider. It could be in the cloud and can be accessed using an app or a computer browser. Typically, hot wallets are free to download and use. The downside, though, is that hot wallets are an attractive target for hackers. Some popular hot wallet providers are Coinbase, Electrum, Blockchain, and Mycelium.
- Cold Wallet – cold wallets are small, encrypted portable devices that allow their users to download and carry their bitcoin. It is a bit more expensive than hot wallets but considered much more secure. Popular cold wallets are Trezor, which costs about $80-$170, and Ledger Nano, which costs from about $60 to $120.
3. Make Your Purchase
Now that you have chosen an exchange platform and have linked your Bitcoin wallet, the next thing to do is decide how much Bitcoin you want to buy. The good news here is that you are not required to buy 1 Bitcoin. It can be sold and bought for fractional shares, so you can invest $1 and receive 0.00013 Bitcoin if it is trading at $7450 per Bitcoin. When the trading price increases, the value of the Bitcoin you bought will increase as well.
4. Manage Your Investment
Considering you already have your Bitcoins, you have two options: spend them in a marketplace or buy and wait.
- Spend In A Marketplace – cryptocurrencies, such as Bitcoin, have their own e-commerce marketplaces. This is where you can trade your digital money for products like jewelry or software programs. Bitify and Glyde are common Bitcoin marketplaces.
- Buy and Wait – one key to make money on Bitcoin is to buy and let it sit – for a long time. Trading prices of cryptocurrencies can go down hundreds of dollars in a blink of an eye. Watching its value soar up one day and dive the next day can be a bit too much and may drive you nuts. This is why investors say that the money you put into Bitcoin or any other cryptocurrency should be something you are willing to lose. Just buy the coins and allow them to grow, then check the price every once in a long while.
As more and more people these days become interested in investing, the term cryptocurrency is becoming popular. Learning how to purchase cryptocurrency stocks can be an essential skill that may be useful in the near future. Just remember that every investment, whether it is digital or not, there will always be risks. Do your part by learning more about it before diving in. Find out more about cryptocurrency stocks here!