With the popularity of Bitcoin and other cryptocurrencies, many new traders and investors are flocking to the industry. Some have the intention of being part of a digital revolution, while others are hoping to make a handsome profit. Whichever your reason for buying Bitcoin is, here are seven tips to help you do it right.
1. Know where to store Bitcoin
Before buying Bitcoin, you need to know where to store it. Cryptocurrency is not unlike fiat currency, at least in terms of storage. Without safe storage, you risk losing your money to virtual thieves such as hackers or fraudsters.
There is a variety of ways to store Bitcoin, one of which is having a digital wallet. KeepKey, for example, is a portable, cold-storage wallet. It is extremely safe and can hold Bitcoin as well as a variety of other currencies, such as Ethereum and Ripple.
2. Know where to buy Bitcoin
There are several ways of buying Bitcoin, but using a cryptocurrency exchange is the most popular. There are many kinds of exchanges to choose from, with some accepting numerous alternative methods of payment. Buying Bitcoin is also possible without intermediaries through the platform known as LocalBitcoins.
Although most exchanges such as Coinbase and Binance are available to residents of almost all countries around the world, other exchanges are limited by their licensing. What’s more, using or buying Bitcoin is also illegal in certain countries, so it’s important to check your country’s laws before venturing into such an investment.
3. How to pay for Bitcoin
Bitcoin can be bought by using fiat currency or other cryptocurrencies. Different exchanges and platforms offer you a select range of options to use, but different payment methods normally come with different pros and cons.
Bank transfers, for example, are normally slow but don’t come with any additional platform fees. Debit and credit cards as well as some eWallets are instant but sometimes incur an extra charge.
4. Know when to buy Bitcoin
In many ways, Bitcoin and other cryptocurrencies are commodities, whose value fluctuates considerably over a short period. As a result, it is important that you understand the best times to purchase crypto, in order to reduce the possibilities of a long-term loss of value.
Reading and understanding value charts and keeping up to date with cryptocurrency news will help you determine the best times when buying Bitcoin.
5. Have a plan
Before you buy your first Bitcoin, you should have a plan of what you hope to achieve. If your goal is to turn a profit with Bitcoin, then you need to set the price at which you will sell the coin.
On the other hand, if your goal is to keep the cryptocurrency for the long-term, then you should not check its value daily, since you’ll be more tempted to sell if the price starts increasing.
Creating and sticking to a plan has many benefits. Apart from reducing anxiety, it can help you choose the right exchange and wallet to suit your needs. For instance, experienced traders might want to consider margin trading, while long-term investors could seek the safest wallet available.
6. Be aware and prepared for FOMO
FOMO is just one of a series of crypto jargon which is common in the industry. The “fear of missing out” is a common human condition which pushes you to take action simply because you feel as though you might lose out on an opportunity.
The fear of regret becomes stronger than any logical argument. It’s good to acknowledge the fact that there will be times when you might experience FOMO. Nevertheless, you need to have a plan and stick to it, as this will help prevent a lot of stress and uncertainty.
7. Continue learning
The cryptocurrency world is an ever-evolving one, which is growing in scope and community size with every passing day. Major tech companies, financial institutions and governments are shaping the industry, and this has a direct effect on the popularity, and hence the price of Bitcoin.
Even after buying Bitcoin, you should make sure to keep yourself updated with any new happenings within the industry. This knowledge will enable you to use your digital currency mindfully.
(Featured image by DepositPhotos)
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