Bitcoin investing for beginners 2022

bitcoin investing for beginners 2022

But before you jump on the nearest crypto exchange, it is important to understand what you are investing. The Only Cryptocurrency Investing Book You'll Ever Need: An Absolute Beginner's Guide to the Biggest "Millionaire Maker" Asset of 2022 and Beyond. Investing in Cryptocurrency Stocks. Zhiyuan Sun. Updated: March 22, 2022, 3:17 p.m. Markets for digital currencies such as Bitcoin (CRYPTO:BTC) were.

Bitcoin investing for beginners 2022 - final, sorry

How to start investing in cryptocurrency: A guide for beginners

Despite its well-known volatility, cryptocurrency is on fire and many investors are looking to profit on its white-hot rise. Cryptos such as Bitcoin and Ethereum ebb for a while and then climb higher, and many other popular digital currencies are doing so, too. Experienced traders have been speculating on crypto for years, but what if you’re new to the market and looking to get a piece of the action?

Here’s how to start investing in cryptocurrency and what you need to watch out for.

5 steps for investing in cryptocurrency

First things first, if you’re looking to invest in crypto, you need to have all your finances in order. That means having an emergency fund in place, a manageable level of debt and ideally a diversified portfolio of investments. Your crypto investments can become one more part of your portfolio, one that helps raise your total returns, hopefully.

Pay attention to these five other things as you’re starting to invest in cryptocurrencies.

1. Understand what you’re investing in

As you would for any investment, understand exactly what you’re investing in. If you’re buying stocks, it’s important to read the prospectus and analyze the companies thoroughly. Plan to do the same with any cryptocurrencies, since there are literally thousands of them, they all function differently and new ones are being created every day. You need to understand the investment case for each trade.

In the case of many cryptocurrencies, they’re backed by nothing at all, neither hard assets nor cash flow. That’s the case for Bitcoin, for example, where investors rely exclusively on someone paying more for the asset than they paid for it. In other words, unlike stock, where a company can grow its profits and drive returns for you that way, many crypto assets must rely on the market becoming more optimistic and bullish for you to profit.

Some of the most popular coins include Ethereum, Dogecoin, Cardano and XRP. Solana has been another massively successful coin as well. So before investing, understand the potential upside and downside. If your financial investment is not backed by an asset or cash flow, it could end up being worth nothing.

2. Remember, the past is past

A mistake that many new investors make is looking at the past and extrapolating that to the future. Yes, Bitcoin used to be worth pennies, but now is worth much more. The key question, however, is “Will that growth continue into the future, even if it’s not at quite that meteoric rate?”

Investors look to the future, not to what an asset has done in the past. What will drive future returns? Traders buying a cryptocurrency today need tomorrow’s gains, not yesterday’s.

3. Watch that volatility

The prices of cryptocurrencies are about as volatile as an asset can get. They could drop quickly in seconds on nothing more than a rumor that ends up proving baseless. That can be great for sophisticated investors who can execute trades rapidly or who have a solid grasp on the market’s fundamentals, how the market is trending and where it could go. For new investors without these skills – or the high-powered algorithms that direct these trades – it’s a minefield.

Volatility is a game for high-powered Wall Street traders, each of whom is trying to outgun other deep-pocketed investors. A new investor can easily get crushed by the volatility.

That’s because volatility shakes out traders, especially beginners, who get scared. Meanwhile, other traders may step in and buy on the cheap. In short, volatility can help sophisticated traders “buy low and sell high” while inexperienced investors “buy high and sell low.”

4. Manage your risk

If you’re trading any asset on a short-term basis, you need to manage your risk, and that can be especially true with volatile assets such as cryptocurrency. So as a newer trader, you’ll need to understand how best to manage risk and develop a process that helps you mitigate losses. And that process can vary from individual to individual:

  • Risk management for a long-term investor might simply be never selling, regardless of the price. The long-term mentality allows the investor to stick with the position.
  • Risk management for a short-term trader, however, might be setting strict rules on when to sell, such as when an investment has fallen 10 percent. The trader then rotely follows the rule so that a relatively small decline doesn’t become a crushing loss later.

Newer traders should consider setting aside a certain amount of trading money and then using only a portion of it, at least at first. If a position moves against them, they’ll still have money in reserve to trade with later. The ultimate point is that you can’t trade if you don’t have any money. So keeping some money in reserve means you’ll always have a bankroll to fund your trading.

It’s important to manage risk, but that will come at an emotional cost. Selling a losing position hurts, but doing so can help you avoid worse losses later.

5. Don’t invest more than you can afford to lose

Finally, it’s important to avoid putting money that you need into speculative assets. If you can’t afford to lose it – all of it – you can’t afford to put it into risky assets such as cryptocurrency, or other market-based assets such as stocks or ETFs, for that matter.

Whether it’s a down payment for a house or an important upcoming purchase, money that you need in the next few years should be kept in safe accounts so that it’s there when you need it. And if you’re looking for an absolutely sure return, your best option is to pay off debt. You’re guaranteed to earn (or save) whatever interest rate you’re paying on the debt. You can’t lose there.

Finally, don’t overlook the security of any exchange or broker you’re using. You may own the assets legally, but someone still has to secure them, and their security needs to be tight. If they don’t think their cryptocurrency is properly secured, some traders choose to invest in a crypto wallet to hold their coins offline so they’re inaccessible to hackers or others.

Other ways to invest in cryptocurrency

While investing directly in cryptocurrency may be the most popular way to do so, traders have other ways to get into the crypto game, some more directly than others. These include:

  • Crypto futures: Futures are another way to wager on the price swings in Bitcoin, and futures allow you to use the power of leverage to generate massive returns (or losses). Futures are a fast-moving market and exacerbate the already volatile moves in crypto.
  • Crypto funds: A few crypto funds (such as the Grayscale Bitcoin Trust) also exist that allow you to wager on the price swings in Bitcoin, Ethereum as well as a few other altcoins. So they can be an easy way to buy crypto through a fund-like product.
  • Crypto exchange or broker stocks: Buying stock in a company that’s poised to profit on the rise of cryptocurrency regardless of the winner could be an interesting option, too. And that’s the potential in an exchange such as Coinbase or a broker such as Robinhood, which derives a huge chunk of its revenues from crypto trading.
  • Blockchain ETFs: A blockchain ETF allows you to invest in the companies that may profit from the emergence of blockchain technology. The top blockchain ETFs give you exposure to some of the key publicly traded companies in the space. But it’s important to note that these companies often do much more than crypto-related business, meaning your exposure to cryptocurrency is diluted, reducing your potential upside and downside.

Each of these methods varies in its riskiness and exposure to cryptocurrency, so you’ll want to understand exactly what you’re buying and whether it fits your needs.

Cryptocurrency investing FAQs

How much money do I need to start investing in cryptocurrency?

In theory it takes only a few dollars to invest in cryptocurrency. Most crypto exchanges, for example, have a minimum trade that might be $5 or $10. Other crypto trading apps might have a minimum that’s even lower.

However, it’s important to understand that some trading platforms will take a huge chunk of your investment as a fee if you’re trading small amounts of cryptocurrency. So it’s important to look for a broker or exchange that minimizes your fees. In fact, many so-called “free” brokers embed fees – called spread mark-ups – in the price you pay for your cryptocurrency.

How does a blockchain work?

Cryptocurrency is based on blockchain technology. Blockchain is a kind of database that records and timestamps every entry into it. The best way to think of a blockchain is like a running receipt of transactions. When a blockchain database powers cryptocurrency, it records and verifies transactions in the currency, verifying the currency’s movements and who owns it.

Many crypto blockchain databases are run with decentralized computer networks. That is, many redundant computers operate the database, checking and rechecking the transactions to ensure that they’re accurate. If there’s a discrepancy, the networked computers have to resolve it.

How do you mine cryptocurrency?

Some cryptocurrencies reward those who verify the transactions on the blockchain database in a process called mining. For example, these miners involved with Bitcoin solve very complex mathematical problems as part of the verification process. If they’re successful, miners receive a predetermined award of bitcoins.

To mine bitcoins, miners need powerful processing units that consume huge amounts of energy. Many miners operate huge rooms full of such mining rigs in order to extract these rewards. As of early 2022, running the Bitcoin system burned as much energy as a medium-sized country.

How can I invest in Bitcoin?

If you’re looking to invest in Bitcoin, you have a variety of ways to do so, and you can work with a number of companies, including:

  • Crypto exchanges: Exchanges have some of the widest selection of cryptocurrencies, and they tend to be the most competitive on price. Top players include Coinbase, Kraken and Binance, but there are literally dozens of others.
  • Traditional brokers: Many traditional brokers also allow you to trade Bitcoin in addition to stocks and other financial assets, though they have a relatively limited selection of other cryptocurrencies. Top players here include Interactive Brokers, TradeStation and tastyworks.
  • Financial apps: Many financial apps now allow you to trade Bitcoin and a few other cryptos. Top players here include Robinhood and Webull as well as payment apps such as PayPal, Venmo and Cash App.

If you’re looking to buy Bitcoin, pay particular attention to the fees that you’re paying. Here are other key things to watch out for as you’re buying Bitcoin.

What are altcoins?

An altcoin is an alternative to Bitcoin. Many years ago, traders would use the term pejoratively. Since Bitcoin was the largest and most popular cryptocurrency, everything else was defined in relation to it. So, whatever was not Bitcoin was lumped into a derisive category called altcoins.

While Bitcoin is still the largest cryptocurrency by market capitalization, it’s no longer as dominant as it was in the very early days of cryptocurrency. Other altcoins such as Ethereum and Solana have grown in popularity, making the term altcoin somewhat outmoded. Now with a reported 15,000 or more cryptocurrencies in existence, it makes less sense than ever to define the industry as “Bitcoin and then everything else.”

Bottom line

Cryptocurrency is a highly speculative area of the market, and many smart investors have decided to put their money elsewhere. For beginners who want to get started trading crypto, however, the best advice is to start small and only use money that you can afford to lose.

Learn more:

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Digital currencies are continuing to make headlines. Berkshire Hathaway, the company of star investor Warren Buffett, has bought $1 billion worth of stock in a digital bank focusing on cryptocurrencies.

However, regulators and central banks remain concerned. The price of bitcoin plunged to $34,000 in February from $69,000 in November. It is now around $39,000. So should you join the hype or run a mile?

In this article we explain:

Related content: Is cryptocurrency a good investment?

This article contains affiliate links that can earn us revenue.*

What is bitcoin and how does it work?

The concept of digital money that you use online is not that complicated in itself. After all, most of us will be familiar with transferring money from one online bank account to another.

Cryptocurrencies like bitcoin are digital assets that operate like normal currency, but with notable differences. They use peer to peer payment methods, without the banks taking a cut with every transaction. There are no physical versions of the coins either.

Each bitcoin is created (or mined) using an encrypted code, which is a string of numbers and letters. The same equation used to create the code is can “unlock” it (like a virtual key).

Other important points about bitcoin:

  • Cryptocurrencies, like bitcoin, ethereum and cardano, are a form of payment that uses blockchain technology to send data in cyberspace
  • Each bitcoin must be mined
  • It is finite: only 21 million bitcoins that can be mined in total
  • Cryptocurrencies are “decentralised” meaning they are not regulated by a financial authority, like a government or central banks
  • Most platforms will allow bitcoin purchases using credit cards (bear in mind that your credit card provider will probably charge you a fee to do this)

Why has bitcoin dropped?

The price of bitcoin and several other leading cryptocurrencies suffered huge falls in December 2021 and prices have been on a downward trajectory so far in 2022.

The Fed’s January meeting to decide whether to raise interest rates saw crypto fall along with other stocks and shares.

The bitcoin price is around $35,000, as of 24 February, according to data from Coinbase*. That’s a long way from the all-time high of $69,000 seen in November.

The recent turmoil has been caused by:

  • Uncertainty around rising interest rates in the US and UK, causing a sell-off in risky assets
  • China making cryptocurrency transactions illegal
  • Suggestions that Russia could ban cryptocurrency trading and mining, causing prices to plummet

There have also been threats of further regulation for cryptocurrency investments in the future.

Should I invest in bitcoin?

Bitcoin is extremely volatile. If you are willing to take the risk, first make sure you understand what you are investing in and have a crypto investment strategy.

Also make sure you aren’t investing simply because you have a fear of missing out. There are a number of questions you should ask yourself before getting involved:

  1. Do I understand what I am investing in and how bitcoin and the crypto market work?
  2. Am I happy with the level of risk?
  3. How much more expensive is it now compared to a few months ago? If so, why am I wanting to buy a thing because its price is higher? Where else in my life do I do that?
  4. Is there any evidence to suggest prices could rise even higher?
  5. If I buy it now with a view to sell it for even more later, who do I think will buy it from me for that higher price and why?
  6. If an asset is so great, why was I not interested when it was much cheaper?
  7. Have I convinced myself that I am in some way “in the know?”

If you don’t have answers to these questions, it’s probably not a good idea to invest. If you do buy bitcoin, make sure you aren’t putting money you need on the line. Read more about cryptocurrency tips (and mistakes to avoid).

If you are new to investing and want to know more about the general principles and how to get started, check out our guide here.

Like any investment, cryptocurrency comes with risks and potential rewards. Compared to traditional types of investments, cryptocurrency is particularly risky.

Here are some things to think about before you invest:

  1. We definitely don’t recommend investing all your life savings on cryptocurrency markets
  2. It’s best to see it a bit like gambling so only invest small amount of your disposable income and be prepared to lose the lot
  3. Never invest more than you can afford to lose
  4. If you haven’t got much money left at the end of each month, it’s best to steer clear of crypto and focus on saving your money instead
  5. Like traditional assets, it’s best to treat cryptocurrency as a long-term investment to give you the best chance of making money
  6. Cryptocurrencies are extremely volatile, subject to bull runs and market crashes

The ups and downs of bitcoin

It is hailed by fans as a market-disrupting liberation and demonised by many personal finance experts as a dangerous creation. One things for sure is that bitcoin is volatile. 

Since December 2020, bitcoin has enjoyed a theatre of dramatic ups and downs. We outline some of these here: is a bitcoin crash coming?

The problem is that the price of cryptocurrencies is not underpinned by any intrinsic value. It is determined by one thing: confidence, says Mark Northway, investment manager at Sparrows Capital.

So if you decide to invest, be prepared for a bumpy ride.

Can you lose all your money in bitcoin?

Yes you certainly can. Crypto is very risky and not like conventional investing in the stock market.

Bitcoin’s value is based purely on speculation. This is different to company stocks where the share price will move depending on how the business is performing.

Important: cryptocurrencies are unregulated by the UK watchdog, the Financial Conduct Authority. Crypto platforms are only regulated for anti-money laundering purposes.

There are three main ways to lose all you money with bitcoin:

  • The value plummetsand you sell: crypto is volatile with its price determined by sentiment. Though technically you only lose money if you sell an investment for less than you bought it for. This is known as “crystallising your losses”.
  • Your memory: experts estimate 20 per cent of all cryptocurrency has either been forgotten about or lost with a current value of around $140billion, according to Crypto data firm Chainalysis
  • Cyber crime: hackers and scammers are thought to steal around $10million worth of cryptocurrency every day, according to Atlas VPN

Some people choose to take their holdings offline and store it in a physical device called a cold wallet, otherwise known as a hardware wallet or cold storage that is similar to a USB stick. While this protects from online attacks you risk losing your holdings.

As with any investment, do your due diligence and don’t pin all your hopes on one company or one cryptocurrency.

Spread your money around so you spread the risk and only invest what you can afford to lose.

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How to make money by investing in bitcoin

Like any investment, making money depends on what price you buy and sell an asset for. If you sell when its price is higher than you bought it for, you will make money.

If you sell for a lower price than you bought it for, you will lose money.

For example, if you had invested in bitcoin at the start of:

  • 2020 and sold on 31 December 2020, you would have made a 300% profit
  • 2018 and sold on 31 December 2018, you would have made a 73% loss

Bitcoin is extremely volatile so the trick is not to panic and crystallise your losses by selling when its value inevitably falls. This is the same with all investments.

Bitcoin price graph

Ways to invest in bitcoin

Buying the coins (or unit of a coin) on a cryptocurrency exchange is the most common way of investing in bitcoin.

But there are other options:

Buy shares in bitcoin-related companies

You could invest in cryptocurrency exchanges or even buy shares in companies that are accepting bitcoin as payment.

Bitcoin ETFs

You could invest in a bitcoin exchange traded fund ETF. This copies the price of the digital currency, allowing you to buy into the fund without actually trading bitcoin itself.

Invest in blockchain technology companies

You could invest in the blockchain network (the system for recording information about crypto). For example, tech platform Solana claims to be the fastest blockchain in the world.

Bitcoin funds

Several investment companies are launching bitcoin funds.

It will still be volatile, but it could be easier to sell your investment and get your money back than investing directly. 

There are also funds that have some exposure to bitcoin as well as traditional assets like shares and bonds.

Bitcoin options

These are a form of financial derivative that gives you the right to buy or sell bitcoin at a set price (known as a strike price) before a certain date of expiry.

Unlike buying bitcoin cryptocurrency outright, bitcoin options enable you to take a speculative position (up or down) on the future direction of a market price.

You would buy a call option if you believe the market price would increase:

  • If your prediction was correct and the market price increased above the bitcoin option’s strike price, you’d be able to buy bitcoin at the pre-specified price. How far the bitcoin price rose past the strike price determines how much profit you’d make.
  • If your prediction was wrong and the price of bitcoin fell, you could let the options contract expire and only lose the premium you paid to open the trade.

Read aboutLewis, who taught himself about cryptocurrency and made £8,500 in less than a year after setting up an account with trading platform eToro.

Is bitcoin bad for the environment?

The digital currency uses as much power as the Netherlands every year, with just 30 countries using more energy, according to researchers from the University of Cambridge.

Computers that mine bitcoin use up to 1% of the world’s electricity supply.

While some of bitcoin’s consumption is renewable (an estimated 39%), fossil fuels are still being used to power the mining and servicing of the digital currency.

This is why electric car manufacturer Tesla has stopped accepting crypto payments, causing bitcoin to fall. Find out more in our Guide to eco-friendly cryptocurrencies.

What are the fees when buying bitcoin?

If you want to buy and sell bitcoin, there are usually fees to pay, such as:

  • Transaction fees
  • Deposit fees
  • Withdrawal fees
  • Trading fees
  • Escrow fees

These usually cost a few percent of the total transaction value.

Do financial institutions support bitcoin?

Governments, regulators and companies are looking closely at bitcoin and other cryptocurrencies.

Companies adopting bitcoin include:

Investment companies that are showing an interest include:

  • The world’s largest asset manager, BlackRock, opened two of its funds to the possibility of investing in bitcoin futures
  • UK based Ruffer Investment Management added bitcoin to its multi-asset portfolios before pulling out five months later with a  $1.1B profit
  • In 2020, one of the world’s biggest index providers, S&P Dow Jones Indices announced it would launch indexing services in 2021 for over 550 of the top traded cryptocurrencies.

The Bank of England has been exploring the possibility of its own central bank-backed digital currencies. This has been dubbed as “britcoin”. Other central banks like the Federal Reserve have been doing the same.

As more institutional investors get on board with crypto assets for capital gains, this could help to calm dramatic price moves.

Crypto friendly banks UK

Most of the UK’s major banks now let you move money between a regulated crypto exchange and your bank account.

However, some banks are more cautious than others. For example, Starling Bank had imposed a temporary suspension on outbound faster payments to cryptocurrency exchanges in order to protect customers.

The banks are continually weighing up the risks. Some make it easier for customers to move money to and from crypto exchanges.

What is Binance and can I still use it in the UK?

The UK financial watchdog has blacklisted cryptocurrency exchange Binance and banned it from carrying out any regulated activity over concerns about its money laundering controls.

The regulator has also ordered the company to stop any form of advertising in the UK.

Binance isn’t based in the UK, so the British regulator doesn’t have the power to stop investors from buying and selling cryptocurrency using the exchange. However exchanges do have to register with the FCA to operate in the UK and are monitored for money-laundering.

This is a clear warning that investors should be very cautious.

Why are regulators concerned?

The FCA has also warned investors to be wary about companies that promise high returns from cryptocurrency. The nature of investment means that there is never a guarantee of making money.

In January 2021 the FCA banned the sale of complex derivatives that speculate on cryptocurrency movements.

This means that financial services can’t offer retail customers contracts for difference, spreadbet options, futures and exchange traded notes that focus on digital currencies. 

China’s crypto ban

Trading cryptocurrency in China has been illegal since 2019, in what Beijing says is an attempt to stop money-laundering. People could still trade online however on foreign exchanges.

At the end of September 2021, China’s central bank went a step further by banning bitcoin transactions and basically making cryptocurrency illegal. The central bank warned that cryptocurrency “seriously endangers the safety of people’s assets”, which knocked thousands of dollars off the price of bitcoin.

Banks and payment firms are banned from providing cryptocurrency transaction services. In May 2021, three state-backed organisations announced there would be no protection for consumers if they lost any money from crypto trading.

The following month, banks and payment platforms were told to stop facilitating transactions while bans were issued on crypto “mining”.

Amazon to accept bitcoin as payment?

If the rumours are true, the technology company could accept bitcoin payments sooner rather than later which could drive the price of the cryptocurrency upwards.

This comes after Amazon posted a job advert looking to hire someone to develop its digital currency strategy.

Amazon isn’t the only tech giant to be branching into cryptocurrency; there are rumours circulating that Apple will use some of its large cash reserves to invest in bitcoin.

“Given the huge volatility and that the use case of crypto currencies is far from proven, traders should only dabble with money they can afford to lose.’’

Susannah Streeter
Senior Investment and Markets Analyst, Hargreaves Lansdown

Is there a less risky way of investing in crypto?

“Stablecoins” could be a less risky way of investing in cryptocurrency, according to Gavin Brown, associate professor in financial technology at the University of Liverpool.

Brown points to tether, the largest stablecoin, backed by one dollar per coin. It topped the $50bn mark on 26 April 2021 but he warns that potential investors shouldn’t necessarily see tether as the next big thing.

“In theory it won’t ever be worth more than a dollar. But it’s potentially an interesting option for any varied portfolio and it could be a slice of stability if [other] things start to suffer.”

The stablecoin has not been without controversy either – being fined by the New York Attorney General and banned from the state the year.

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Decided Bitcoin is a good investment? You can buy BTC on eToro and Exodus.

A collective insanity has sprouted around bitcoin over the last decade. It’s hard to predict whether this cryptocurrency will become the global reserve currency or a store of value as widely accepted as gold. The thrill of riches or ruin leaves some investors wary, but others want to chase the chance for massive profits from investing in bitcoin. Bitcoin is certainly a revolutionary technology, and it’s much less risky in 2022 than it was in 2012. After becoming legal tender in El Salvador in 2021, other countries will look to copy this move to attract innovation, while others may ban it entirely in attempt to save their fiat currency. Bitcoin has taken center stage in the global geopolitical climate, and 2022 looks like it may be the year of massive adoption.

Start with our guide to learn more and make your own judgment if bitcoin is a good investment for you.

Simply Put: Is Investing in Bitcoin Risky?

Similar to any speculative investment, buying Bitcoin obviously carries risk. Since its inception, Bitcoin was the 1st digital asset to beget the current ecosystem of cryptos. For quite a while, it grew an underground following of investors who saw its future as a possible replacement to the physical monetary system. Now Bitcoin has become a household name as institutions and governments develop ways to serve their customers growing demand for exposure.

Similar to how the internet was once a speculative investment, Bitcoin has received similar criticism. In reality, Bitcoin‘s current adoption rate outpaces that of the internet’s in 1998, and millions of people now own Bitcoin.

In 2021, El Salvador became the 1st country in the world to make Bitcoin a legal tender; Paraguay and other countries look to follow suit. El Salvador is also the first and only country to have Bitcoin in its treasury. As of early 2022, El Salvador has 1,800 bitcoin. President Nayib Bukele has not been shy about announcing his purchases on Twitter.

As the traditional finance world realizes Bitcoin’s potential for disruption, they must choose either to adopt cryptocurrencies or face irrelevance. The personal decision to invest in bitcoin comes down to your appetite for risk and your perspective on the future of humanity. For example, Russia has stated they are looking into cryptocurrencies to lower their dependence on the US dollar. Bitcoin has the potential to disrupt the US Dollar in a massive way, and it is simply too big to be ignored at this point.

The main reason a traditional investor may want exposure to Bitcoin is to hedge against inflation and potentially the collapse of the fiat-based economy. Bitcoin’s volatility is a concern to may investors, however volatility is expected to decrease forever as institutions and governments enter the market with long-term interest.

Where to Invest in Bitcoin

Bitcoin is available from a multitude of centralized cryptocurrency exchanges. The safest exchanges are U.S. based, which also means you’ll need to comply with the SEC’s know your customer (KYC) guidelines. For tax purposes, making an exchange account will require inputting your personal information including your address and social security number. Once you’ve got this handy, you’re ready to get started.

Here are the steps to invest in bitcoin:

  1. Open an account with Coinbase or another exchange from the list below.
  2. Connect a bank account and deposit funds into your exchange wallet.
  3. Buy Bitcoin (BTC).
  4. Buy a wallet (optional).

1. eToro

Trade popular cryptocurrencies, explore professionally managed portfolios and connect with traders. eToro currently supports the purchase and sale of several popular cryptocurrencies. Check out the list of some of the more popular assets available to trade on eToro.

eToro
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Disclosure: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.

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eToro, headquartered in Cyprus, England and Israel, has provided forex products and other CFD derivatives to retail clients since 2007. A major eToro plus is its social trading operations, including OpenBook, which allows new clients to copy trade the platform’s best performers. Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features

Best For
  • U.S. based cryptocurrency traders
  • Investors looking to CopyTrade other traders
  • Simple user interface
Pros
  • Several major cryptocurrencies and altcoins
  • Expansive network of social trading features
  • Large client base for new traders to imitate

2. Coinbase

Coinbase makes it safe and simple for you to buy, sell and hold bitcoin. You can buy a portion of bitcoin with a $0 account minimum.

Pay for purchases conveniently using your debit card or by connecting your bank account. Owning bitcoin on this brokerage is as simple as creating an account, verifying your identity and buying your cryptos. Also, Coinbase has a program called Coinbase Earn that pays you to learn about cryptocurrencies. Coinbase Earn is a great way to add crypto to your portfolio without actually needing to invest your own money.

Take control of your bitcoin investment everywhere you go through the Coinbase mobile app. The brokerage allows you to hold onto your bitcoin, convert it into another crypto, spend it on expenses and transfer it to anyone, anywhere in the world.

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If you’re looking to gain exposure to Bitcoin – you can invest in this top-rated cryptocurrency in less than 10 minutes via a trusted online broker.  

In this guide, we clear the mist by showing you how to invest in Bitcoin with a low-cost and regulated brokerage site. 

We also discuss whether Bitcoin represents a viable investment and what risks you need to consider before proceeding.

How to Invest in Bitcoin 2022 – Quick Guide

You can invest in Bitcoin right now via the SEC-regulated broker eToro – which allows you to get started with a minimum purchase of just $10. 

Follow the steps below to buy Bitcoin with eToro:

  • ✅Step 1: Open an Account: You will first need to register an account with eToro. This requires you to enter some personal information and contact details, and upload a copy of your ID.  
  • 💳Step 2: Deposit Funds: US clients can deposit funds into their eToro account fee-free and from a minimum of just $10. Choose from an online bank transfer, Paypal, debit/credit card, or ACH. 
  • 🔎Step 3: Search for Bitcoin: In addition to cryptocurrencies, eToro hosts thousands of other financial instruments. As such, the easiest way to invest in Bitcoin is to enter ‘BTC’ into the search bar and click on ‘Trade’. 
  • 🛒Step 4: Invest in Bitcoin: You will now see an order box appear – simply enter the amount of money you would like to invest in Bitcoin and click on ‘Open Trade’ to confirm.

By following the quickfire guide above, you have just learned how to buy Bitcoin with an SEC-regulated broker in less than 10 minutes.

Keep on reading should you require a more in-depth walkthrough of the investment process.

Where to Invest in Bitcoin

It is important to assess the best place to invest in Bitcoin for your personal requirements. 

For instance, some platforms are geared towards beginners, while others are more suited for large-scale investors that seek high-level trading tools. 

With this in mind, when thinking about where to invest in Bitcoin – consider the selection of pre-vetted brokers reviewed below. 

1. eToro – Overall Best Place to Invest in Bitcoin 2022

We used eToro as our example broker in the quickfire guide above, not least because this is the overall best place to invest in Bitcoin and buy cryptocurrency. Put simply, you can open a verified account in minutes at eToro and you only need to risk $10 to invest in Bitcoin in a safe and secure manner. 

Payment types accepted at eToro include debit/credit cards issued by Visa and MasterCard, e-wallets like Paypal and Neteller, and traditional bank transfers. So whether you want to buy Bitcoin with PayPal, bank transfer, or any other method, the choice is yours.

Moreover, if you’re from the US, you won’t pay any deposit or withdrawal fees – regardless of which payment method you opt for. Once your account is funded in US dollars, eToro then allows you to invest in Bitcoin on a spread-only basis (from 0.75%). 

etoro reviewThis means that instead of paying a variable commission, you simply need to cover the gap between the buy and sell price. eToro is also useful if you are looking to invest in alternative cryptocurrencies – with the broker supporting over 45+ digital tokens. Hence, you can buy Solana, Dogecoin, Ethereum, Polkadot, the Graph, and more with the click of a button. You can also invest in stocks, ETFs, commodities, indices, and forex. If you’re strapped for time or have little to no experience in the investment space – you might also consider the eToro Copy Trading tool. 

This allows you to select an experienced trader that you like the look of and then copy their ongoing investments. This comes at no additional fee and requires a minimum outlay of just $200. You can also invest in a pre-made basket of cryptocurrencies via the CryptoPortfolio tool – which is professionally managed and rebalanced by the eToro team. 

eToro copy trader

When it comes to safety, eToro is regulated on multiple fronts. This is inclusive of the SEC (with FINRA membership), FCA, ASIC, and CySEC. The platform is home to over 23 million clients from around the world – and it’s planning to go public later this year. Finally, if you want to invest in Bitcoin via your smartphone, you can download the eToro app and use the eToro crypto credit card to conveniently spend your crypto holdings as and when you want.    

Invest in Bitcoin on eToro Now

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

2. Webull – Invest in Cryptocurrency With Just $1 

webull logoThe process of investing in Bitcoin doesn’t require a large capital outlay when you use an online broker like Webull. Not only does the user-friendly platform allow you to open an account without meeting a minimum deposit – but you can invest in Bitcoin from just $1 upwards. 

And as such, this will suit first-timers that wish to test the Bitcoin markets out before risking higher sums. At Webull, this $1 minimum extends to all of the other cryptocurrencies supported on the platform – which includes everything from Shiba Inu, Dogecoin, and Litecoin to Ethereum, Chainlink, and Basic Attention Token. Moreover, Webull supports other asset classes on its platform – such as US-listed stocks, ETFs, and options. 

webull platform screenshot

Although Webull is typically used by casual traders, the platform does offer a selection of advanced tools and features that will appeal to seasoned investors. This includes no less than 12 charting tools and 50+ technical indicators. In terms of fees, you can invest in Bitcoin – and any other supported financial instrument, at 0% commission. No deposit fees apply on ACH transactions, but bank wires are charged at $8.      

Invest in Bitcoin on Webull

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

3. Binance – Invest in Bitcoin and 60+ Other Cryptocurrencies 

binance logoThe Binance US platform enables Americans to invest in Bitcoin and 60+ other supported cryptocurrencies. As such, this is a good option if you are planning to create a diversified portfolio of digital currencies. Some of the most popular tokens available in addition to Bitcoin include Ethereum, Litecoin, Dogecoin, and Cardano. 

Binance US also supports a wave of DeFi (Decentralized Finance) tokens – which includes the likes of Chainlink and VeChain. In terms of paying for your Bitcoin investment, the fees will depend on the payment method that you opt for. For instance, if you prefer the convenience of using a debit or credit card, this will set you back 4.5% in transaction fees – in addition to a 0.5% commission. Alternatively, ACH and domestic wire transfer deposits are free – so it’s just the 0.5% commission that you will pay.

If you decide to use Binance to exchange digital tokens – for instance, Bitcoin to Ethereum or Cardano to Litecoin, then the commission stands at just 0.1% per slide. Moreover, if you trade large volumes, this commission is lowered even further. To open an account at Binance, you will need to upload some ID. After that, you can proceed to invest in Bitcoin at the click of a button. Finally, Binance also offers educational materials and OTC services.

Invest in Bitcoin on Binance

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

4. Coinbase – Invest in Bitcoin via a Beginner-Friendly Platform   

coinbase logoThe next broker to consider when thinking about where to invest in Bitcoin is Coinbase. This NASDAQ-listed cryptocurrency broker is now used by tens of millions of clients – many of which are based in the US. The platform offers a safe and convenient way to invest in Bitcoin and dozens of other cryptocurrencies – so it’s ideal for beginners. 

However, irrespective of how you intend on paying for your Bitcoin investment, Coinbase is a lot more expensive than the other brokers discussed thus far. For example, if you deposit funds via ACH and proceed to invest in Bitcoin once the money arrives – this will cost you 1.5% in fees. Paying for your Bitcoin investment instantly with a debit/credit card will set you back 3.99%.    

coinbase platform screenshot

Taking this into account, fee-conscious investors might be better off using eToro. Nevertheless, Coinbase also stands out for its commitment to security. Among many other safeguards, 98% of client funds are kept offline in cold storage and all account users must set up two-factor authentication. Furthermore, you can place a 48-hour time lock on withdrawal requests, which ensures that you have sufficient time to act should your account become compromised.    

Invest in Bitcoin on Coinbase

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

5. Kraken Pro – Invest in Bitcoin via an Advanced Trading Suite 

If you’re an active trader that is looking to gain exposure to Bitcoin via sophisticated tools, Kraken Pro could be the best option for your skillset. This top-rated cryptocurrency exchange was launched way back in 2011 – which makes it one of the most established in this space. US clients can deposit funds only with a domestic bank wire or crypto. ACH payments are only accepted when making a withdrawal.  

With regards to the Kraken Pro platform itself, you will find a large suite of advanced order types and charting tools. The latter includes the ability to draw trend lines and overlays, as well as access technical indicators. In terms of trading fees, Kraken Pro charges market makers and takers 0.16% and 0.26% respectively. Lowers commissions are offered when trading volumes hit certain milestones, starting from $50,000 within a 30-day period.  

Invest in Bitcoin on Kraken

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

Should I Invest in Bitcoin?

Once you have decided which online broker is a good fit for your trading goals and skill set, it’s time to do some independent research. 

By this, we mean diving deep into whether or not a Bitcoin investment is right for your portfolio. 

To help clear the mist, below we discuss five key reasons why you might choose to invest in Bitcoin right now.  

Bitcoin is Still an Emerging Asset Class

Many market commentators argue that Bitcoin in 2022 is the Apple or Microsoft of the 1980s. In other words, when you consider that Bitcoin was launched as recently as 2009, the concept of cryptocurrencies and blockchain technology is still in its infancy. 

And as such, by investing in Bitcoin today, you have the opportunity to gain exposure to an emerging asset class that is yet to reach its full potential.  

Bitcoin Growth Since 2009

Although Bitcoin was launched in January 2009, it wasn’t until February 2011 that the digital currency surpassed a value of $1 per token. Moreover, it took a further two years for Bitcoin to hit $1,000. 

Fast forward to late 2021, and Bitcoin reached an all-time high value of nearly $69,000. When comparing this to the price of Bitcoin in 2011, this translates into 10-year returns of over 6.8 million percent. 

In other words, if you invested $1,000 into Bitcoin back in 2011 and sold when the digital currency hit $69,000 per token, you would have cashed out more than $68 million. This highlights just how well Bitcoin has performed in such a short period of time. 

Bitcoin vs Stock Markets

One of the best ways to assess whether or not an alternative asset class like Bitcoin is worth buying is to compare its performance against the broader stock markets. For this purpose, a great benchmark is the S&P 500 index. 

  • Over the past five years, the S&P 500 has grown by approximately 94% – which illustrates attractive returns. 
  • However, over the same period, Bitcoin has grown by over 3,500% – which dwarfs that of the S&P 500.

Crucially, it is important to note that your investment portfolio should remain well diversified. As such, if you choose to invest in Bitcoin, it’s also worth allocating some funds to the traditional stock markets – and perhaps, bonds too.  

Digital Gold

Bitcoin is often referred to as the digital version of gold, not least because the two asset classes carry a number of similar characteristics. For instance, there is a finite quantity of gold, meaning that once the Earth’s entire supply is mined, nothing more can enter circulation. 

  • Similarly, Bitcoin is also finite, as only 21 million tokens will ever be created. Furthermore, just like gold, the circulating supply increases at steady intervals. 
  • In the case of Bitcoin, this happens every 10 minutes, albeit, every four years or so, the amount minted per block is halved. 

Another characteristic that both Bitcoin and gold share is that both asset classes are viewed as a hedge against the broader financial markets. More specifically, when the inflation levels are rising and the stock markets are down, Bitcoin and gold offer attractive hedging opportunities. 

Easy to Invest and Highly Liquid

First-time Bitcoin investors are often concerned that the process of buying the digital currency is complex. Moreover, there is also a misconception that there are barriers when it comes to cashing out. However, this couldn’t be further from the truth. 

First and foremost, anyone can invest in Bitcoin from the comfort of home in a matter of minutes with a debit/credit card or bank transfer. This can be achieved safely and conveniently via an SEC-regulated cryptocurrency broker. 

Second, Bitcoin operates in a multi-trillion dollar cryptocurrency trading industry that never sleeps. As such, 24 hours per day, 7 days per week – you can easily cash out your Bitcoin investment back to US dollars through your chosen online broker. 

What is the Best Way to Invest in Bitcoin?

There are essentially two ways to invest in Bitcoin in 2022. 

You can either buy BTC tokens via an online exchange or broker, or invest in stocks that offer direct exposure to the digital currency. 

Having said this you could also gain exposure to the crypto market via crypto CFDs. For example, if you opened an account with the leading crypto bot Bitcoin Prime, you could speculate on the price movements of BTC crosses via contracts for difference. Moreover, the best part about using a crypto robot is that it does all the work for based on criteria and parameters that you configure.

Buying Bitcoin

It goes without saying that the easiest way to invest in Bitcoin is to simply open an account with an online broker and purchase some tokens. 

In doing so, you will retain full ownership of your digital assets until you are ready to cash out. And, your profits or losses will directly correlate with the market price of Bitcoin. 

That is to say, if you invested $500 into Bitcoin and its value subsequently increases by 25%, you make a profit of $125. 

Investing in Bitcoin Stocks

The other option is to buy some stocks that correlate to the Bitcoin market. If you’re wondering how to invest in Bitcoin stocks, the best option is to look at Coinbase.

Buy Bitcoin StockAs mentioned earlier, Coinbase is a large US-based cryptocurrency broker that is publicly listed on the NASDAQ. In theory, when the value of Bitcoin and the wider cryptocurrency markets are in an upward trend, this should have a positive effect on Coinbase stocks. 

However, the correlation will never be like-for-like. After all, there are many other variables to take into account when you buy stocks – such as the company’s balance sheet, quarterly earnings, debt levels, and more. 

Once again, this is why buying Bitcoin is the best way to invest in the digital asset. 

Invest in Bitcoin vs Trading Bitcoin

Another thing to consider when learning how to invest in Bitcoin is the specific trading strategy that you adopt. 

For example, more experienced investors will often look to time the markets – which means actively placing trades. 

This means that the investor might invest in Bitcoin when the markets are overly strong, and offload when it appears that the upward trend is beginning to reverse. Then, they might wait for the markets to correct before once again entering a new position. 

On the other hand, beginners will be better suited to a longer-term investment strategy. In most cases, this will see you invest in Bitcoin and then keep hold of your digital assets for several months or years.

This option means that you can spend less time researching the markets and watching over the value of your position. Instead, you can sit back and ‘HODL’ until you feel it is the right time to sell. 

Note: The term ‘HODL’ is a play on the word ‘hold’. In Bitcoin jargon, this simply means holding onto your investment in the long run – and not selling when the markets go through short-term pricing spikes. 

How Much to Invest in Bitcoin

Irrespective of which asset class you are investing in – it is important to have a clear plan in terms of stakes. By this, we mean thinking about how much money you can realistically afford to lose when investing in Bitcoin – based on your budget and tolerance for risk. 

  • For example, although Bitcoin is a highly liquid asset – which means that you can cash out at any given time, it is also highly volatile and speculative. 
  • This means that should you need to cash out your Bitcoin tokens to fund an emergency expense – you might get back less than you originally invested. 
  • This is why you should only invest amounts that you are comfortable with. 

Another thing to note is that you should avoid going ‘all-in’ when investing in Bitcoin. Instead, your portfolio should contain a much larger percentage of traditional asset classes – such as index funds, ETFs, and blue-chip stocks. 

This will help balance out the risks involved with Bitcoin – and ensure that you are not overexposed to a single asset. 

Moreover, and as we cover in more detail shortly, instead of investing a lump sum into Bitcoin – it’s best to inject small but regular amounts via a dollar-cost average strategy. 

Choosing a Bitcoin Wallet for Investing

Another aspect that often puts newbies off from investing in Bitcoin are the steps involved in keeping the digital tokens safe. This is because Bitcoin – like all other cryptocurrencies, is stored in a ‘wallet’. 

  • These Bitcoin wallets often come in the form of a mobile app, albeit, desktop software, hardware devices, and online storage options also exist. 
  • Regardless of the wallet type you elect to use when storing your Bitcoin tokens, it is crucial that you adopt a range of security procedures. 
  • This includes never giving out your private keys, setting up two-factor authentication (if offered by the wallet), and sticking with reputable and trusted providers. 
  • After all, if the worst happens and your wallet is compromised, then there is every chance that your Bitcoin funds will be stolen. 

If this does happen, you will have nowhere to turn. This is why we suggest considering SEC-regulated broker eToro for your Bitcoin storage requirements. 

This is because once you invest in Bitcoin via the eToro website, the tokens will be safeguarded by eToro’s institutional-grade security tools. 

This means that you don’t need to worry about learning the ropes of wallet security tools and risks, as the tokens will be kept safe by eToro until you decide to cash out.  

Bitcoin Investment Strategies

Seasoned traders will never invest in Bitcoin without first having a pre-defined strategy in place. 

There are many Bitcoin investment strategies to consider, albeit, the one that you opt for will typically depend on your financial goals and how much risk you are willing to take. 

With this in mind, when learning how to invest in Bitcoin – consider some of the strategies discussed below. 

Dollar-Cost Average to Avoid Volatility

We mentioned earlier that Bitcoin can be an extremely volatile asset class at times. As a newbie investor, this can be intimidating. 

  • For example, in mid-2021, Bitcoin went from highs of $61,000 to lows of $31,000 in the space of just a few months. 
  • However, just a few months later, Bitcoin then hit all-time highs of almost $69,000. 

Crucially, this emotional rollercoaster ride can be mitigated by dollar-cost averaging your investments. 

This simply means investing smaller amounts at regular intervals. For instance, you might elect to invest $100 per month – regardless of how Bitcoin is performing. 

In doing so, you will average out your break-even point on each investment. If adopting this Bitcoin investment strategy, it’s best to use a broker that supports small stakes. 

At eToro, for instance, you only need to meet a $10 minimum. As such, by depositing $120, you can invest $10 per month for an entire year. 

Stay Safe With SEC-Regulated Bitcoin Brokers

The next strategy to adopt when learning how to invest in Bitcoin is to ensure that you only make purchases from a trusted broker that takes security and regulation seriously. 

You can do this with ease by sticking with Bitcoin brokers that are authorized and regulated by the SEC. 

The alternative to this is to use an unlicensed cryptocurrency exchange that offers nothing in the way of regulatory protection. 

Although such exchanges might offer super-low fees and an assortment of features, you can never be certain that your Bitcoin funds are in safe hands.  

Have an Investment Target in Place

Another strategy to consider using when investing in Bitcoin is to have clear targets in place. 

  • For example, let’s suppose that you want to make gains of 75% from your Bitcoin investment. 
  • If you invest when the price of Bitcoin is $40,000 – this means that the digital currency needs to exceed a value of $70,000 per token. 

If and when your target is met, you can then elect to sell your Bitcoin tokens back to cash. The most effective way of deploying a target Bitcoin price is via a take-profit order.  

For those unaware, take-profit orders – which are available at platforms like eToro and Binance, allow you to specify an exact price that you wish to sell your investment. 

When this price is triggered by the markets (for example, $70,000), your chosen broker will automatically close your position. 

In addition to take-profits, it is also worth considering a stop-loss order when you invest in Bitcoin. This works in the same way as a take-profit but in reverse.

  • For instance, you might decide that the most you are prepared to lose from your Bitcoin investment is 20%. 
  • If the price of Bitcoin stands at $40,000 at the time of the investment, you would need to set your stop-loss at $32,000. 
  • If the specified price is triggered, then the broker will automatically close your position. 

Ultimately, by placing both take-profits and stop-losses, this means that you don’t need to constantly check the price of Bitcoin, as your chosen broker will close your trade when one of your orders is triggered.   

How to Invest in Bitcoin & Make Money – Example

If you’re wondering how to make money from a Bitcoin investment, this section of our beginner’s guide will explain the process with some simple examples. 

Fractional Investment 

The first thing to mention is that unless you are looking to invest thousands of dollars to purchase a single Bitcoin, you will be buying a fraction of one token. 

The good news is that the returns on your investment will work out in exactly the same way as buying a full Bitcoin. 

Buy BTC via fractional trading

For example:

  • Let’s suppose that you want to invest in Bitcoin when the digital asset is priced at $45,000
  • You decide to invest a total of $450
  • This means that you are buying 1% of a single Bitcoin token – or 0.01 units. 
  • We’ll then say that a few months later, Bitcoin is priced at $53,500 – or 30% higher
  • On your stake of $450, this means that your investment is now worth $585

As per the above, it doesn’t matter if you own a full Bitcoin or just a tiny fraction of one token – your gains and losses will be determined by the percentage amount that the digital asset increases or decreases.

Long-Term Buy and Hold Strategy 

In this example of how to make money by investing in Bitcoin, we’ll look at what returns you would have made had you entered the market five years ago. 

  • In the five years prior to writing this guide, Bitcoin was priced at just over $1,000 per token
  • We’ll say that you decided to invest a total of $5,000 at this entry price
  • As of writing, Bitcoin is trading around the $42,000 level
  • This translates into 5-year returns of over 4,000%

In the above example, you invested $5,000 five years ago and you are now looking at returns of 4,000%. And as such, if you were to cash out, you would receive over $200,000. For more details on the best long term crypto investments be sure to read our full guide.   

Short-Term Strategy 

Now let’s look at a real-world example of how a short-term Bitcoin trade might pan out. 

  • Let’s say that you invested $2,000 into Bitcoin in mid-July 2021 – when the digital token was priced at just over $30,000
  • Just three months later, Bitcoin was priced at $64,000 per token
  • This represents growth of approximately 110%
  • As such, you decide to cash out your investment

As per the above, in the space of just three months, you made a 110% profit on a $2,000 Bitcoin investment. Therefore, your total cash-out amount would have stood at $4,200. 

When is the Best Time to Invest in Bitcoin? 

When is the best time to buy Bitcoin

Unless you are a seasoned investor with a firm understanding of technical analysis and high-level research, there is no value in attempting to time the market. 

On the contrary, instead of trying to invest in Bitcoin at the right time – the previously discussed dollar-cost averaging strategy will be a lot more effective. 

This is because you will be investing in Bitcoin in the long run by allocating smaller amounts to the digital token – but at regular intervals. 

And as such, you do not need to worry about whether or not you have timed the market correctly – as each investment will be averaged out. 

How to Invest in Bitcoin  – Tutorial 

This section of our guide will explain how to invest in Bitcoin via SEC-regulated broker eToro. 

You will learn how to open a verified account, deposit funds, and place an investment order in less than 10 minutes.   

Step 1: Open an Account 

The first step is to visit the eToro website and click on the ‘Join Now’ button – which you will find at the top of the homepage. A registration form will then appear on your screen. 

Initially, you will need to enter your first and last name, email address, cell phone number, and a chosen username and password.

Next, you’ll need to provide some additional personal details – such as your date of birth and home address.            

Finally, to complete the registration process, you will need to verify your cell phone number by entering the SMS code that eToro sends to you.  

Step 2: Identity Verification 

In less than 1-2 minutes, you can verify your eToro account by uploading some ID. This will increase your deposit limits and make you eligible to request withdrawals.  

To get verified, you can upload a copy of your driver’s license, passport, or state-issued ID. To prove your residency status, upload a recently issued bank statement or electricity/water bill. 

Step 3: Make a Deposit 

If you are depositing funds in US dollars, then no fees apply. At eToro, you can choose from a debit/credit card or an e-wallet to have your deposit processed instantly. 

If you’re happy to wait 1-3 working days, ACH and bank wire transfers are also supported. The minimum deposit at eToro for US clients is just $10. 

Step 4: Search for Bitcoin 

You should now have a verified eToro account with at least $10 in funds. If so, you can invest in Bitcoin. 

search for btc on etoro

To go straight to the correct investment page, use the search bar by entering ‘BTC’ and clicking on ‘Trade’.  

Step 5: Invest in Bitcoin 

An order box will now appear on your trading screen. This is where you need to let eToro know how much money you want to invest in Bitcoin.  

Buy BTC on eToro

This can be any amount from $10, albeit, in the example above, we are investing a total of $50. Finally, once you click on the ‘Open Trade’ button, eToro will carry out your Bitcoin investment instantly.    

Step 6: How to Sell Bitcoin 

You can keep track of your Bitcoin investment by heading over to your eToro portfolio. At any given time, you can elect to sell your Bitcoin investment.  

Just look out for the cog button next to Bitcoin, and click on ‘Close’. eToro will then sell your Bitcoin tokens back to US dollars at the best available price. 

Conclusion 

This guide has explained the importance of researching the markets and considering the risks involved before investing in Bitcoin. 

We’ve also reviewed the best Bitcoin brokers and exchanges to consider, and which strategies are worth adopting. 

If you want to invest in Bitcoin right now – it takes just 10 minutes to open an account and place your order at SEC-regulated broker eToro. 

Invest in Bitcoin on eToro

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

Frequently Asked Questions When Investing in Bitcoin

Is Bitcoin a good investment in 2022?

Bitcoin has outperformed the traditional stock markets by a considerable amount since the digital currency was launched in 2009. You should, however, go easy with your stakes if you choose to invest in Bitcoin, as this asset class is highly volatile.

Can I invest in Bitcoin with $1?

Yes, you can invest in Bitcoin with just $1 via Webull. However, the spread on Bitcoin markets at Webull is often uncompetitive. As such, you might consider eToro instead, which requires a slightly higher minimum of $10.

How do I invest in Bitcoin?

You can invest in Bitcoin by opening an account and depositing funds with a trusted cryptocurrency broker like eToro.

What is the minimum to invest in Bitcoin?

Bitcoin can be divided by up to 8 decimal places, so super-small investments are possible. However, the minimum amount that you can stake on Bitcoin will depend on which broker you decide to use.

How much should I invest in Bitcoin?

This will depend on your budget and how much risk you are comfortable taking. Crucially, never invest more than you can afford to lose.

What is the best site to invest in Bitcoin?

eToro is arguably the best site to invest in Bitcoin – as US clients benefit from free debit/credit card and e-wallet deposits, alongside a minimum stake of just $10. Moreover, eToro is licensed by the SEC.

If I invest $100 in Bitcoin today in 2022 how much is it worth in 2023?

Bitcoin operates in a speculative and volatile marketplace, so predicting its value in 2023 is a challenging task.

What is the best way to invest in Bitcoin?

The best way to invest in Bitcoin is via an SEC-regulated broker like eToro.

Is it too late to invest in Bitcoin?

Bitcoin has only been a tradable asset since 2009. As such, Bitcoin is still in its infancy.

Should I invest in Bitcoin or Ethereum?

If you can’t decide between Bitcoin or Ethereum, it could be worth diversifying across both digital currencies.

Should you invest in Bitcoin?

You should only invest in Bitcoin if you have performed your own research and considered the risks.


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Author: Kane Pepi

Kane Pepi is an experienced financial and cryptocurrency writer with over 2,000+ published articles, guides, and market insights in the public domain. Expert niche subjects include asset valuation and analysis, portfolio management, and the prevention of financial crime. Kane is particularly skilled in explaining complex financial topics in a user-friendly… View full profile ›

Источник: [https://torrent-igruha.org/3551-portal.html]

Is There a Right Way to Invest in Bitcoin in 2022? Yes.

You’ve read stories about celebrities, like Elon Musk and Mark Cuban, who supposedly are cashing in on Bitcoin. You’ve seen ads for companies that claim to offer a “safe and easy way” to buy it. You probably even know a few people who have dabbled in it.

But beyond the frothy headlines and its reputation as the Wild West of the monetary marketplace, crypto is slowly emerging as a viable element of many people’s long-term investment strategies. More than one in five investors with assets between $250K to $2.5M+ said they have 6% to less than 10% of their total investments in Bitcoin and crypto, according to a new survey by Wealthramp. This is even higher among Millennials, with 43% of this investor age group owning up to 10% in digital currencies.

The first thing to ask before jumping on the crypto bandwagon is, most importantly, why do you want to invest in it?

Some people own Bitcoin as a way to make a political statement. Or maybe it’s because you believe you can make a decent profit if you buy it right now.  A big attraction to owning cryptocurrencies is just the fact they are new and exciting investment opportunities.

If these are your reasons, then you might want to get your feet wet as a crypto dabbler. Open an account with an online crypto exchange and fund it with “fun money” you can afford to lose.

But if you’re really serious about treating crypto as a real investment, you’ll want to understand what makes it unique.

How does Bitcoin work?

Bitcoin, Ethereum and other cryptocurrencies are real in the same way that a digital image or video is real. Yes, they only exist in cyberspace, but then again, so does this article.

Two factors make cryptocurrency different from other kinds of currencies.

  • First, because it takes a huge amount of computing power to create crypto, there is a finite supply available to consumers. The more people who want to own a share of the crypto pie, the higher the price rises.
  • Second, crypto isn’t “backed” by the full faith and credit of a government. That’s why it has a great appeal among people who are opposed to government regulations. However, the flipside of this lack of oversight is a lack of formal protections for consumers.

In many ways, investing in crypto is like investing in baseball cards or Beanie Babies, in that their value only reflects consumers’ ever-changing sentiments about their collectability.  While some cryptos do have value in terms of the transactional processes they enable, price swings in general are driven solely by supply and demand. And like most investments, those who get in and out first tend to profit the most.

So, what makes cryptocurrency something more than a digital Ponzi scheme? The blockchain. Without getting into details, blockchain is a groundbreaking open-source cyber-technology that records every single cryptocurrency transaction in a way that can’t be deleted or altered. 

When you buy into Bitcoin, your purchase will be recorded on the blockchain (but your privacy will be protected). As the blockchain becomes more widely used for mainstream transactional purposes, the more likely bitcoin and other cryptos will play a role in serving as the monetary tokens for these exchanges. 

Is Bitcoin safe to buy?

While you can use Robinhood and other online brokers apps to trade crypto directly, none of the established discount brokers like Fidelity and Schwab let you do it — with them you can only invest in crypto futures or ETFs that invest in crypto futures. 

Today, most people buy and sell crypto directly using crypto exchanges like Coinbase. But it’s important to understand that, unlike banks and brokers, currency exchanges aren’t legally required by the FDIC, FINRA or the SEC to guarantee the full return of crypto stolen from your account, although most do carry crime insurance to protect a portion of digital assets they hold in storage. This is worth considering, since in 2020 alone, hackers stole $3.8 billion in crypto in 122 separate attacks, a third of which were aimed directly at blockchain users. Between March and May of 2021, hackers stole crypto from more than 6,000 Coinbase accounts. Around the world, dozens of hacked crypto exchanges have gone bankrupt after losing everything to cybertheft and embezzlement, leaving consumers with little or no resource.

Could this happen in the U.S.? Time will tell. Knowing all these risks, if you still believe in the long-term investment potential of crypto, then your next step is to figure out how to use it responsibly.

Is your crypto strategy a hedge for inflation or a sideways stock market?

It’s important to understand the impact even a small allocation to crypto may have on your overall investment strategy. While it adds a degree of diversification beyond stocks and bonds, it’s not a risk mediator. Why? Because crypto is inherently volatile. Its huge price swings are driven solely by fear and greed, rather than by quantifiable business, economic or geopolitical factors.

And once you decide to add it, how do you choose among the hundreds of cryptos out there? Unlike stocks or bonds, there’s no formal research available to help you figure out which digital currency offers the best “bank for your buck.”

That’s why if you’re serious about crypto as a long-term strategic investment, you may want to work with a qualified fee-only fiduciary financial adviser who has expertise with digital currencies.

Not only will such an adviser have access to research that makes evaluating cryptos something more than a wild guess, but they also have sophisticated financial modeling tools that can hypothetically illustrate its potential long-term impact on your portfolio under various return scenarios. Keep in mind that none of these models can in any way predict future results.

If you really want to invest in crypto, most financial advisers who have knowledge of crypto recommend that it comprise no more than 5% of your portfolio. And that’s only if you have a long time horizon (20 years or more) and a moderate to high appetite for risk. (For more, please read How Much Bitcoin Should I Own? A Mathematical Answer.)

Future of cryptocurrency in 2022 and beyond

Since at the moment crypto isn’t regulated by the SEC or FINRA, advisers can’t use institutional brokerage and custodial platforms to purchase and hold it on your behalf. That’s why most simply offer guidance to clients on how to make their own self-directed crypto purchases.

However, some fee-only financial advisers are test-driving the first generation of applications that do enable them to purchase and manage crypto for their clients. Once the SEC and FINRA finalize the rules of the road for crypto investing, we should see a stampede by Fidelity, Schwab and other custodians to add crypto trading to their platforms. This will be critical, since one of the key responsibilities of advisers will be to constantly monitor crypto values and rebalance portfolios when price swings push crypto allocations out of their target ranges.

Crypto isn’t a passing fad. It’s here to stay, and crypto investing will eventually be regulated to offer the same level of protection for consumers as investments in securities, mutual funds and ETFs.

If you’re considering making a substantial investment in crypto right now, it is  worth your time to work with a qualified fee-only financial adviser who can help you figure out how to harness its potential in a thoughtful and responsible way.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Pam Krueger

Founder, Wealthramp

With more than 25 years in investor advocacy, Pam Krueger is the founder and CEO of Wealthramp, an SEC-registered adviser matching platform that connects consumers with rigorously vetted and qualified fee-only financial advisers. She is also the creator and co-host of the award-winning MoneyTrack investor-education TV series, seen nationally on PBS, and Friends Talk Money podcast.

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How to Invest in Bitcoin Safely for Beginners 2022

How-to-Invest-in-Bitcoin-Safely-for-Beginners-2022


Due to the exponential growth of the cryptocurrency market in the last few years, more people than ever are looking to invest in Bitcoin to potentially generate market-beating returns.


This article will discuss how to invest in Bitcoinin detail, reviewing the top trading platformsin the market and highlighting how you can make your Bitcoin investment today – with tight spreads and no hidden fees!

How to Invest in Bitcoin - Quick Steps

Investing in Bitcoin doesn’t have to be complicated. Found below are the four quick steps you need to take in order to buy Bitcoin with our recommended trading platform, eToro.

  1. Open an account with eToro – Head to eToro’s homepage and click ‘Join Now’ to sign up. Your capital is at risk.
  2. Deposit – Deposit at least $10 into your trading account using a credit/debit card, bank transfer, or e-wallet.
  3. Search for Bitcoin – Type ‘BTC’ or ‘Bitcoin’ into the search bar at the top of your screen and click ‘Trade’.
  4. Invest – Enter the amount you’d like to invest in Bitcoin (minimum of $10), double-check everything is correct, and click ‘Open Trade’.
Where to Invest in Bitcoin

We’ve identified the two best and safest platforms to make your first bitcoin investment.

1. eToro – Overall Best Broker to Invest in Bitcoin Safely

Our recommended trading platform for traders looking to invest in Bitcoin is eToro. eToro exchange has a stellar reputation worldwide, boasting over 23 million registered users and operating in over 100 countries. One of the most appealing aspects of the eToro platform is that it is regulated by multiple top-tier entities, including the FCA, ASIC, CySEC, SEC, FINRA – and is licensed by the FSCS in the UK.

When trading Bitcoin, eToro doesn't charge a transaction fee when you open or close a trade. Instead, the platform employs a spread-based structure quoted at only 0.75% for BTC trading. The great thing about eToro is that when you trade crypto, you will gain complete ownership of the underlying crypto asset. Furthermore, eToro charges no deposit or monthly account fees, making the trading process very cost-effective.

How-to-Invest-in-Bitcoin-Safely-for-Beginners-2022-1


Users can make deposits from as little as $10, and eToro accepts a range of payment options, including credit/debit cards, bank transfers, and e-wallets – including PayPal, Skrill, and Neteller.

Finally, eTororeally excels when it comes to trading features and offers a unique 'CopyPortfolio' feature for all traders. This allows users to invest in a professionally managed portfolio without paying any hefty management fees. eToro even offers a 'CryptoPortfolio', which comprises many major digital currencies – allowing for exposure to price movements in the broader crypto market!

Invest in Bitcoin on eToro.

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

2. Binance – Best Bitcoin Investment Platform with Huge Asset Selection

Another option if you’re looking to invest in Bitcoin is Binance. According to CoinMarketCap, Binance is the world’s largest cryptocurrency exchange, conducting over $22.6bn in trading volume during the last 24 hours. Binance stands apart from many of its competitors in the space thanks to its vast asset selection, as users can trade on over 500 crypto assets – including altcoins, ERC-20 tokens, and even crypto-crypto trading pairs.

Binance’s fees are some of the lowest in the industry, as the platform only charges a 0.1% maker/taker fee. However, if you hold any BNB in your trading balance (Binance’s native cryptocurrency), you can reduce these fees by 25% - meaning it’ll be only 0.075% per trade! When it comes to deposits, these are entirely free to make if funding your account in crypto or USD; however, if you’re looking to deposit in GBP or other currencies, there will be a small fee.

Invest in Bitcoin on Binance.

Your capital is at risk.

Should I invest in bitcoin?

Found below are three of the main reasons why traders and analysts believe Bitcoin is a good investment:

Great Store of Value

As reported by Reuters, Goldman Sachs analyst Zach Pandl recently stated that Bitcoin is set to compete with gold as a store of value. Pandl noted that BTC already has a 20% share of the ‘store of value’ market, with this percentage expected to grow even more in the years ahead.

Ultimately, this means that Bitcoin is expected to maintain its value in the future, whilst others may depreciate. Due to this attribute, investors tend to flock to stores of value during times of uncertainty, as they provide a good investment opportunity to store capital and maintain spending power.

Potential for High Returns

A quick glance at the BTC price chart will highlight the incredible returns that the coin has made during specific periods. For example, Bitcoin rose a staggering 1351% between March 2020 and April 2021 and even increased by 132% between July 2021 and November 2021.

How-to-Invest-in-Bitcoin-Safely-for-Beginners-2022-2


If you're familiar with the equity market, you'll know that returns such as these are sporadic. Thus, Bitcoin represents a great investment opportunity for those with a considerable risk appetite, as it can potentially generate returns that are larger than other asset classes.

Diversification Benefits

Finally, Bitcoin is an excellent addition to your portfolio if you want to increase diversification. An article by Suisse Goldfound that there was a great degree of inconsistency between the returns made in the crypto market and the returns generated from the S&P 500.

This finding highlights how good BTC could be for portfolio diversification, as when equities fall, there’s a good chance that Bitcoin’s price movements could balance out some of these losses. Ultimately this is ideal for investors looking to improve the risk-return profile of their portfolio.

What is the Best Way to Invest in Bitcoin?

Now that we’ve discussed the question ‘Is Bitcoin a good investment?’, let’s take a look at the investment process. Found below are two of the most popular ways that investors can gain exposure to BTC’s price movements in the market.

Buying Bitcoin

Understandably, the most popular way to gain exposure to Bitcoin is by buying the cryptocurrency itself. By purchasing BTC, you'll gain direct exposure to price movements. To provide an example of this, if you bought BTC when it was at $50,000, and it rose to $100,000 over the course of a year, you'll have made a 100% return on your investment!

How-to-Invest-in-Bitcoin-Safely-for-Beginners-2022-3


Obviously, this can work the other way too, as any price decreases after your purchase will result in a loss. However, buying Bitcoinis ideal if you're a speculative investor, as you'll own the underlying asset and can add to (or close out) your position whenever you like.

How to invest in bitcoin stock

Another option to consider is Bitcoin stocks. If you're wondering how to invest in Bitcoin stock, this refers to the process of purchasing shares of companies that have a relationship with BTC. Many companies meet this criterion, although Coinbase and Riot Blockchain are just two of the most popular.

How Much Should I Invest in Bitcoin?


A recent article by Timeinterviewed numerous top financial advisors and asked them how much they'd recommend investing in cryptocurrency. Their answers ranged from 1% of your portfolio to 2-5% of your net worth, depending on your risk appetite. As you can see, nobody is advocating for placing large amounts of your capital into cryptocurrency due to its inherent volatility, so it's wise to develop a strict trading plan that works for you and your investment goals. This view is compounded by the EconomyWatch article on investing in bitcoin.

Bitcoin Investment Numbers Explained

As you'll likely be aware, the process of making money when BTC trading will be based on the price you invested at and the price that you close your position at. Here's an example:

  • You invest $1000 in Bitcoin when the price is at $40,000
  • After one year, the price of Bitcoin rises to $100,000
  • You decide to close out your position and take your profits
  • As the price has increased from $40,000 to $100,000, which is a 150% increase, your investment amount will have also increased by 150%
  • Due to this, your $1000 will have turned into $2500!
It's worth noting that most brokers and exchanges will still charge the spread when you close out a trade, which will reduce profits somewhat. For example, if the spread was 0.50%, the price the broker closes your position at will be 0.50% lower than the market price – this can essentially be defined as the broker's 'cut'.

So there you have it, some of the soundest ways to invest in bitcoin. Proceed below to open an account.

Invest in Bitcoin

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection. Your capital is at risk. Additionally, 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Disclaimer:
The above content is non-editorial, and BCCL hereby disclaims any and all warranties, expressed or implied, relating to it, and does not guarantee, vouch for or necessarily endorse any of the content. Crypto/NFTs are unregulated, highly risky, and there may be no regulatory recourse for any loss from such transactions. Readers to exercise caution/due diligence, and comply with all applicable laws, including but not limited to taxation laws. Above content does not constitute investment advice nor promotes, suggests or presents Crypto/NFTs to solve financial difficulties/achieve financial security/act as an alternative to employment/income opportunity.

Disclaimer: Content Produced by CryptoPR

( Originally published on Jan 19, 2022 )

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bitcoin investing for beginners 2022

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