Best Ways To Buy Bitcoin And What To Do With It

Pеoplе arе progrеssivеly dеvеloping an intеrеst in invеsting in cryptocurrеnciеs and hеncе thеrе is an incrеasе in dеmand for Bitcoin. Whеthеr somеonе is as nеw to Bitcoin as thеy arе to invеsting, or thеy arе alrеady involvеd in thе procеss of invеsting, it is important to know thе bеst ways of buying and invеsting in Bitcoin.

Six Best Ways To Buy Bitcoin

#1 Cryptocurrency Exchanges

One of the most widely spread and efficient ways to buy Bitcoin is a cryptocurrency exchange, which does not demand much effort.

Sites such as Coinbase, Kraken, Gemini Crypto, etc. provide easy-to-navigate platforms that enable both newbies and experienced traders to purchase Bitcoin safely. These platforms accept almost all forms of cryptocurrencies and are associated with multiple layers of security. However, fees differ; therefore, you should establish an exchange that will suit you.

#2 Traditional Stockbrokers

Other conventional stock traders like Robinhood, WeBull, TradeStation, and Fidelity also offer the possibility to purchase Bitcoin and other cryptos. These platforms are useful for individuals who are already used to conventional trading but seek to invest in cryptocurrencies. For the traders who intend to trade both stocks and Bitcoin, conventional brokers would be ideal if you were searching for an all-round trading platform.

#3 Bitcoin ATMs

Another easy way to do it is using Bitcoin ATMs which use cash or debit cards to purchase Bitcoins. It is further seen that these ATMs are available in retail storefronts; hence, buying Bitcoin is possible on the go. However, note that the cost of most Bitcoin ATMs is quite high; moreover, you need a digital wallet where you store your Bitcoin after buying it.

#4 Trusts and ETFs

For people who like a traditional approach to investing, trusts and ETFs are a good way of investing in Bitcoin without owning the asset. For example, ProShares has a Bitcoin ETF whilst Grayscale operates a Bitcoin trust fund. These investment assets enable investors to track Bitcoin price without directly holding or owning it giving investors an easy way to invest in it via a normal brokerage account.

#5 Peer-to-Peer Payment Apps

Another simple method that can be used is to buy Bitcoin with PayPal, Venmo, and CashApp. These are platforms that allow buying, storing, and selling of Bitcoin with a lot of ease. If you are already using these apps for your everyday business, they make it easy for you to get into the realm of Bitcoin.

#6 Wallet Software

It is also possible to purchase Bitcoin via numerous crypto wallet apps and software that are available in the market. Although this option is convenient, it is imperative to review the costs and the security of these applications. Some of these wallets may charge more for the transactions as compared to the exchanges and therefore it is good to look at the pros and cons of using them.

How to Ensure the Bitcoin You Bought is Secure

So, where do you keep your Bitcoin once you’ve purchased it? You can choose between two main types of wallets:

Hot Wallets

The hot wallets are the online ways through which you can get hold of your Bitcoin either through an application installed on your device or a website browser. They are relatively suitable for the purpose of holding short and intermediate-term assets and intense trading because you can easily access your money. However, you should know that hot wallets are relatively vulnerable to hacking attacks because they are online.

Cold Wallets

Contrary to hot wallets, cold wallets are offline devices that provide better security. These physical devices are like flash drives, they help to keep your Bitcoin off the internet making them not easily vulnerable to hackers’ attacks. Cold wallets are great for the long term, but they’re less responsive; also if you lose your device, you could lose all the Bitcoin you store in it.

What to Do After Buying Bitcoin

Once you own Bitcoin and store it, you can use it in various forms. Some individuals prefer day-trading Bitcoin and make their profits from the fluctuating market prices while others prefer to HODL. Whether you are an active trader or an investor with long-term positions, it is important to be aware of the current state of the market and make decisions that are consistent with your goals.

Trading: Day Trading and Long-Term Holding

If you are interested in getting massive profits within the shortest time possible then day trading is the right thing for you. It is basically the act of constantly purchasing and selling Bitcoins in the market for the purpose of profiting from short-term market fluctuations. On the other hand, if you have the conviction that Bitcoin will eventually gain acceptance and usage in the future then holding your Bitcoin investment for some time will enable you to earn good profits.

Tax Considerations

Remember that the purchase as well as the trading of Bitcoin attracts some taxes. So for instance, depending on your residence and profit, any amount you have earned could be subjected to CGT. So, to be on the safe side it is advisable to talk to a tax adviser so that you do not find yourself on the wrong side of the law.

Is Bitcoin a Hedge Against Inflation?

Many investors look at Bitcoin as an inflation hedge and believe that Bitcoin is a digital currency that can save them from the lower value of fiat currencies. As it is commonly described as “digital gold”, people remain skeptical to some degree regarding the effectiveness of Bitcoin as an inflation hedge in the long run due to its short history.

Final Thoughts

A brief introduction to the Bitcoin investment process can be thrilling but also a very dampening exercise. As strange as it may sound, the highs and lows of this relatively new market can go south in the blink of an eye, therefore effective decision-making when purchasing Bitcoins, selecting a wallet, and having a strategy in place should not be taken lightly. The trading volumes, accumulation for future use, or using averaging to diversify risks, require that one adopt caution and be informed.

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