Bitcoin is one of the most fashionable investments of the century. Its value has appreciated by a little over 700,000% within ten years. Although bitcoin is the talk of the town, the buying process is still a mystery for many people. Investors who add bitcoin to their portfolios have different motives; some want to save for something while others are out for an adventure. However, irrespective of the reason behind the purchase, some standard rules apply for bitcoin investing.
1. Don’t Skip the KYC Process
Before buying or selling bitcoins, one must have a cryptocurrency exchange account. The process of acquiring the account requires the investor to fill in the Know Your Customer (KYC) forms. If the platform doesn’t request these documents, it might be a sign that they aren’t legit. One also needs a stable and secure internet connection as well as a method of payment. Standard methods of payment include debit cards, bank accounts, and credit cards. You may also access Bitcoin ATMs through P2P exchanges.
Privacy and security are critical issues for Bitcoin investors. Although they aren’t in a physical form, one should avoid bragging about having a significant investment. If a fraudster wants to steal from you, all they need is a private key to the public address, and they will authorize payments as they wish. Private keys are secretive assets and should be kept away from criminals who may access them. Since anyone can see your balance from the public addresses one uses, ensure you keep your significant investments in private addresses.
2. Take Care of Your Wallet
When you buy cryptocurrencies, you need to store them elsewhere. There are two options for doing this; light and heavy purses. The best tips for buying bitcoin are those involving the security of your money. If you choose to buy a “souvenir” amount of currency that doesn’t cost you a fortune, you can opt for a light purse since it is available on your phone. Before making the final decision, ensure that the wallet allows you to transfer the account to another device.
If you have a considerable amount of money at hand and would like to convert it to cryptocurrency, you should be very careful. Firstly, follow the instructions to allocate the necessary space on your hard drive for installing a full wallet. Since the option allows you to download all the coins to your PC, this is a very secure alternative. Avoid storing the coins on the exchanges if you will buy them because they are vulnerable to cyber-attacks.
3. Connect Your Exchange A Payment Option
After picking the suitable exchange, it’s time to gather your documents. The exchange you choose determines the forms you should present. In most cases, you need to give your social security number, a photo of your driver’s license, and your employer’s information. Sometimes the extent of details required varies depending on your region and the laws within the area. The procedure is a lot like setting up a brokerage account.
Once the exchange has verified your identity, you can proceed to connect it to a payment option. It’s advisable to avoid using credit cards because cryptocurrencies are very volatile. Although Bitcoin is a legal currency in the United States, some banks will prohibit its users from attaching their bank accounts to the exchange platform. Ensure your bank permits cryptocurrencies before linking the account.
4. Consider the Seller’s Reputation
Depending on the platform you choose, they will have an established rating system for the sellers. Some use a numerical rating system, while others mark credible sellers in green. A trustworthy seller should have positive feedback from previous buyers and have minimal negative ratings. Compare the ratio of positive to negative comments before settling on a seller. It’s also a good idea to go for a seller with an ID-verified status. This means that the site has confirmed the person’s background and documents.
5. Place an Order
After picking an exchange and connecting to a viable payment option, one can proceed to order Bitcoin. Cryptocurrencies are now considered mainstream investments, thus increasing their liquidity. The operation changes in these currencies are attributed to the evolving perception of Bitcoin. In the past, the industry was considered a scam, and its practices were highly questionable. Now, it has grown into a legitimate area and has attracted the interests of major players.
Cryptocurrency exchanges are almost at the same level as stock brokerage. After connecting the payment method, you are good to go. Crypto exchanges feature several order types and investment techniques. In addition, exchanges allow investors to set up recurring deposits into their currencies of choice. So, you can make this a consistent investment method.
6. Avoid Buying Bitcoin When It Is at the “Take-Off” Point
Many investors follow trends, which might result in huge losses. You may have read from a magazine or heard from your friends that the currency is doing well. However, do not rush immediately to find an exchange and make the transaction. Give the trend some time to settle before signing the deal. Most cryptocurrencies will go through a correlation or a substantial fall after a sharp rise. You might make more money by buying Bitcoin when it is at its lowest.
7. Avoid Breaking the Bank to Buy Cryptocurrency
You may have seen the stories of lucky investors who sold their houses or cars to buy Bitcoin and made millions later. Although these narrations seem enticing, there is a negative side to them. What if the trend doesn’t go as expected? Firstly, it’s not 2012, so buying a thousand bitcoins is not easy. Also, nobody knows how the market will trend tomorrow; all one can do is to speculate.
Profitable investments take a lot of dedication and monitoring. So don’t fall prey to all the rosy success stories and sell your assets to invest in cryptocurrencies. Spare some time to research the best strategy and follow through on what you think is best.
Some potential investors miss out on rare opportunities because of the jargon used when explaining the Bitcoin buying process. If you have given up on significant investment because of the complicated terms, it’s time to cut end the cycle. Now you know what it takes to invest in bitcoins.