If you are thinking of investing in Bitcoin, you have arrived at the right place because I have listed everything you need to know before making smart investments in Bitcoin in 2020. As we all know, the world is becoming more digital, with innovations and creativity taking place in technology every day. Everybody is reliable on the internet these days, so there is no surprise that Bitcoin has gained momentum among investors. Bitcoin is a digital currency based on blockchain technology open for everyone and provides an exciting opportunity to explore an entirely different class of assets. It might appear risky or scary to invest in Bitcoin at first. With the correct knowledge, time, and efforts, it becomes elementary to navigate this digital asset’s investment mechanism. You don’t need to be tech-savvy to understand the bitcoin game.
Have a look at these below-shared reasons why investing in bitcoin can be a great decision-
- Fast, easy, and confidential transactions.
- Individual ownership.
- Complete access to credit.
- Less transaction fee for international payments.
- No third-party involvement in the trades.
- Safe and secure ecosystem.
- It is regulated in multiple countries across the globe.
- Easy to access and use.
- Quick adjustments.
- Robust security.
Apart from these reasons mentioned above, there is one more reason for you to recognize bitcoins worth consideration. This digital currency is scarce and limited. As a result, the investment potential is impressive and can yield competitive returns in the future. Let’s take gold as an example to understand better. Gold is a limited resource and founded on a finite amount on earth. When new gold is mined, less of it is left for the future, and it becomes a more expensive and challenging process to find the new mines for extracting more gold. That is why this precious metal is viewed as a hedge against inflation.
The same goes true for bitcoins as well. Both gold and bitcoins are finite. “There will be only 21 million bitcoins to be ever made, and in the second quarter of 2020, there have been only 18.42 million bitcoins left in the world”. It is not possible to just arbitrarily create bitcoins out of nowhere. It requires effort to extract or mine them. So, as time will fly, it will become more difficult to mine them. The only difference between gold and bitcoins is that gold is mined from the natural habitat, whereas the bitcoins are mined through computational means.
You can look at the inflation and supply rate of Bitcoin below to better understand this digital asset:
Apart from being limited, bitcoins are very useful. The reasons have already been highlighted above, but there is more that this digital currency has to offer people. It is straightforward and flexible to transfer bitcoins from one part of the world to another without any banks’ interference to block or close users’ accounts. Bitcoins also act as a medium for people to escape the failed monetary policy of the government quickly. It also provides immense opportunities to all those economies that do not have a reliable banking infrastructure or services. We can keep going, but the prime question to discuss is- how an individual can start investing in bitcoins?
Let’s dive in and find out.
How to Get Started with investing in Bitcoins?
Select the exchange from where you can purchase the bitcoins
An individual can buy the bitcoins by signing up on an exchange. If a person is living in a country with an official bitcoin exchange, they are less likely to encounter problems while buying them. It is very easy and quick to sign-up on most of the cryptocurrency exchanges, and once you are done, you can purchase the bitcoins by transferring your funds from your bank account to the account made on the exchange/ platform.
Today, Coinbase is the largest Bitcoin broker worldwide with availability in more than 100 countries.
Apart from Coinbase, there are many other exchanges and brokers you can find to buy or trade bitcoins and other cryptocurrencies.
List of the Best Exchanges country-wise
|United States||Coinbase, Coinmama, CEX, Kraken, Gemini, Binance, Paxful, etc.|
|Europe||Binance, Bitstamp, EXMO, ZedXE, Bitpanda, PrimeXBT, Kriptomat, etc.|
|India||WazirX, Unocoin, Paxful, Zebpay, CoinDCX, etc.|
|South Korea||Bithumb, UPbit, Korbit, Hanbitco, Coinone, GOPAX, Huobi Korea, Probit Korea, Bitsonic, etc.|
|Nigeria||Luno, NairaEx, BitPesa, Quidax, Remitano, Blockvila, Yellow Card, Changelly. Etc.|
|Russia||Libertex, StormGain, Deribit, PayBis, FTX, Interdax, SimpleFX, Hodl Hodl, etc.|
|Australia||Swyftx, CoinSpot, eToro, Independent Reserve, Cointree, Uphold, LocalCoinSwap, etc.|
|South Africa||Binance, Bitpanda, Bittrex, Coinbase, etc.|
However, there are still some countries where there are no bitcoin exchange platforms available for the population. As such, people don’t have an option to transfer the funds from their bank accounts for the sake of purchasing bitcoins. As a result, it becomes tough for the users to hold the bitcoins, especially with the prices skyrocketing rapidly. It might get too late for them to purchase the bitcoins. But there is no need to worry because there are still some other options that users can leverage to buy the bitcoins, such as:
- No KYC and AML exchanges like By bit
- Buying bitcoin using Paypal
- Debit Cards
- Credit Cards
So, it is not necessary to rely upon cryptocurrency exchanges to buy bitcoins. There are a lot of platforms that accept debit cards or credit cards to make a purchase. Take Binance, for example. Binance is one platform where a user can purchase bitcoins merely using their debit/credit card. It is also a no KYC exchange.
Some other websites where a user can purchase the bitcoins instantly using a debit card or credit card:
If you think that these are the only options, then you are wrong. There are still other ways that can help users to buy bitcoins. Take P2P exchange, for example, that works precisely like eBay, where the buyers and sellers can connect directly to exchange bitcoins. Some of the most popular P2P businesses are:
Bitcoin ATMs also work just like regular ATMs, and the user can use them to purchase or sell bitcoins. Some of the top crypto ATM operators have been listed below:
- Coin Cloud
- Bitcoin Depot
- Digital Mint
- Pay DEPOT LLC
So, what you have to do is select the medium for purchasing the bitcoins. Once you have decided on the website, exchange, or ATM operator that you think is the best option for you to buy the bitcoins, you will have to store them in a secure wallet. If you still have any doubts regarding the best chance to purchase the bitcoins, let us know in the comment section below. We will try our best to provide you with a professional consultation.
Storing the bitcoins in a wallet
After you have purchased the bitcoins, then you will need to keep them in a wallet securely. There are many bitcoin wallets available online, but choosing the right one is the most critical task. You may lose your bitcoins if you have not conducted any investigation before storing them in a wallet, which can turn out to be a fraud. If you navigate the bitcoin wallets in Google play store or App Store, you will be amazed by the number of options listed.
Here, most of the entrepreneurs make the biggest mistake by randomly picking a Bitcoin wallet because it has been listed on the Google play store or the first page of popular search engines like Google.
Another essential thing to note here is that popular exchange systems such as Binance, CEX, and many more deliver an in-built Bitcoin wallet where you can store your Bitcoins. The problem with Bitcoins exchange platforms is that if any of these exchange systems are shut down or collapsed, you will lose your precious bitcoins’ accessibility. It has already happened in the past, so there is no doubt that it might happen in the future again. These exchanges are safe, but using them as a wallet is not a recommended option.
As only a few nations worldwide are working on legalizing bitcoins and other cryptocurrencies, the probability is high that any of these exchanges can be closed down anytime soon. In September 2017, something similar had happened in China. One more reason not to store or pile up your bitcoins in exchanges is that these are highly prone to hacking risk or cyberattack, and you may lose your bitcoins as such.
If you are thinking of storing bitcoins in a bank, then it is not a possible option because cryptocurrencies are not a typical currency that can be stored in a bank. You are entirely responsible for your bitcoins’ safety and security, so it is better to keep them in a wallet for 100% supervision over it by maintaining a private key or seed word. Bitcoin is locked by a password called seed word. Even if you lose your hardware wallet or phone, you can quickly recover Bitcoin by these seed words.
There are various kinds of Bitcoin wallets. Have a look at them-
- A mobile wallet operated through a mobile application (available for iOS and Android devices both).
- Desktop wallets can be operated via software.
- Web wallets available on the websites.
- The hardware wallet (most secure and trustable option).
- Paper wallet.
One important thing to note is that mobile apps and desktop websites’ security depend on the device security itself. So it’s quite a risky game to handle your wallet through these devices. So what is the best option? The answer is hardware wallets. A hardware wallet is the most secure alternative to store your bitcoins.
We want to recommend you the following Bitcoin wallets because they are successful in providing robust security to secure your valuable assets from thieves, hackers, and scammers.
Ledger Nano X is the latest hardware wallet made especially to defend your cryptocurrencies and bitcoins. It’s easy to operate and has a smooth setup. To secure funds with a private key is provided, which can be stored in a certified chip.
The hardware wallet- SatoshiLabs manufacture Trezor. It has made the right name for providing reliable cold storage solutions to secure users’ cryptocurrency. It is equipped with a color touchscreen and does not have any buttons. The device firmware is designed from scratch to save it from any malware.
But there is one problem with hardware wallets, i.e., availability. It takes time for these inspiring devices to get to your home because their demand is very high.
If you are into the idea of day trading, you can exercise the option to purchase the bitcoins today and then sell them when the value shoots up. But if you see bitcoins as an asset having great potential, then it is better to shape your investment plan in such a way so that you purchase them not for immediate selling but to hold them for a long time. Although, you should remember that whatever plan you have selected to go with, owning the bitcoins will always create a tax situation. Bitcoins or any other cryptocurrency that you have purchased, sold, or mined can be taxable. If your client or employer has paid you through bitcoins, then that payment shall fall under the purview of tax regulation and laws.
Always remember that you are putting your hard-earned money into bitcoins. If the price touches a reasonable level, you should lock such an opportunity to liquidate your investments. Never see bitcoins as a cryptocurrency, but a high-potential asset that can yield maximum returns if you know how to play the game. If you have any doubts, queries, or suggestions, please use the comment section below to express your thoughts.