This article is a beginner’s guide on how to buy Bitcoin. If you are a newcomer thinking of buying your first bitcoins, this guide is precisely made for you. We are giving you step-by-step instructions and useful advice.
This article has four different sections. First, we’ll remind you of things to consider before making the first purchase. After that, we’ll jump right into buying bitcoins. We’ll also talk about alternative buying methods. There are also important things to consider after the purchase.
Things to consider when buying Bitcoin
Buying Bitcoin is not difficult anymore. You can make a purchase from a reliable (and local) exchange. It’s easy to register a new account and complete a KYC process. Deposits can be done fast & safely with a debit card or via SEPA transfer. Once you have money in your exchange account, buying bitcoins takes just a couple of seconds.
If you can use an internet bank, you can buy bitcoins as well. It isn’t any more difficult than that. Every exchange has a mobile app too for those who don’t have desktop computers.
Even if the buying process is simple, there are a few things you should consider before making your first purchase.
Bitcoin has been available as an investment for 10 years. This is not a long time. Stocks have been widely available for 100+ years. People have invested in gold for thousands of years.
You could say the Bitcoin market is still underdeveloped. It lacks the regulation and security the stock market has. It’s also a small market in terms of dollar size. A small market is easy to move in both directions. This leads to high volatility. Bitcoin price can move 10-20 percent inside one hour.
You should also ask yourself: why are you investing in Bitcoin? Do you want to make money by speculating? Do you want to invest in an asset outside the banking system? Many invested in Bitcoin originally as an alternative to gold and silver. This is not the case anymore when the market has expanded.
If you want to be a successful Bitcoin investor, you must learn about Bitcoin. The more you read, the better. Internet is full of valuable resources free of charge. There are also dozens of great books. Once you fully understand Bitcoin, you won’t panic during the first price crash either.
The world of Bitcoin is full of FUD (Fear, Uncertainty, and Doubt). A lot of that is also released on purpose to scare investors out of their positions. A successful Bitcoin investor must have nerves of steel. You must learn to see the big picture and ignore the short-term noise.
The better prepared you are, the better chances you have to succeed. AboutBitcoin.io is full of useful material and beginner’s guides. Reading this article is a good step in the right direction.
How to buy Bitcoin
Now we can move forward and explain how to buy Bitcoin.
First, you must remember that Bitcoin is 100 percent digital currency. Even if we mostly use online banks these days, cash and coins still exist. Bitcoin doesn’t have this option. Since Bitcoin is digital currency only, all operations are done online. This means buying & selling Bitcoin, storing your coins, and sending & receiving them.
Coinmotion is the biggest Scandinavian service for buying, selling, and storing your bitcoins. You should also check our Coinmotion review.
This is how the process works at Coinmotion.
- Open a new account at Coinmotion and fill in your personal information.
- Go through the KYC process.
- Make a deposit (EUR) to your account.
- Exchange your fiat currency (EUR) to bitcoins.
If you use an internet bank, you can use Coinmotion as well. It isn’t any more difficult than that. A mobile version is also available.
Some newbies think Bitcoin is too expensive and have the impression you must buy at least one Bitcoin. This is not the case. Bitcoins are divisible just like fiat currencies too. The smallest amount that can be sent via the Bitcoin network is 0.00000001 BTC. This is called satoshi. It is a one hundred millionth of a single bitcoin.
You can go and buy bitcoins with $1 if you want. Hence, buying bitcoins is available for everybody.
Different ways to invest in Bitcoin
The crypto market has changed a lot since the boom of 2017. Back then, you could only buy bitcoins from many exchanges. This is not the case anymore. It’s easy to invest in hundreds of different coins now.
There are also new methods available for buying Bitcoin. This is partly due to the arrival of institutional investors. Bitcoin has become a widely accepted asset globally. Many investors want to just speculate with its price and even use leverage instead of holding bitcoins in their wallets.
Here are a couple of new ways to invest in Bitcoin.
Buy Bitcoin futures from Binance
Bitcoin futures were first introduced in late 2017. In the beginning, they were only available for institutional investors. This has changed in the past few years. Futures are widely available with up to 100x leverage. There are also futures for the most popular altcoins.
Binance is the leading cryptocurrency exchange in the market. It offers a wide range of Bitcoin futures. Since we are talking about derivatives now, they have two advantages over traditional spot buying. You can short the market and use leverage.
Shorting means basically betting against Bitcoin’s price increase. This means you can make money when the Bitcoin price goes down. When you add leverage, it’s possible to multiply your winnings. This, of course, is also riskier.
It’s also possible to take loans against your holdings and invest in alternative currencies to diversify your crypto positions.
Buy stocks and crypto from eToro
Bitcoin has arrived on many traditional trading platforms in recent years. eToro is a great example of this. It is one of the most popular trading platforms with over 10 million customers. eToro added Bitcoin (and other popular cryptos) in 2017.
Why would you like to invest in crypto via eToro? First, you have the possibility to use derivatives. This means shorting and leverage. You can get the same benefits you would get from investing via Bitcoin futures.
Second, it’s easy to invest in hundreds of other assets via the same platform. There are stocks, commodities, currencies, etc. eToro has also a super-popular CopyTrader feature. This allows you to automatically copy the trades of the smartest users on the platform.
eToro is a smart choice for those who want to invest in cryptos and other asset classes at the same time. Remember, you can also invest in the stocks of public crypto companies like Coinbase. This gives you a different types of crypto market exposure.
Try eToro today!
78% 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.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
General guidelines for the future
You have finally made your first purchases. Congrats! But, now what? Should you forget your investments and check back in the year 2030? This could work for some people, but we recommend a more active approach.
First, you should think about your long-term strategy. Many stocks investors are making weekly or monthly purchases on ETFs, for example. This is called DCA or Dollar-Cost Averaging.
This strategy will give you the average price of an asset in the long run. It is also very easy to automate in an exchange like Coinmotion. DCA also removes stress since you don’t need to time the market and follow prices.
Buying is the first step but selling is equally important. It rarely gets the attention it deserves. This is unfortunate since selling is the process that decides the number of profits or losses you eventually get.
Bitcoin is known for its volatility. Buy bitcoins today and your position might be worth -20% or +20% by tomorrow. Not to even mention the possible price movements in a month or in a year. We strongly recommend making an exit strategy right away. Plan when you sell and how much.
Selling might sound easy, but it is extremely difficult. Especially when prices are moving higher. Greed takes over so easily. Many newbie investors forget to take profit and invest even more in a bull market. When the price moves against them, panic hits.
It’s important to have a pre-made plan for selling your coins. This helps to keep your head cool when profits are soaring. Once you have taken out your initial investment, you are basically playing with house money. This will also help to reduce stress in times of volatility.
Follow the markets and store your coins safely
If you are not buying derivatives but the actual Bitcoin, you need to also think about storing them. We consider Coinmotion as an extremely safe service. Yet, it’s never a bad idea to have your own coins in your own possession.
Even if the risk of a hack or a theft is small, it always exists. It might be your own login information gets compromised too. Sometimes an exchange might be down, or withdrawals might be paused due to technical upgrades.
When bitcoins are in your own wallet, you have 100 percent control of your assets. We recommend reading this article about different Bitcoin wallets. Choose the method that fits your needs.
You should also follow the macro trends and the main news of the industry. This will help you understand market cycles and the latest events. Why did Bitcoin crash today? Or why did it go up 50% last month? Follow our news articles and you will never miss any key events.