To buy Bitcoin using a major cryptocurrency trading platform such as Coinberry, here are the steps to get started:
- Sign up and create an account.
- Verify your account and identity.
- Add funds through wire transfer or Interac e-Transfer.
- Buy Bitcoin.
Total beginners have found it easy because it’s all a quick and straightforward process. It’s like opening a new bank account or starting with online stock trading. With this quick and straightforward process, many have been able to start their crypto investing journey without acquiring much technical knowledge about how cryptocurrencies work.
Should you buy Bitcoin now?
Both beginners and experienced investors have been learning what Bitcoin is and how to buy Bitcoin – BTC price today, live charts and news. Once they’ve learned the fundamentals, they want to monitor the news and trends as well as Bitcoin’s price history.
Getting timely information often makes us feel more confident about our decisions. With more information in our hands, we feel that we can make the right choice. It’s especially the case in investing where right before buying Bitcoin, many of us will first look at the news and Bitcoin’s recent price history.
For instance, if we see that it’s been going down for several weeks already, we might do either of the following:
- Wait and see whether the price will fall further down.
- Buy Bitcoin now while its price is still low.
Either way, we don’t know what will happen next. Our decision won’t affect the outcome as to whether Bitcoin’s price will rise or fall. Even with more information on our hands, what we know is still incomplete. And yes, there are possibly dozens of variables and market forces that might be affecting Bitcoin’s price.
For our analysis, let’s talk about the potential outcomes when we buy Bitcoin today:
- Bitcoin’s price falls down (we lose money).
- Bitcoin’s price goes up (we make a profit).
However, those outcomes only become “real” when we actually sell the Bitcoin we have. For example, if we hold our crypto assets (or HODL as crypto enthusiasts use to say), these things might happen:
- Bitcoin’s price drops further (“we lose more money”).
- Bitcoin’s price increase further (“we get more profits”).
- Bitcoin’s price goes back to the original price we bought it (no profit).
In other words, if we wait a bit more, we can further increase our profits or losses. We might also lose or gain nothing at all if Bitcoin’s price goes back again and we decide to sell it.
Because of this uncertainty, it’s nearly impossible to predict Bitcoin’s price and get the perfect timing of when to buy, sell, or hold. Instead of making a prediction, what we can do instead is to start small and minimize or spread the risks.
For instance, instead of putting a huge lump sum of money one time, we can spread that money and consistently buy small amounts of crypto over time (such as every week or month).
Although we might miss out on the huge spikes (e.g. Bitcoin’s price suddenly peaked), we also avoid huge drops and losses that might happen if we make a one-time investment.
Is Bitcoin a good investment?
Among the cryptocurrencies, Bitcoin is still number one in popularity and market capitalization followed by:
Private Keys And Bitcoin: What’s The Deal?- Ethereum (ETH)
- Tether (USDT)
- US Dollar Coin (USDC).
- Binance Coin (BNB)
- Ripple (XRP)
- Binance USD (BUSD).
- Cardano (ADA)
- Solana (SOL)
- Dogecoin (DOGE).
Other cryptocurrencies also have a large following and huge market capitalizations. Still, Bitcoin is number one because:
- It’s the first and it feels safe to be your first cryptocurrency to buy.
- Bitcoin’s position is already entrenched (first-mover advantage, switching cost).
- Tendency to stick to what we already know (we prefer what’s familiar or what’s the most popular).
Also, Bitcoin has been attracting the attention and support of many billionaires and investment firms. Even if Bitcoin’s future is uncertain, it’s still always moving and maintaining its billions of dollars worth of market capitalization.
How to stay safe in crypto investing
Even with Bitcoin’s popularity and bright outlook of many of its backers and supporters, investing in crypto still has risks. Let’s talk about how to address those risks and how to stay safe in crypto investing.
Earlier we talked about spreading the risks and consistently buying small amounts of crypto over time. This is called the dollar cost averaging strategy. In this strategy, this is what happens:
- You set up the amount and frequency of buying Bitcoin.
- You forget about it and ignore the market.
- After several weeks or months, you would have accumulated a sizable amount of crypto.
This is called “set it and forget it” because you’ll ignore the market and perhaps focus on your other pursuits or other important matters. Slowly but surely, you’ll be accumulating some crypto assets over time.
What Is Blockchain Technology?Dollar cost averaging strategy reduces risks because you’re only investing small amounts at any given time. In contrast, if you invest a huge amount one time, Bitcoin’s price might suddenly drop and you’ll suffer huge losses.
In dollar cost averaging, your losses will be minimal. In other words, the losses and gains will also average out. You might not be able to maximize your gains (which is nearly impossible unless you can always perfectly time the market), but you’ll be able to prevent worse things from happening (suffering huge financial losses because you invested a huge amount in one go).
Aside from applying dollar cost averaging strategy, it also helps to do the following:
- Choose a trusted crypto trading platform.
- Secure your account (e.g. multifactor authentication).
- Beware of phishing and clicking on suspicious links.
- Verify that you’re logging in at the right app or website.
If you’re using a trusted crypto trading platform, you’ll have fewer worries and gain more focus and energy on learning more about crypto investing.
If your account is secure, no one can make unauthorized transactions without your knowledge. If you’re only clicking trusted links and logging in only at the right app or website, you can avoid giving away your account information and login credentials.
When you stay safe in crypto investing, you can truly avoid losses and perhaps experience some financial gains along the way. Although crypto investing has high uncertainty, the ultimate goal remains the same: Protect your money and minimize your losses and risks.
