Investing in Bitcoin has been compared to investing in "digital gold." Setting aside the inflation-hedge claims of Bitcoin enthusiasts, comparing it to gold is a good analogy when considering the myriad ways to invest in Bitcoin.
If, after evaluating the pros and cons of investing in Bitcoin, you decide you want to own it for yourself, there are a few things you need to know. The steps below offer a guide to buying Bitcoin and provide a jumping-off point for further research.
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After purchasing Bitcoin, it is stored in a wallet. There are two kinds of wallets: a "hot wallet" and a "cold wallet." Cold wallets are a safer option for the long-term storage of your coins. These wallets are portable devices like a flash drive that allows you to store your Bitcoin offline for added security.
To buy and sell Bitcoin, you will need to link a bank account to your cryptocurrency exchange or wallet. This process is similar to connecting a bank account to a traditional investment account and allows you to exchange dollars for crypto coins.
Once your account is set up and your bank account linked, you are ready for the easiest step, placing your order. Most exchanges offer multiple ways to place orders, such as market orders, limit orders, and stop-loss orders.
Depending on your investing goals, once your coins are safely in your wallet, you can manage them in multiple ways, including: – Hodl: Colloquially known as "hold on for dear life," you can hold your coins in the hopes of future appreciation. – Trade: If you are an active trader and want to take advantage of the volatility of Bitcoin, you can choose to buy and sell Bitcoin from your wallet. – Purchase: There is a growing metaverse of products and investments denominated in cryptocurrencies that you can choose to buy, such as NFTs or even digital real estate.