Invest in the highest returning financial asset of the past decade today with low fees. Buy Bitcoin online outperforms the S&P 500, commodities and all other popular investment opportunities.
Bitcoin, the world's first and most popular cryptocurrency, rose from a few cents in 2010 to as high as $69,000 more than a decade later, with that all-time high occurring in November 2021.
There are many reasons why people buy Bitcoin. It is seen as a hedge against inflation, a store of value - like "digital gold" - and a medium of exchange. Many expect new highs to be created after the Bitcoin halving in 2024, and as of 2023, the Bitcoin price is trading at a discount.
If you're new to Bitcoin, you'll want to understand how it works and the best safe places to buy Bitcoin. Many platforms vary in services, trading features, fees, and deposit methods. In this guide, we'll walk you through how to buy Bitcoin online and review the best cryptocurrency exchanges.
Buying Bitcoin (BTC) - Quick Guide
Choose a Bitcoin exchange - we recommend Coinbase as our top choice.
Create an account and deposit funds - multiple payment methods accepted: Paypal, debit/credit cards, bank transfer and more.
Search for "Bitcoin" or "BTC" in the top menu.
Click "Open Trade" and select the amount of Bitcoin you want to buy.
Where to Safely Buy Bitcoin Online
If you are looking for a more comprehensive step-by-step guide to buying Bitcoin online, the section below will show you what you need to do to ensure a safe and low-cost way to acquire Bitcoin. We use Coinbase in this example, but all of the exchanges and brokers listed below are recommended.
Step 1: Open an account
It’s quick to open a Coinbase account from your desktop computer or mobile device. Head to the website or download the mobile app to get started, then fill in the required details and verify your email address and phone number.
Coinbase also requires users to fill out a short questionnaire and link a payment method.
Step 2: Upload your ID
As a centralized exchange, Coinbase requires users to upload certain Know Your Customer (KYC) documents to meet compliance requirements. This includes an ID photo.
Step 3: Deposit
Once an account is set up, it’s possible to replenish your Coinbase wallet with fiat-cryptocurrency funds – deposits can be made using debit/credit cards, bank or wire transfers, PayPal, and Apple/Google Pay.
Step 4: Buy Bitcoin
Once you have funds in your Coinbase account, select the "Trade" button on the main dashboard and search for Bitcoin or BTC. Then select the "Buy" button and enter the amount of funds you want to spend and complete the transaction.
Visit Coinbase
Where to buy Bitcoin
The Bitcoin market has matured a lot. Due to its popularity, there are now several options to buy Bitcoin. This is in stark contrast to the situation a few years ago.
From cryptocurrency-focused exchanges and brokers to exchanges that provide services for other asset classes, digital assets are easily accessible to everyone.
However, the problem with this diversity is that finding the best place to buy Bitcoin can be a bit difficult. In this guide, we’ve sifted through the platforms and provided a brief section on their features, fees, and the peculiarities of each.
To save you time researching various different platforms, here are the best options for buying Bitcoin:
1. Coinbase - Largest cryptocurrency exchange in the United States
Coinbase is one of the largest cryptocurrency exchanges and our top pick for the best cryptocurrency exchange for Bitcoin and other tokens. The exchange offers several advantages, including a simple and intuitive interface and many trading pairs.
Coinbase, based in Wilmington, Delaware, is often the first choice for new cryptocurrency investors in the United States. Trading is also available here, and Coinbase's interface is tailored specifically for beginners. If you are an experienced trader, you can use the Coinbase Pro version.
Coinbase is also one of the largest cryptocurrency companies. In addition to its trading services, it also offers trading through the Coinbase Pro platform. Users can also enjoy a payment platform for businesses, custody services, and its token - COIN.
advantage:
Simple and intuitive interface suitable for both novice and professional traders
Coinbase is one of the most liquid exchanges, so your transactions are fast
Coinbase offers a wide selection of coins
Low minimum balance requirements
shortcoming:
Complex fee structure
Transaction fees are higher than other platforms
Visit Coinbase
2. Kraken - Popular exchange since 2011
Kraken is a well-known cryptocurrency exchange founded in 2011 and headquartered in San Francisco. It has been around for quite some time and has offices around the world. With over 8 million active users, Kraken can be considered an exchange with strong traction in the industry. Kraken is currently the third largest cryptocurrency exchange in the world based on trading volume.
The exchange supports more than 120 popular cryptocurrencies and is constantly adding more promising projects. The platform supports three major stablecoins - USDC, DAI and USDT, as well as seven fiat currencies, including USD, CAD, EUR, AUD, GBP, CHF and JPY. Kraken is regulated by FinCEN, ensuring good security for holding assets on two versions of the exchange - Kraken and Kraken Pro.
One downside of the exchange is that without using Kraken Pro, users must pay higher fees to participate in advanced trading products such as derivatives or futures. Kraken also offers staking services for a variety of assets.
advantage:
Supports seven major fiat currencies
Regulated by well-known financial institutions
A reputation that has been built over the years
shortcoming:
Customer service can be lacking
Non-Kraken Pro users pay higher fees
Visit Kraken
3. OKX - Buy Bitcoin via DEX or CEX
OKX is a Seychelles-based cryptocurrency exchange founded in 2017 that offers two trading methods, DEX and CEX, that investors can use to buy Bitcoin. OKX DEX is a DEX aggregator that uses X Routing to find the best options for liquidity pools and reduce slippage and network fees, allowing experienced traders to easily exchange crypto assets for Bitcoin without providing any detailed information.
However, most of the platform’s features are in OKX CEX. OKX CEX supports more than 350 cryptocurrencies and features regular trading, spot trading, derivatives trading, and margin trading. The platform also features tools such as copy trading and trading robots. The former allows users to take advantage of trading signals from more successful traders, while the latter enables investors to automate their trading processes.
Regarding fees, OKX adopts a market maker/market maker fee model. Fees start from 0.080%/0.1%, but can be lowered by holding enough OKB tokens in the trading account.
Another reason why users choose OKX to buy Bitcoin is the OKX Risk Shield. OKX Risk Shield is an asset risk reserve that stores a portion of the user’s assets to protect the user’s funds from any unnecessary security risks.
advantage:
Provide CEX and DEX functions
Allows users to copy the signals of other successful traders
In addition to Bitcoin, more than 350 other cryptocurrencies are supported
shortcoming:
Not available in the United States
Fees can only be reduced by holding OKB tokens
Visit OKX
4. Bybit - Buy Bitcoin through a user-friendly cryptocurrency exchange platform
Bybit is a cryptocurrency exchange founded in 2018 that quickly gained traction in 2022 and early 2023, becoming one of the top ten cryptocurrency exchanges in the world. Currently ranked 6th, Bybit has a daily trading volume of around $600 million.
The platform is one of the best choices for buying Bitcoin due to its many utilities. First, it allows users to buy Bitcoin or other assets with just one click. In addition, Bybit also offers features such as P2P trading, spot trading, and margin trading.
The cryptocurrency exchange also doubles as an educational platform, offering a learning program where users can learn about other cryptocurrencies, learn about DeFi, or start trading. Like OKX, it also offers features like copy trading and trading bots.
Bybit has a standard fee structure that uses a market maker/market maker fee model. Trading fees vary depending on the type of trade the investor is involved in. Another determining factor is whether the user is a VIP or non-VIP.
Bybit also has an audited proof of reserves, and all users' assets on the platform have a 1:1 reserve ratio. Users can view their audit data or Bybit's reserve ratio.
advantage:
Providing a simplified platform for buying Bitcoin
One of the top ten cryptocurrency exchanges in the world
Has a tiered fee structure
Copy trading available
Has a large library of articles on cryptocurrencies and cryptocurrency trading
shortcoming:
Not available in the United States
Fee structure can be difficult to understand
Not a regulated cryptocurrency exchange
Visit Bybit
5. Huobi - A Trusted Name for Buying Bitcoin
On Huobi (now HTX), you can buy Bitcoin and own the underlying asset (spot trading), or trade Bitcoin price action using virtual contracts to take a long or short position for more Bitcoin or more USDT. It offers up to 200x leverage, which is higher than most Bitcoin trading platforms.
The bitcoin exchange also has a free grid trading bot that allows users to set up automated trades without having to monitor the bitcoin market 24 hours a day. It shows backtested returns over the past week.
Huobi, also known as Huobi Global, was founded in 2013 and is a well-known exchange in the early days of Bitcoin, becoming one of the best options for buying Bitcoin and gaining the trust of the general public.
Huobi’s users have not experienced any hacking or data breach issues.
The exchange has provided assistance to other smaller Bitcoin exchanges that have been hacked in the past, such as Bitmart in December 2021, to improve their security protocols.
Bitcoin cannot be staked, but Huobi offers a variety of cryptocurrencies for staking in other coins and tokens to earn high annual returns.
advantage:
Free automated trading robots
Cryptocurrencies are staked for passive income
High leverage margin trading
Good reputation
shortcoming:
The market maker/market maker fee of 0.2% is higher than Coinbase Pro and Binance
Visit Huobi
6. Crypto.com - Cryptocurrency Debit Card and App
Crypto.com is a relatively new cryptocurrency exchange and mobile app that has a metal VISA prepaid card that allows users to store Bitcoin and use it for everyday spending and receive up to 8% cashback.
Users can also earn up to 14.5% in interest on stablecoin crypto holdings - for holding Bitcoin, Crypto.com offers rates up to 8.5%.
Currently, US investors can use the app, VISA cards and wallets, but cannot access the website trading platform, although they may be accepted.
Crypto.com has listed over 250 cryptocurrencies and supports DeFi farming, staking, and Bitcoin lending. It also has its own non-fungible token marketplace where you can create, display, sell, and buy NFTs; some cheap NFTs on the site start at just $10, or $1 at auction.
Founded in 2016, Crypto.com is relatively new to the cryptocurrency market and sponsors the UFC, several sports teams and F1, and has featured Matt Damon in its ads. Its slogan is "Fortune favors the brave." There are more than 10 million users on the platform.
advantage:
Bitcoin's annual interest rate is as high as 8.5%
Interest on staking and other cryptocurrencies
DeFi Farming
Bitcoin Debit Cards and Wallets
shortcoming:
Some restrictions on US investors
High spread fees
Visit Crypto.com
7. Uphold - Easy web and app trading
Trusted by 7 million users in 184 countries, the Uphold exchange, app, and debit card are the fast and convenient way to buy Bitcoin.
In addition to the website, they also offer apps on Google Play and App Store for Android and iOS users.
Uphold charges a spread of 0.85% when buying Bitcoin and 1% when selling.
You can also invest in some other popular assets on Uphold, such as Apple stock, Amazon, AT&T, Tesla, gold, silver, platinum, palladium, etc. Their slogan is "Anything for anything".
They also open investing to anyone through fractional stock trading - you can invest in companies like Google with as little as $1, unlike some online stock brokers that require you to invest a large amount of money to get started.
advantage:
No deposit or withdrawal fees
Get 2% Cashback with Crypto Debit Cards
Also buy and trade stocks, metals, fiat currencies
shortcoming:
Paypal is not yet supported
Supports fewer crypto assets than larger exchanges
Visit Uphold
8. Binance - Top Cryptocurrency Exchange to Buy Bitcoin
Binance is the world’s largest cryptocurrency exchange by daily trading volume. The exchange is very famous worldwide and has a daily trading volume of over $50 billion. For users, Binance offers a lot of options. You can get good liquidity as the trading activity of the assets is very active, and the exchange provides access to a wide range of cryptocurrencies, including Bitcoin and Ethereum.
Binance's trading commissions start from about 0.1%, and the platform's KYC process is relatively simple. Binance also offers leveraged trading and access to cryptocurrency futures, allowing traders to buy cryptocurrencies that exceed their wallet balance.
You can also buy Bitcoin using fiat currency. The cheapest option is to complete a bank transfer, although this can take a few days to arrive depending on your location. If you want super-fast deposits, consider using a debit or credit card.
advantage:
Over 100 cryptocurrencies available
Low transaction fees
Provides a wide range of trading options
Debit/credit cards and bank transfers supported
Good reputation in the cryptocurrency space
For advanced traders seeking sophisticated tools and features
shortcoming:
Not very friendly to novice investors
Higher debit/credit card fees
Visit Binance
9. Libertex - Industry-leading broker for stocks and CFDs
Based in Cyprus, Libertex has been available since 1997. The platform is known for its zero-spread pricing structure, which is unique in the world of CFD trading. It offers two web trading platforms for traders. Libertex offers MT4 and Libertex Web Trader.
Libertex is somewhat limited in terms of service offering. The trading platform covers about 213 markets. These include stocks, forex, Bitcoin, and more. You can trade and buy more than 50 cryptocurrencies on Libertex. Advanced traders will also enjoy margin trading with leverage up to 1:30.
Libertex offers flexibility and a seamless trading interface, providing both mobile applications and desktop trading interfaces. Available deposit channels include Skrill, Neteller, credit and debit cards, bank transfers, Multibanco, Sofort, Trustly, and more.
advantage:
Demo account available
Flexible payment and withdrawal methods
Facilitates technical analysis research and testing
shortcoming:
Poor education
Charges for certain withdrawal channels
Visit Libertex
What is Bitcoin?
For cryptocurrency newbies who want to buy Bitcoin online, you must understand what this asset is and how it works.
So, what is Bitcoin?
The simplest way to describe Bitcoin is that it is a digital currency that allows you to send and receive value in digital form.
As a digital currency, Bitcoin exists in a virtual form - unlike traditional currencies.
The underlying technology that powers Bitcoin is called “blockchain” – it allows decentralized transactions to take place.
This means that no single institution or authority has control over Bitcoin.
When sending Bitcoin to another person, the transaction is done between wallets. It usually takes 10 minutes to process - regardless of the location of the sender and recipient.
Bitcoin was introduced in 2009 by Satoshi Nakamoto - a pseudonym for a person - or group of people - who remains unknown to this day. Nakamoto posted a message on a cryptography-related mailing list titled "Bitcoin P2P Electronic Cash Paper". The message was a link to a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System".
In his paper, Nakamoto shared the concept of Bitcoin as a digital, decentralized currency system. As a decentralized asset, no single person or company would control Bitcoin. Instead, it would run on a public ledger of transactions called a blockchain. Anyone could store the blockchain on a computer, making it easy to send from one person to another without the need for an intermediary.
In January 2009, Bitcoin's blockchain was launched. The asset's first block - the genesis block - was mined, and the first Bitcoin transaction took place a week after the block was mined. At this point, Bitcoin was worthless. Miners solved complex equations on the Bitcoin blockchain to earn more tokens - they used it for fun.
However, on May 22, 2010, a Florida resident agreed to pay 10,000 bitcoins for two Papa John's pizzas. At the time, the two pizzas were valued at $25, which made the bitcoin worth about one cent each.
In the early days of Bitcoin, transactions were conducted on internet forums. The asset maintained an arbitrary value, and most people discussed Bitcoin. By 2011, miners and programmers began looking for ways to build their own Bitcoin networks.
Blockchains like Litecoin and Ethereum emerged, attracting more people. As the scope of application expanded and the number of users increased, the value of Bitcoin began to rise.
There are also more and more companies that are starting to use Bitcoin as a payment method, and it becomes easier to trade and make transactions when Bitcoin is listed on major exchanges. These exchanges allow Bitcoin to be priced against currencies such as the US dollar and Tether.
In March 2018, the first version of the Bitcoin Lightning Network was implemented to improve scalability.
Why Buy Bitcoin? Bitcoin Analysis
There are many reasons why people buy Bitcoin. Some consider it for the technology. Others buy it for speculative purposes. If you are unsure whether Bitcoin is right for your portfolio, we have listed some key reasons why you might decide to invest today.
Earnings Potential
Keeping your money in the bank is not that profitable anymore. When you keep your money in the bank, you might get 1% in interest if you are lucky. Considering the inflation rate, you will find that this rate is too low. Most people prevent wealth erosion by investing in stocks, as stocks have been proven to provide higher returns.
Bitcoin’s returns are still far higher than they have been in some time. At its genesis, Bitcoin had no value — in fact, the asset was worth just $1 in 2011. But fast forward to 2023, and Bitcoin is now worth over $25,000. This growth is staggering.
You might think you’ve missed out on the Bitcoin boom — and indeed, you probably won’t see those amazing returns any time soon. But when you consider the returns Bitcoin offers and compare them to any other financial asset — or keeping your money in a bank — you’ll see that it’s simply too high.
Bitcoin’s Solid Economic Foundation
Satoshi Nakamoto understood that once Bitcoin became popular, it would become very valuable. Therefore, the creator put in place a structure to protect its value. Bitcoin is currently capped at 21,000 million - meaning that after 21 million coins are mined, there will be no more Bitcoins in existence.
Anyone who understands economics knows that scarcity gives an asset its greatest value. Think of assets like gold and other precious metals. Their scarcity increases their value because more and more people want to own them over time. The same thing happens with Bitcoin. Due to its limited supply, the asset can hold and maintain its value. Bitcoin is also not controlled by any government or central authority, so its supply cannot be manipulated.
Invest a small amount of money
People often mistakenly believe that you need to buy a whole Bitcoin to enter this market. With a five-digit price tag - this can be unattainable for some investors. However, as a digital currency, Bitcoin can be divided into smaller units. One Bitcoin can be divided into 8 decimal points.
However, you need to make sure that the cryptocurrency broker you use allows small investments – most cryptocurrency exchanges and brokers allow users to buy at least $10 in Bitcoin and other cryptocurrencies.
All-weather market
When you invest in Bitcoin, you are buying into an asset class that benefits from huge liquidity. For example, in the last 24 hours, over $68 billion worth of Bitcoin has traded.
This is extremely important because it means your investment is never locked in. Instead, you can sell your Bitcoin back to cash at any time, 24 hours a day, 7 days a week.
Ways to buy Bitcoin
If you want to grow your Bitcoin portfolio, you should know that there are different ways to do it. Here are some of the most popular payment options available to you:
Buy Bitcoin via bank transfer
Linking your bank account to a cryptocurrency exchange allows for simple, convenient, and often instant deposits and withdrawals, with lower fees than debit or credit cards.
Buy Bitcoin with PayPal
PayPal is the most popular payment processor in the world. The service has hundreds of millions of users and even started accepting cryptocurrencies last year. Currently, PayPal customers can buy Bitcoin directly from the service.
Buy Bitcoin with Credit Cards
If you plan to buy Bitcoin using a credit card, first make sure that your broker accepts credit card payments. This is important because some exchanges reject credit card payments. This may be due to restrictions in your region or other reasons.
Additionally, some credit card issuers may define your Bitcoin purchase as a "cash advance." You will be required to pay a cash advance fee to complete the transaction. This fee is usually between 3% and 5% of the total transaction amount. If you are in this situation, please contact your credit card issuer.
Buy Bitcoin with a Debit Card
The debit card option is probably the most common way to buy Bitcoin. This method is simple, fast, and cheap. If you want to buy Bitcoin using a debit card, the most important thing to consider is the processing fees.
Bitcoin exchanges use different payment processors and therefore charge different fees. Some exchanges' debit card purchase fees may be as high as 4% of the total purchase amount, while others may be lower.
Buy Bitcoin with eChecks
Read our guide on how to buy Bitcoin with an e-check on sites like Paxful.
Buy Bitcoin Using a Bitcoin ATM
Bitcoin automated teller machines (ATMs) have become very popular over the past few years. Similar to traditional ATMs, dedicated cryptocurrency ATMs allow you to make cryptocurrency purchases through the machine's interface.
Data from Coin ATM Radar shows that there are currently 22,130 cryptocurrency ATMs worldwide.
Most of these machines support Bitcoin. The main difference when it comes to Bitcoin ATMs is that the fees tend to be very high. In some areas, the transaction fee can be between 10% to 20% of the transaction total.
You can buy Bitcoin using a cryptocurrency ATM by following these steps:
Find your nearest ATM
Enter the amount of Bitcoin you want to buy, usually in your local currency
The ATM will display a preview of the Bitcoins that will be purchased with the amount
Submitting Cash to a Bitcoin ATM
Enter your wallet address or use the QR code to receive Bitcoin
Print out your receipt and complete the transaction
The main downside to Bitcoin ATMs is that the fees are often very high. No matter which method you choose, you may have to pay fees for deposits, transactions, withdrawals, and sometimes conversions of Bitcoin to other currencies. Choosing an online broker with reasonable fees can save you hundreds of dollars in fees.
Security
Most people store their Bitcoin on the platform where they purchased it. While this is not the safest option, you can reduce the risk of theft by ensuring that you only deal with media with strong security protocols.
support
If you encounter a problem, you should be able to get in touch with the exchange and get a response as quickly as possible. While no one expects any problems to arise, there is an important customer support service that will come in handy from time to time.
Payment Methods
How do you deposit and withdraw money? What channels are available? The best platforms usually support bank transfers and debit cards. You can also look at payment processors such as Square and PayPal.
Volume and Liquidity
The brokerage service must have the right volume and liquidity levels. You want to ensure that the service receives the right volume and that funds can be withdrawn at any time.
Bitcoin Price
Since its launch, Bitcoin has experienced many ups and downs. The first bullish cycle occurred in 2012-2013, when Bitcoin almost reached $1,000 and experienced its first halving event. The second halving occurred in 2016, leading Bitcoin to reach $10,000 in 2017 and set a new all-time high of $17,000.
However, the most notable bullish movement of this cryptocurrency occurred in late 2021, pushing its price to an all-time high of $68,000. However, 2022 brought some major events that brought a bearish situation to this cryptocurrency. The Luna crash and the FTX exchange debacle had the most disastrous impact not only on Bitcoin but also on the entire cryptocurrency market.
Luna Crash - In May 2022, Luna's crash upended people's faith in the asset, pushing the price of Bitcoin to nearly $30,000. The Luna crash wiped out a lot of people's faith in cryptocurrencies, encouraging institutions and individuals to sell aggressively.
FTX Exchange Collapse - The third and most serious negative event in the cryptocurrency market was the collapse of FTX Exchange. SBF, long considered the savior of the cryptocurrency market due to his “effective altruism” image, turned out to be just another scammer who wiped out $8 billion from the cryptocurrency market.
Other events that have affected the price of Bitcoin include environmental issues related to Bitcoin mining, increased regulation of cryptocurrencies in many countries, the SEC's lawsuit against XRP, and other minor events. Some of these events have caused panic among investors and led to massive sell-offs. As a result, by the end of 2022, Bitcoin is trading at just over $15,000.
But Bitcoin is a speculative asset, and that was only a brief bearish period for the cryptocurrency. Since the beginning of 2023, the situation has begun to change, and the bulls are fully supporting Bitcoin. Bitcoin quickly recovered to a price of $20,000 and was trading above $23,000 by the end of January. The bullish direction continued in the following months, eventually surpassing $30,000 in April.
After a brief drop to $25,000, the price of Bitcoin began to rise again. In mid-July, Bitcoin reached this year's all-time high of $31,000. This may be related to the decision of the U.S. federal court on the SEC's lawsuit against XRP, which cryptocurrency enthusiasts consider to be a victory for the cryptocurrency world.
Another peak occurred at the end of August, when Bitcoin almost hit $28,000. This significant growth can be attributed to the latest institutional interest from financial giants BlackRock and Fidelity in filing for a spot Bitcoin ETF.
Another event that may have had an impact on this was the SEC’s rejection of Gravescales’ application for a Bitcoin ETF, a decision that was deemed wrong by a U.S. court. But Bitcoin prices fell again in early September to $25,000, the lowest price for the cryptocurrency in the past two months, which many analysts attributed to rumors that SpaceX was selling its Bitcoin holdings.
Bitcoin Price Prediction
A few months ago, Bitcoin's technical indicators were very positive, as the cryptocurrency has been trending upward since the beginning of the year. In mid-July, the price of Bitcoin rose to $31,000, which is nearly doubled compared to the end of 2022. The Fear and Greed Index of Bitcoin is over 55, indicating greed. At the same time, cryptocurrency enthusiasts believe that Bitcoin can break through the $30,000 resistance level.
However, Bitcoin did not do that and fell to $25,000 in recent days. Bitcoin's Fear and Greed Index is 40, indicating that fear prevails and investors are more inclined to sell than hold. Most technical indicators are bearish, meaning that this cryptocurrency may go downhill in the next few months.
Taking all these indicators into account, many analysts predict that Bitcoin will experience a price drop by the end of 2023. Its price may fall below $20,000 again and may even drop to $15,000. However, we must consider that these forecasts are based only on technical analysis and no one can accurately predict the direction of the cryptocurrency market. Any unexpected event may change the direction of the market.
Investing in Bitcoin vs Trading Bitcoin
Investors adopt different strategies to determine their actions in the cryptocurrency market. Some prefer to hold Bitcoin for the long term, while others want to trade Bitcoin. When should you choose one of these strategies? Let's look at the difference between investing and trading Bitcoin.
Invest in Bitcoin
Investing is the path most cryptocurrency holders choose, especially newbies. The strategy is simple - buy Bitcoin from a broker, store the asset in a wallet, and wait for the price to rise. Once the price reaches a level you are happy with, you can sell it. Most cryptocurrency investors want to put their money into an asset and hold it for the long term, at least a year. It makes sense to hold it for the long term, considering how far Bitcoin has come since its inception in 2009 and how far it has come so far.
Investing is also convenient for many people who do not want to monitor price fluctuations every day and just want to store their coins in a secure wallet. Daily market fluctuations will not seriously affect them because their goal is to hold for the long term.
Trading Bitcoin
Trading is another option. It involves entering trades based on price fluctuations and taking profits based on price fluctuations.
Bitcoin trading is about making money when the price moves in your favor. For example, you can buy 1 Bitcoin today at $30,000. If a few hours later its value increases to $32,000 and you sell, you have made $2,000. If the value of Bitcoin drops below $30,000 again (remember, this asset is volatile), you can enter a new trade and hope to make a profit again.
When it comes to trading, you make decisions based on asset price analysis. So, you might decide to open a long position today and a short position tomorrow. Trades usually last for a few days or weeks. However, there are also swing traders and day traders who hold positions for shorter periods of time.
You can also trade with leverage, which is when you trade with more money than you have. Exchanges and brokers often offer leverage to their professional clients, allowing them to maximize their chances of profit.
Which is better?
Like most things related to cryptocurrency, the situation is never clear-cut. Everyone has different reasons for holding cryptocurrency, and there is no one-size-fits-all approach. To help you make your decision, here are some factors to consider:
Timeframe
How long do you plan to hold your cryptocurrency for? If you plan to hold it for the long term, you can invest and not have to worry about price fluctuations. Over the past few years, cryptocurrencies, especially Bitcoin, have provided investors with steadily increasing returns. Therefore, you can rest assured that your funds are safe.
Reasons to hold Bitcoin
Whether they want to accept it or not, some people see cryptocurrencies as a “get rich quick” scheme. They hear that some asset has risen by more than 100% in less than a month, and they want to give it a try. If you are such a person, you may be better suited for trading. Watch the price fluctuations, and take advantage of opportunities. You may be lucky enough to witness this bullish momentum.
Continued efforts
Effective trading requires a lot of research and attention to price charts. It’s easy to jump from one hot cryptocurrency to another, but the reality is that these holders will eventually pick losers and see their wealth evaporate.
While no one is dissuading you from picking hot assets and maximizing your gains, you must ensure that your decisions are based on facts and research. Also, always keep an eye on the price charts and make sure not to get sucked in when the market is falling.
If you are too busy to do research and check prices, you might be better suited to invest in Bitcoin. Just keep the coins in your wallet and let supply and demand determine your fate.
Buy Bitcoin as a CFD Product
Like many other financial assets, Bitcoin can be traded as a Contract for Difference (CFD). A CFD is simply an agreement between a buyer and a seller that the buyer must pay the seller the difference between the current value of the asset and its value at the end of the contract. The value of a CFD does not take into account the underlying value of the asset, only the difference between the entry and exit prices.
Taxation of Bitcoin Gains
There have been several attempts to tax cryptocurrency gains, but the U.S. Internal Revenue Service (IRS) has yet to develop a stable regulatory regime. In 2014, the IRS defined cryptocurrencies as “property,” meaning they are subject to capital gains taxes.
However, there are situations where cryptocurrency activity is considered income and, therefore, subject to income tax.
In the United States, taxable events that qualify for capital gains tax include:
Sell your crypto for fiat currency
Use cryptocurrency to purchase goods and services
Exchanging one cryptocurrency for another through an exchange or peer-to-peer channel
Events that qualify for income tax include:
Get Cryptocurrency from Airdrops
Interest income earned through lending on decentralized finance (DeFi) platforms
Block rewards earned through cryptocurrency mining
Cryptocurrency for payment at work
Cryptocurrency earned through staking and liquidity pools
Note that you can use losses from trading to offset some of your capital gains. You can also deduct up to $3,000 from your income taxes, depending on how long you held the asset.
Calculate your capital gains tax
In the United States, capital gains taxes on your cryptocurrency activity will depend on how long you held the assets and your tax bracket. This classification will help you determine the following:
Short-term capital gains
If you incurred gains or losses on cryptocurrencies you held less than a year ago, your capital gains taxes will be treated at the same rate as your tax bracket. This list provides information on tax rates for 2023. Note that you can use losses to offset up to $3,000 of taxable income. You can also carry forward losses to the next year.
Long-term capital gains
If you hold cryptocurrencies for more than one year, the gains or losses from your activities will be taxed at 0%, 15%, or 20% depending on your income. You can find the classification of income in this list.
The Importance of Responsible Bitcoin Investing
From its inception in 2009 to today, Bitcoin has generated a return of over 4,822,525%. Bitcoin’s average annualized return is 230%, 10 times that of the next largest asset class (Nasdaq 100). No wonder everyone wants to get in on the action and get rich overnight.
However, investing in Bitcoin also comes with risks. You must take precautions when investing in Bitcoin. To ensure you do the right thing, keep in mind the following points:
Continuing Research
This point cannot be overemphasized. When investing in Bitcoin, remember to do as much research as possible.
You can get signals from some dedicated social media channels, read the news, and listen to expert analysis on Bitcoin. You can also get expert analysis from review sites like ours. Inside Bitcoins has experts regularly analyzing Bitcoin and other altcoins.
Protect your investment
When investing, it is very important to set a limit. If the price of Bitcoin drops by a certain percentage, cut your losses and withdraw your funds. You will lose money, but at least you will be wiser. The mistake many people make is to keep their funds and wait for the storm to pass. However, this practice only works for funds you can afford to lose.
Would you like to try Bitcoin mining?
Many people who want to earn Bitcoin tend to buy or trade Bitcoin. However, there is a third option - mining. Bitcoin mining is a process that performs complex mathematical processes and verifies transactions on the blockchain. You verify and confirm transactions and add them to the Bitcoin blockchain, thus contributing to the Bitcoin ecosystem.
Transactions verified on Bitcoin's blockchain are grouped into blocks. When a block is verified, the transactions are added to the blockchain and the miner receives Bitcoin as a reward. However, mining is not easy. The Bitcoin blockchain is very crowded and miners now have to use specialized tools. In the early days of Bitcoin, mining could be done using personal computers.
Competition in the blockchain space has made PC mining essentially obsolete today. You must use a dedicated application-specific integrated circuit (ASIC) to make money mining. However, ASICs are quite expensive. Some ASICs can cost as much as $5,000.
You also need to consider the cost of electricity, as mining is a highly energy-dependent endeavor — unless you live somewhere with abundant renewable energy, or if there are government subsidies.
Even after doing all this, you may still not make any money from mining. Blocks are mined on a first-come, first-served basis, so it may be a while before you make any money. All in all, mining requires a lot of effort before you can make enough money to justify your costs. If you want to earn Bitcoin, it's better to just trade - it's cheaper and you can start with funds you already have.
Reduce the risk of cryptocurrency investment
The two most important points we mentioned are:
Bitcoin is very profitable
Bitcoin is very risky
When you invest in Bitcoin, you must minimize the risk. To do this, consider the following points to reduce the risk of Bitcoin investment:
1. Do your own research
Before investing, always do your research and be as confident as possible about your position.
Learn as much as you can and get information from trusted sources. Remember that review sites can show some of the best analysis, and get good information from online experts and social media.
2. Beware of fraudulent schemes
The cryptocurrency market is largely unregulated, which means that many individuals and companies are out there looking for victims. Before you invest your money in a platform, find out about its security level. This is also a benefit you can get from review sites.
We also recommend that you only trade with brokers or exchanges that are actively pursuing regulation.
3. Only invest money you can afford to lose
Every investment carries risk - especially Bitcoin. To be safe, it is recommended that you only invest money you can afford to lose.
Don't lie to yourself or take out loans just because you want to invest in Bitcoin. Only invest if you have enough funds and you should be prepared to lose that money if things go wrong.
One of the great things about Bitcoin is that you can start investing and trading with the money you own, especially for new traders. From here, you will grow both financially and in your trading skills. Soon, you will be making big money.
4. Track your results
Whether you are investing or trading, you must know how your portfolio is performing. This is especially important if you are a trader. You must understand the market outlook and how it affects your positions.
Bitcoin's volatility makes it difficult to track its price.
However, there are several apps that make it easy for you to keep an eye on this asset and monitor your portfolio’s performance. Once you make it a habit to check your accounts, you can reduce your risk of experiencing significant losses.
5. Fight the fear of missing out
Dealing with the stress of cryptocurrency trading can be difficult, especially for beginners. However, never enter a position or make an investment just because someone else is doing it. This is known as the Fear of Missing Out (FOMO).
Remember to be patient and do your research. If people enter a trade because they missed out on a chance to make money, the worst that can happen is that they missed out on an opportunity to make money. At least your capital is safe. Don't invest unless you are confident and ready, no matter how great the temptation.
Best Bitcoin Wallets
As we explain in this guide, if you want to invest in Bitcoin, you have to consider where to store your digital funds.
There are hundreds of Bitcoin wallets on the market, some of which can be accessed through mobile apps or desktop software, such as Best Wallet or MetaMask.
You can also store your Bitcoin on a hardware device, such as a Trezor or Ledger, where the Bitcoin is stored offline and cannot be accessed through hacking, however, these physical devices tend to be relatively expensive.
Read our article about the best cryptocurrency wallets for securely storing your coins.
Bitcoin Compared to Other Top Cryptocurrencies
Bitcoin isn’t the only cryptocurrency. Here’s how Bitcoin compares to some other options:
Bitcoin vs Dogecoin
Dogecoin is one of the best performing cryptocurrencies of 2021. The meme coin was created in 2014 as a parody of cryptocurrency but somehow gained popularity and is now the sixth largest digital asset in the world by market cap. Dogecoin’s value comes largely from its community. Celebrity endorsements also help the asset, with the likes of Snoop Dogg, Jason Derulo, and Elon Musk frequently promoting it on social media.
Bitcoin vs Ethereum
Ethereum is the second-largest cryptocurrency by market cap. It is also a compelling investment opportunity, especially as its value has risen significantly in recent years.
Most of Ethereum’s value comes from its use on the Ethereum blockchain — for paying transaction fees, etc. However, its status as Bitcoin’s biggest competitor means it has a large community and significant functional advantages.
Bitcoin vs Litecoin
Both Litecoin and Bitcoin are extremely popular. Launched in 2011, Litecoin was billed as a “lighter version of Bitcoin,” with its founder touting its transaction speed and ability to generate more coins per unit of time.
Litecoin is currently the 20th largest cryptocurrency by market cap as of 2023. It is a popular choice for some investors, being considered a “blue chip” cryptocurrency and traded on all top exchanges and brokerage platforms.
Bitcoin vs Libra
Libra is a planned crypto project from the Facebook-backed Libra Association. At the time of the announcement, the Libra Association explained that the value of the asset would be backed by a basket of the world's most popular fiat currencies. Since then, Libra has undergone a rebranding and restructure, with multiple regulatory pushbacks delaying its launch. Now, it is called "Diem," and the organization plans to launch Diem as a stablecoin in 2021. As of 2023, it has not yet been released.
Where is Bitcoin headed in the future?
Based on the current market conditions, you may be skeptical about investing in Bitcoin. Compared to the opening price of 2022, the price of Bitcoin has fallen below the lowest point in 2022, based on mid-January 2023. Currently, Bitcoin is trading 63% below the highest point. In addition, Bitcoin is predicted to enter another bearish cycle in the fourth quarter of 2023.
However, this does not mean that Bitcoin is dead. Bitcoin has repeatedly proven that it can bounce back, so investors continue to have faith in it - especially those who are in it for the long term. It may take a while for the price of Bitcoin to rebound, but it will happen eventually. It's just a matter of how long you can wait. Another factor that could drive the price of Bitcoin higher is the recent approval of Bitcoin by BlackRock.
When the price of Bitcoin fell from nearly $20,000 to $3,000 in 2018, many people thought that Bitcoin was dead. But it returned, reaching its all-time high in 2021, bringing an annual return of more than 100% to investors at the beginning of the year. One event that could significantly affect the price of Bitcoin is its halving, which is expected to occur in April 2024. Bitcoin price history shows that while the price of Bitcoin will fall when approaching the halving date, it will then recover and set a new all-time high in the following months.
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What is the outlook for Ethereum and XRP in 2023?
The price of Bitcoin in December 2023 is $25,940, based on the monthly chart of Binance BTC/USDT. 2023 is a significant recovery from the bear market in 2022.
Currently, holders in 2023 have received a return of 70% as Bitcoin opened at $16,541 at the beginning of 2023. Many investors believe that the next cryptocurrency bull run may have already begun and will intensify further during the Bitcoin halving in March 2024.
Best Places to Buy Bitcoin
Bitcoin has once again shown the global investment community that it is here to stay. In the past 12 months, Bitcoin has grown in value by more than 10,00% - which is why so many people want to buy Bitcoin now and hold for future gains. Read 30 quotes about wealthy Bitcoin investors, including Elon Musk, Mark Cuban and the Winklevoss twins.
If you are ready to enter the cryptocurrency industry and want to buy Bitcoin immediately, we recommend Coinbase as the first choice, although all the exchanges reviewed in this article are trustworthy.
You should also keep the following in mind:
Please do your research before investing and trading Bitcoin.
When trading or investing, please trade with only registered brokers and exchanges.
You should also check out review sites and online experts’ opinions on Bitcoin.
Resist FOMO and only invest money you can afford to lose.
If you’re interested in Bitcoin alternatives with lower market caps, you can check out our list of the best new crypto assets.
Visit Coinbase
FAQ
How to buy Bitcoin?
There are many ways to buy Bitcoin, although the safest and most convenient method is to use an online broker or exchange.
Should I buy Bitcoin?
Whether or not to buy Bitcoin is your decision. On the one hand, Bitcoin is very volatile and can experience wild price swings on a daily basis. However, Bitcoin is one of the best performing assets in recent years. Given this, make sure to do enough research and maintain a conservative stance.
What is the best way to buy Bitcoin?
If you’re wondering where to buy Bitcoin, your best option is to use a cryptocurrency exchange or broker — we recommend Coinbase as our top choice.
How does Bitcoin work?
Bitcoin is a digital currency without a central bank or
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