Starting with Bitcoin – The Ultimate Guide
You are likely aware of the buzz surrounding the cryptocurrency industry if you keep up with fintech news. While there are many crypto assets worth focusing on and learning about, one is undoubtedly the most popular, and it is Bitcoin. It has been around for nearly a decade, has the highest total market capitalization, and is easily the most well-known amongst the public owing to its skyrocketing BTC to USD value.
So there is a good chance you have heard about Bitcoin, but what do you do if you want to start investing or trading it? If that is the concern you have, you are in the right place. This article will take a closer look at the process of how to start Bitcoin trading. We will look at everything you need to do including using an exchange, getting a wallet, creating a Bitcoin address and more. In order to make it easier, we will break it down into an easy-to-understand process and follow it step-by-step. So without further ado, let us get into the steps.
Step One: Do a Lot of Research
Before actually doing anything related to buying, selling and trading cryptocurrency, you need to do your research and ensure it is something you actually want to do. While all different sorts of investing require research and consideration, this goes double for cryptocurrency.
This is because it is still a very new market and, as a result, it is incredibly volatile. You need to be prepared for the fact that your investment could triple in a week, and then go down 25% the following day. It is about as risky an investment as you can make, so be sure you only invest what you can afford to lose. In addition to that, cryptocurrency at times has been ripe for scams, so be sure that every website, exchange and coin you deal with is legitimate.
Once you have done your research on Bitcoin (or whichever another crypto you are willing to invest in), you are ready to get started in your investment journey.
Step Two: Create a Wallet
The initial step to getting involved with Bitcoin trading is to create a Bitcoin wallet. Your Bitcoin wallet is a digital account that will store your Bitcoin and make it possible to also buy, sell and trade. These can be very quick and easy to set up, and there are several different online wallet providers you can go with. It is up to you to check them all out and see which one works best for you.
However, there are more options available to you than simply using online wallets. In addition to online wallets (also known as hot wallets), there are also offline wallets (often called cold wallets). While hot wallets can be accessed via the internet, cold wallets are stored physically and then plugged into computers. Hot wallets are often easier and more convenient, cold wallets are generally more secure and less likely to be hacked. Both are good options, and you can either choose one to use or utilize both.
Step Three: Decide on the Exchange
Once you have a crypto wallet to hold your Bitcoin, you need to find a place to actually buy some. In order to purchase some cryptocurrency, you will need to choose an exchange to use. There are a variety of exchanges out there that you can use, and each has their own unique trading tools and features. How you choose the exchange is up to you. Some have a lengthier sign-up process, some only offer certain coins, and each will have their own fees and other terms.
We will focus on one of the most beginner-friendly exchanges, which is CEX.IO. When getting started with the platform you need to sign up, verify your account and link a credit card to make your first purchase in no time. This straightforward buying process contributes to CEX.IO being a go-to Bitcoin exchange for people who want to get their feet wet in cryptocurrency. Unlike other exchanges that exclusively work as either a trading platform or a broker, CEX.IO combines both of these approaches and so is a stamping ground for seasoned traders as well. With that in mind, you can go no further than CEX.IO to both start buying and trading Bitcoin.
However, you want to make sure that the exchange you go with works in your country. Several exchanges will only work and be legal in certain countries or areas, so be sure to do your research. Many exchanges will require your passport, a photo, as well as proof that you really are who you are. This is to reduce shady behavior and ensure compliance with law.
Step Four: Complete The Transactions
Once you have your account on the exchange and are completely accepted, you are ready to make your first Bitcoin purchase. When you go into the exchange, there should be an option to buy the currency at the exchange rate. The rate of each exchange may differ a little bit.
Some exchanges will be able to connect right to your bank account to buy Bitcoin directly, while others will require you to send dollars into your exchange account. Once you get the money into your exchange account, you will be able to purchase your Bitcoin.
From there, you can freely buy, trade, sell and hold Bitcoin in your wallet as little or as much as your heart desires. Also, many exchanges and wallets also work with other cryptocurrencies so if you want to branch out into something like Ether or Stellar Lumens, it won’t take as much time or effort as most of the legwork has already been done. While it is possible to hold your crypto on an exchange, we recommend holding them in your private wallet for the best security.