8 Things You Should Know About How To Invest in Bitcoin

Figure Out Where to Buy Bitcoin

Now that you understand what Bitcoin is, you can begin to figure out where to buy the cryptocurrency. We suggest you start by looking at Bitcoin ATMs.

BATMs are like standard ATMs that you can use to sell and buy Bitcoin. As Bitcoin becomes increasingly popular, more will pop up in cities near you. 

You may also be able to buy Bitcoin from exchange-traded funds (EFTs). You could also buy Bitcoin directly through peer-to-peer purchases. However, this might not be as safe. 

Get a Wallet

Before you can purchase Bitcoin, you’ll need a  crypto wallet to put it in. You will store all of your cryptocurrencies in this wallet. There are two types of wallets you can get: a hot or cold wallet.

If you get a cold wallet, this is one of the safest places to store your coins. It’s an actual piece of hardware in which you will hold all of your coins, and it looks like a flash drive. Most cold wallets will cost anywhere between $60 to $100. 

A hot wallet is a digital wallet operated by a cryptocurrency exchange or another provider. These exchanges will give you a wallet when you open your account. They’re convenient, and you can access them anywhere if you know the password.

However, because they’re digital, they are susceptible to being hacked if you’re not careful. For a reliable cryptocurrency wallet alongside secure fiat, and crypto banking services download ByteWallet.

Be Careful of Unit Bias

When investing in cryptocurrency, you must also be careful of unit bias. Not all coins are created equal when it comes to cryptocurrency.

There are thousands of crypto coins out there, and some are trying to imitate Bitcoin. However, even with Bitcoin, you can determine the coin’s value by asking what purpose for which innovators created the coin.

What was it used for? Who’s working on it? How big is the community?

Read Crypto Whitepapers

If you’re still unsure if Bitcoin is a good investment, read the Bitcoin whitepaper for yourself. If you find yourself  still intrigued, check out The Bitcoin Standard by Saifedean Ammous. While word of mouth is good information, it also helps to read research on it.

Before investing in Bitcoin or any coin, make sure you read their whitepapers. Every cryptocurrency project should have a whitepaper that is easily accessible, online. If you come across a crypto coin that does not have a published whitepaper, it is a huge red flag that you shouldn’t invest in that cryptocurrency.

The white paper should tell you how the project’s developers intend the coin to work, have a time frame, and give specifics about the project. 

If there’s no data or plan for the coin, it may not be a good investment. If the whitepaper feels misleading or incomplete, this could mean that there are other issues with the project. However, you should be able to read Bitcoin’s information online easily.

Know About Investor Protections

You want to ensure that your Bitcoin investment is also protected. Unfortunately, Bitcoin and other cryptocurrencies are uninsured by the Securities Investor Protection Corporation.

That means, no losses are covered in the event of an exchange failure or a theft. However, any transactions made through a traditional stock brokerage account, will be protected for up to $500,000. 

Some cryptocurrency exchanges offer private insurance, but this doesn’t protect you from individual breaches, like if someone hacks into your account. 

So just to be safe, you’ll want to ensure that wherever you buy Bitcoin, you have some level of protection.