How To Buy Bitcoin On The Stock Market
Bitcoin investing can somewhat seems complicated for those who don’t know much about cryptocurrency. But the reality is it’s actually not that difficult to comprehend, today a lot of businesses, banks, even regular Joes are profiting from Bitcoin and looks like the future for Bitcoin investment seems to be increasingly promising as more and more people put their trust into this digital currency.
That said, Bitcoin investment also comes with a risk, since its value relies a lot on factors such as public interest, faith of investors, its performance against other cryptocurrencies, as well as its implementation in financial markets. All of these factors make Bitcoin investment quite speculative, and everything can change significantly overnight positively or negatively. So when you join the game, don’t just prepare yourself to win big, but also prepare to lose big, that’s why it’s important to have at least some basic knowledge of Bitcoin before you decide to invest in it.
Just a little over a decade ago it’s almost impossible to find anyone who believes that a digital currency formed by lines of code like Bitcoin could worth thousands of dollars. But today obviously it’s not a surprise anymore, in June 2020, 1 Bitcoin is worth more than $9,600. So what makes Bitcoin has such high value? Find out more about how the bitcoin stock price works: “https://www.smartbitcoininvestments.com/bitcoin-stock/”.
It is true that the lines of code that formed each Bitcoin is basically worthless, they are just code. However, as time passes and with all the dynamics of the currency, markets decided to value Bitcoin at thousands of dollars. Now there are many factors causing markets to give such high value to it, one of them is the fact it has a much lower transaction cost as compared to credit cards and far more secure as well.
Another thing that makes Bitcoin valuable is due to its scarcity. Just like gold, Bitcoin cannot be produced, it can only be retracted from a mine, in this case it’s a digital mine. Being a non-renewable material, as more and more Bitcoin are retracted from the digital mine, the more difficult it is to obtain new Bitcoin. The limit of the total number of Bitcoin is set to 21 million by its creator Satoshi Nakamoto. So when the maximum number is reached, there will be no more Bitcoin to retract, and that makes it valuable.
The supply and demand rules also affect its value. When the demand for Bitcoin is higher than its production (mining) rate, the price will go up, and vice versa. Its value is also affected by the number of people using it in transaction or as investment.
To conclude, as explained in the introduction, the value of Bitcoin relies on factors such as public interest, faith of investors, its performance against other cryptocurrencies, as well as its implementation in financial markets.
Unlike conventional currencies, Bitcoin is a decentralized currency that doesn’t have to go through banks or any financial institutions to verify and record its transaction. Instead, its transactions are recorded on a public ledger built with blockchain technology. This transaction verification method performed within the blockchain has pretty much the same principals as what’s being performed in banks or credit card companies, but with extremely lower cost.
Investing In BitcoinIn 4 Simple Steps
So now that you know a bit deeper about Bitcoin, let’s find out how you can start investing in Bitcoin. There are a few things that you need to prepare before you can start you Bitcoin investing journey; a digital wallet, personal ID, a reliable Internet connection, a payment method, and a verified account in a Bitcoin exchange.
Step 1: Get a digital wallet
Generally you have two options when it comes to choosing your Bitcoin wallet, there are software wallets and hardware wallets. Software wallets are considered to be much more practical as they provide quick and easy access to your Bitcoin. However, they are considered to be less secure because these wallets actually put your money in third-party companies.
Hardware wallets on the other hand are offering more security since they are kept offline. With these wallets, your Bitcoin private key will be stored in a physical hardware that can prevent hacking.
Step 2: Connect your funding source
Choose your preferred way of funding your Bitcoin investment, either credit card, debit card, or bank account, and connect it to your Bitcoin wallet. Each payment method has the same function, but they are slightly differing in terms of fees and verification process. When using a credit card, the verification process could be completed almost instantly and you can make your Bitcoin purchase right away, but the fees are quite high. When you use bank account to fund your Bitcoin purchase the fees will be much lower, but the verification process could take 3-5 days to complete. Since the fees are usually calculated based on the percentage of your transaction, if you’re purchasing Bitcoin in large amount you can save a lot by using bank account to fund it.
Step 3: Register on a Bitcoin exchange
Just like when you want to invest in stock, you need to purchase it in a stock exchange, well the “stock exchange” for Bitcoin is the Bitcoin or cryptocurrency exchange. This exchange is the place where you can exchange Bitcoin for conventional currencies like Dollar, Pound or Euro.
It’s not difficult to find a reputable Bitcoin exchange, there are so many of them. No matter where you are in the world and whatever currency you’re using there is always an exchange that can cater your need. If you are new to Bitcoin trading, it’s a good idea to find a platform that is beginner-friendly like eToro. This exchange is a great trading place for experienced traders, but at the same time also provides an easy-to-use platform for beginners who are still learning their way around Bitcoin trading.
Step 4: Make your purchase
When everything is set, then what’s left is to make the purchase. Don’t worry, even though you don’t have thousands of dollars in your account you can still buy Bitcoin. That’s because Bitcoin can actually be divided into smaller units even up to eight decimal units. Many Bitcoin exchanges allow you to buy Bitcoin in small units, so no matter how much money you have you can always start your journey as a Bitcoin investor.