Unless you have been living under the rock, you will agree that cryptocurrency is presently the new trend in town. Many people are getting into the crypto space for different reasons. While some people want to buy Bitcoin and use it as a store of value, others are trading it to make fast and easy money. At the same time, some crypto enthusiasts are simply buying Bitcoin to be part of the wonderful future ahead of them.
But whatever your reason for choosing to buy Bitcoin, you should know cryptocurrency is highly volatile and should be approached with utmost caution. If you are coming to the crypto space for the first time and want to buy Bitcoin, these are some tips you should pay attention to for the best experience.
5 Tips for Buying Your First Bitcoin
#1: Understand what crypto wallets are and have one on standby
Like your traditional bank account that helps you store your fiat currency, you will also need a cryptocurrency wallet to store your Bitcoin. That means before you consider buying Bitcoin at all, you need to first have a wallet on standby. But there are different types of wallets; hot wallets and cold wallets. Knowing what each of them is will help know which is perfect for you.
If you are buying a small amount of Bitcoin and probably plan to use it in the short term, a hot wallet is okay for you. These types of wallets need an internet connection to work. They are easy to run and usually don’t cost as much. However, they are more prone to theft and hacking because they are connected to the internet.
Other types of crypto wallet are a cold wallet. These types are physical wallets and tend to be more secure. They are perfect for storing huge sums of Bitcoin and also for a long time. They are less prone to hacking because they don’t require an internet connection to work. But they are more expensive.
So first do your research and know which wallet type is good for you. Then decide on which wallet maker to go with. Some examples of hot wallets are Coinbase wallet, Edge, Electrum, Trust, Robinhood, Exodus, Mycelium, etc. Cold wallets also include Ledger Nano, Trezor, CoolWallet Pro, KeepKey, SafePal S1, etc.
Nevertheless, don’t be tempted to want to buy and keep your Bitcoin on the exchanges. This is a very risky decision because they are most vulnerable to hackers. If anything happens to the exchange platform, then you will lose all your coins without any solution.
#2: Do not be tempted to buy in a rush
This is one of the most common mistakes crypto beginners usually make. Don’t rush to buy Bitcoin because your friends or celebrities on social media are talking about it. Do not rush to buy because they are giving testimonies of how high it’s rising. That is what is called the Fear of Missing Out (FOMO). Don’t fall for it.
Any coin after a sharp rise will most likely come back down. So it is recommended that you wait to buy when the price is low. That way, you will be able to make the most out of your investment and will also be able to invest safely.
#3: Choose a reliable purchase method when buying
There are different purchase methods available to you when buying Bitcoin. You can decide to buy from a peer, Bitcoin ATM, broker, or from a crypto exchange. And each of these methods has its own unique payment methods. If you will be investing in Bitcoin to join the crypto wagon, you will need to choose a platform with the most convenient payment method for you.
If you are trading, you don’t have to buy your coins from the same platform on which you want to make trading, especially if you are not convenient with the payment method. You can consider a platform like Anycoin Direct for buying your Bitcoin. The platform has several options for making purchases, including debit and credit cards, and with less commission.
#4: Have a solid strategy for crypto trading
This is particularly important if you are buying Bitcoin for trading purposes. With the recent rush in the cryptocurrency community, it can be difficult to filter genuine crypto from scams. You don’t want to lose your money to some coins that seem promising but have scam ideology at its root. So, when you are being bombarded with a lot of information about a coin, take a step back from the hype.
You may not have so many issues of scam when trading Bitcoin, but chances are that you can lose your money if you don’t have a solid trading strategy in place. So before you buy and invest, learn a few things about Bitcoin. Know the problems it solves. Understand its use cases and many more.
#5: Buy only with the money you can spare
Cryptocurrency is not for the desperate; it doesn’t always end well with them. Don’t be among the people that sell everything possible to buy Bitcoin. Don’t sell your house, your car, or kidney to buy Bitcoin or any other cryptocurrency.
Bitcoin is highly volatile. Anything can happen in the next minute. While you may be lucky to earn double your investment in little time, you can also lose all in the next minute due to a sharp drop in price. It is not worth the risk. So only buy with the money you know you can spare.
Don’t fall for frivolous success stories. Instead, be patient with yourself. Gain experience and invest wisely and safely.
Buying Bitcoin to join the cryptocurrency community is one of the best things you can do for yourself at this time. Cryptocurrency is the future, and you need to position yourself well to be part of the future. However, you should know that crypto trading and investment is a tricky terrain so you should thread with utmost care. If you are buying Bitcoin for the first time, these tips mentioned here will guide you to have the best experience.