Bitcoin (BTC) is a decentralized cryptocurrency that was initially released back in 2009. Since its release, Bitcoin has continued to grow and has become the most widely adopted cryptocurrency.
By now, it’s difficult to find someone that hasn’t heard of Bitcoin and we’ve all heard the stories about what a great investment it can be. For example, from November 2016 to November 2017, Bitcoin rose from around $730 to over $8,700.
That means that if you had invested in late 2016, you would have seen an 1100%+ increase in your money by late 2017!
So, you may be asking yourself:
How do I invest in Bitcoin?
Well, luckily for you, in this simple guide, I will break down the process from purchasing your first Bitcoin to investing in your first Bitcoin hedge fund! It may sound extremely complicated, but stick with this guide and you’ll see that it is actually pretty simple.
First things first.
How do I buy Bitcoin?
There are several different ways that you can get into Bitcoin (BTC), but I will show you the easiest and most beginner friendly way.
With over 13 million users, Coinbase is the best platform to get started buying your first Bitcoin.
The best part is, if you use the links in this post, we will both get $10 of free Bitcoin!
Step 1: Create an Account on Coinbase
First, go to Coinbase. Then, fill out your information and hit sign up. You’ll get an email asking you to verify your email before proceeding.
Once you verify your email address, you’ll be taken to a screen where you must select your state. After you select your state you’ll finally be taken to your dashboard which should look similar to this:
Set up 2-factor authentication, by clicking on the box that says “Add your phone number” in the bottom left of your dashboard (as shown above). This will help keep your account secure so that hackers won’t be able to access your Bitcoin.
Once you have 2-factor authentication set up, you’ll have to add a payment method. You can do this by clicking on the box that says “Add a payment method.”
Now, you are given two options for types of accounts you can add: Bank Account or Credit/Debit Card.
I highly recommend setting up a bank account as you will avoid some transaction fees and credit/debit cards are limited to $200 a day with new accounts.
Regardless of which payment method you go with, it’s now time for step 2!
Step 2: Buy Bitcoin Through Coinbase
Give yourself a pat on the back, you’ve almost purchased your first Bitcoin (BTC)!
Click on the Buy/Sell tab next to Dashboard near the top of your screen and you’ll be greeted with this screen:
First, select whether you are buying or selling a currency. Here, we are selecting Buy.
Then, select which currency you would like to purchase. Here, we are selecting Bitcoin.
Then, pick the payment method you set up earlier and put in the amount you would like to purchase. You can decide how many BTC you would like or just figure out how much USD you would like to spend. For example, if you want $1,000 worth of Bitcoin (BTC), you would fill out “1000” in the left box titled USD and the system will calculate the rest.
Coinbase also lets you schedule purchases on a recurring basis if you would like to invest in Bitcoin regularly.
On the right hand side, you will notice that Coinbase takes a small transaction fee.
Click Buy Bitcoin and Congratulations! You’ve purchased your first Bitcoin. Depending on the payment method used and a variety of other factors, the Bitcoin should be deposited in your Coinbase wallet within a few days.
If you’ve already done some trading on Coinbase, you may have noticed that they have some pretty high transfer fees.
The reasoning for this is that Coinbase is the best platform for beginners to easily get into Bitcoin. However, if you’d like to lower your transfer fees and add some more tools to your disposal, keep reading!
Less Fees, More Tools
There are a large number of platforms that function as a sort of exchange between Bitcoin and USD. Coinbase is just a tool that is laid on top of an exchange that makes it easy to buy and sell Bitcoin, however, it comes with a fee.
For the purposes of this article, there are three exchanges I would like to bring to your attention, and you should look into the pros and cons of each.
First, Coinbase works on top of an exchange called GDAX. If you’ve already got a Coinbase account set up, head over to GDAX and start setting up an account and you will notice that all of your information is already there. That’s because GDAX is owned by the same company as Coinbase!
GDAX comes with much lower transaction fees and because of the integration with Coinbase, is probably the easiest to set up.
I personally prefer a platform called Gemini because it has the lowest fees in the industry and has a beautiful dashboard that makes it very easy to use.
Up for honorable mention is BitStamp. BitStamp also has a simple to understand interface and seems to have some of the fastest transactions.
Ultimately, the choice is up to your own personal preference!
Word of caution: These exchanges can be a bit difficult to understand for beginners. I highly recommend you read a guide (like this one) that explains different types of market orders. The concepts at play here are very much the same as the stock market.