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Investing in Bitcoin (BTCUSD) could seem complicated, however it's simpler when you simplify it by smaller steps. In order to invest or trade Bitcoin does not require an account with a company or exchange. additional storage methods that are safe are advised.There are numerous things future Bitcoin investors need an account with a cryptocurrency exchange as well as personal identification documents, when you use an Know Your Customer (KYC) platform with a secure connection the Internet as well as a method for payment. It is recommended to have a personal account outside of the exchange account. Payment methods that are accepted on this route include bank accounts that accept debit cards, as well as credit cards. There is also the option to get bitcoin at specialized ATMs and via P2P exchanges.KEY TAKEAWAYS"The worth of Bitcoin is derived from its adoption as a store of value and payment method in addition to its limited supply as well as the decreasing inflation.* Although it is nearly impossible for Bitcoin itself to be hacked however, it is still possible for your wallet or exchange accounts to become compromised. This is the reason that implementing appropriate storage and security precautions is vital.You can also purchase bitcoin through mainstream services like PayPal? or Robinhood.* One way to own bitcoin in indirect ways is to invest in businesses that have bitcoin in their balance financial statements.Before You Buy BitcoinSecurity? and privacy is one of the major issues with regard to Bitcoin investors. Anyone who acquires the private key to the public address that is on the Bitcoin blockchain can then authorize transactions.1 Private keys must be kept private as criminals could attempt to take them away should they learn of massive amounts. You should be aware that anyone is able to be able to see the balance at a public address you use. The downside to these public records is that it allows an individual to establish multiple public address for themselves. So, they can share their stash of Bitcoin over many addresses. A great strategy is to place large sums of money on public addresses that are not directly linked to addresses that are used in transactions.Anyone can access a history of transactions that have been recorded on the blockchain--even you. Although transactions are publically recorded on the blockchain, user information is not. With the Bitcoin blockchain there is no public key is visible next to an activity, which makes transactions secret but not secure. In that way, Bitcoin transactions can be more easily traceable as compared to cash because all transactions are public viewing, in contrast with private cash transactions. But Bitcoin transactions also come with an element of security built in their structure. It's difficult for anyone to trace the transactions of the parties--i.e., the person who sends and receives the bitcoin--on the cryptocurrency's blockchain.Researchers from around the world and the FBI have claimed that they could track transactions made on the Bitcoin blockchain and connect them to different online accounts, like their digital wallets.2 For instance, if one creates an account with Coinbase they will need to supply their identification.3 After that, when the person makes a purchase on Coinbase, it is linked to their account. When they transfer it to another wallet, it may still be traced back to the Coinbase purchase , which is linked to the account owner's identity. This shouldn't be a problem for most investors , as Bitcoin can be legally used in the U.S. and most other advanced countries.You should be sure to verify all the regulatory, legal, and tax regulations for buying and selling bitcoin in the region where you reside prior to making a transaction.Buying BitcoinWe? have simplified the steps of buying bitcoin below. Remember that you still need be able to research the market and decide on the best option depending on the specifics of your situation.Step 1: Choose an exchange service for crypto or venueThe first step in buying bitcoin is selecting the right crypto trading service or a venue. Most well-known venues and trading services for purchasing cryptocurrencies include cryptocurrency exchanges, payment services and brokerages. From these, cryptocurrency exchanges offer the most practical alternative because they have a number of features and crypto currencies to trade.Signing up for a cryptocurrency exchange will enable you to buy, sell, and keep crypto. It is generally recommended to go with an exchange which allows its users to transfer cryptocurrency to their personal online wallet for safekeeping. If you're planning to trade Bitcoin and other cryptocurrencies this feature might not be relevant.There are numerous types on cryptocurrency exchanges. Since the Bitcoin principle of personal sovereignty and decentralization, some exchanges permit users to remain anonymous and do not require users to enter the personal details of their users. These exchanges operate on their own and are usually decentralized which means that they don't have a central point of control.Although such systems can serve evil purposes, they also provide services to the world's unbanked population. Certain categories of people -- refugees or those living in countries with little to no infrastructure for government credit or banking -- anonymous exchanges can integrate them into the mainstream economy.Right now, however, all of the top exchanges in the world are in a decentralized manner and are subject to laws that need users to present identifying documents. In the United States, these exchanges include Coinbase, Kraken, Gemini, FTX, and Binance.US just to mention a few. These exchanges have increased in the number of options they offer.The crypto universe has grown rapidly over the last decade as a number of new coins have been offering investor dollars. Except for Bitcoin as well as a few prominent coins, such as Ethereum there are a few exceptions to the fact that not all the tokens listed are on all exchanges. Each exchange has its own set-of criteria for determining whether it is appropriate to include or exclude trading of certain tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a steady stream of altcoins. These three are possibly the easiest on-ramps to crypto in the whole market. Binance is designed for the more advanced trader, and offers the most sophisticated trading features and an increased variety of altcoin options. FTX is a booming crypto exchange that has a multibillion-dollar valuation, offers limited number of altcoins to U.S. investors.4 However, investors outside of their home country of the U.S. have a greater range of cryptos available on its platform.The most important thing to remember when setting up an account on a cryptocurrency exchange is to make use of secure Internet practices. This includes two factor authentication and one long, unique password that can include a variety of lowercase and capitalized letters along with special characters and numbers. https://www.openlearning.com/u/jennycoduti-r71gk6/about/?share=1 made Bitcoin legal tender on September 7, 2021. It was the first nation to do so.5 The cryptocurrency can serve as a means of payment for all transactions that a business is able to accept it. There is no substitute for the U.S. dollar continues to serve as El Salvador's main currency.Step 2. Connect your exchange to the payment optionAfter you have chosen an exchangeoption, you'll need to gather your personal documents. If you are using an exchange, the documents could include a photo of a drivers license or Social Security card, as in addition to information about your employer and the source of funds. The information you'll require will depend on the area that you reside in as well as the regulations within it. The process is in general the same as creating a typical brokerage account.After the exchange has verified the authenticity of your account, you will be asked to join a payment option. On most exchanges you can connect to your bank account without a hassle or connect a credit or debit card. While you are able to use a credit card to purchase cryptocurrency, it is unwise because it could cause volatility in the cost of buying the coin.Bitcoin exists in legal form in United States, but some banks may question or even block deposits to crypto-related websites or exchanges.6 It is best to do a little research to ensure that your bank allows deposits to the exchange you have chosen.There are various charges for deposits through bank accounts debit or credit card. It is essential to study the fees that are associated with each option of payment to help choose an exchange or to decide which one works most effectively for you.Exchanges may also charge fees for each transaction. The fees could be an unrestricted fee (if the amount traded is too low) or as a percentage from the trading amount. Credit cards are charged the processing cost in addition to transaction fee.Step 3: Place an orderYou can purchase bitcoin (or other cryptocurrencies) by selecting an exchange and linking a payment option. In the past few years bitcoin exchanges have steadily become more widespread. They have grown significantly in terms of liquidity as well as their range of features. The operations of cryptocurrency exchanges are in line with the shift in the way people perceive cryptocurrencies. A sector that was previously thought to be a fraud or with questionable techniques is slowly changing into an authentic one, which has attracted attention from all the big players in the financial sector.Today, cryptocurrency exchanges have reached a stage where they're able to provide nearly the exact quantity of features available as their counterparts in stock brokerage. Today, cryptocurrency exchanges offer numerous types of order and investment options. Most exchanges in the crypto space offer both market and limit orders. Some also offer stop-loss options. The exchanges listed above, Kraken offers the most different types of orders. Kraken lets you place market, limits, stop-loss orders, stop limit takes-profit, take-profit and limit orders.7Apart from offering a variety of kinds of orders, exchanges provide the option of setting up indefinite investments, allowing customers to create a dollar-cost-average into their investment options. Coinbase is one example. It lets users set recurring transactions for each day, week, or month.8Step 4: Safe storageCryptocurrency and Bitcoin wallets are an opportunity to save digital assets in a more secure way. Being able to store your cryptocurrency away from the exchange and within your own wallet will ensure that only you control the private key that you have to your funds. This gives you the option of keeping your money away from an exchange , and reduce the possibility of your account being hacked and causing loss of funds.Though most exchanges provide the option of wallets for their users security is not their primary business. We do not generally recommend using an exchange wallet to manage significant or long-term investments in cryptocurrency.Certain wallets feature more options than others. Some are Bitcoin only, and others are able to hold several types of altcoins. Some wallets also offer the possibility of swapping one token with another.If you're looking to pick an Bitcoin wallet, you have several options. The first thing you will have to be aware of about crypto wallets is the notion of hot wallets (online wallets) and cold wallets (paper or hardware wallets).Hot walletsDigital wallets also known by the name of hot wallets. Hot wallets are those that run through Internet-connected devices like phones, computers, or tablets. They can be vulnerable because these wallets create the private keys that you use to access your funds using these devices that are connected to the Internet. Although a hot wallet may prove extremely beneficial in the way it lets you access and conduct transactions on your funds quickly, the storage of your private keys with an internet-connected device makes it more vulnerable to attack.This may sound ridiculous However, those with hot wallets who haven't set up enough security run the risk of being robbed of their funds. This is a frequent incident, and it can occur in several ways. For instance, boasting on a public forum such as Reddit about how much bitcoin you own while you're using little to zero security and placing it in a hot wallet would not be smart. Although, these accounts can be made secure so it is taken care of. Secure security measures, such as two-factor authentication, and secure Internet browsing should be considered the minimum prerequisites.They are great for smaller amounts of cryptocurrency or cryptocurrency you're actively trading on an exchange. You can compare a hot wallet to a checking account. Financial wisdom is generally believed that you should keep your money only for spending in a checking account , whereas the bulk of your money can be found in savings accounts and other investment accounts. Similar advice can be made of hot wallets. Hot wallets include mobile desktop, web and exchange accounts custody wallets.As mentioned previously, exchange clients are custodial wallets that are offered by the exchange. The person who uses this wallet type is not the holder of the key private to the cryptocurrency in the wallet. If an incident were to occur that the exchange damaged or your accounts are compromised, you would lose the funds you have invested. The expression "not your key, not your coin" is heavily heard in cryptocurrency forums, and communities.<img width="416" src="">Cold walletsThe simplest way to describe a cold or cold-weather wallet is that it's not connected to the Internet which means it is at a far lesser risk of being affected. These wallets may also be described as offline wallets or even hardware wallets. They keep a user's private keys on a device that is not connected to the internet. They can also come with software operating in parallel so that the user has access to their portfolio without placing their private key at risk.One of the safest ways to store your cryptocurrency offline is to use a papier wallet. Paper wallets are digital wallet that is created from specific websites. It then generates private and public keys that are printed out on paper. The ability to access cryptocurrency in these addresses is only possible when you possess the piece of paper with the private keys. Many people laminate these paper wallets , and then store them in safe box at their bank or even in a safe at home. These wallets are designed for longer-term, secure investments as you are unable to swiftly sell or trade bitcoins stored in the way.The most commonly used type of cold device is a hardware wallet. A hardware wallet is usually made up of a USB drive that is used to store the user's private keys offline. Hardware wallets have significant advantages over hot wallets as they are unaffected by viruses that can affect one's computer. Hardware wallets ensure that private keys will not be in contact with your network-connected computer or potentially vulnerable software. These devices are typically open source, allowing the community to evaluate their security via audits of code rather than a firm declaring that they're appropriate for usage.They are by far the most secure way to store bitcoin or other cryptos. But they require a greater amount of technical knowledge to set up.A good way to set your wallets would be to have three things that you need: an exchange account for selling and buying, a hot wallet to keep small to medium amounts of crypto which you'd like to trade sell, and a cold hardware bank account to store larger amounts over a longer period of time.How to Buy Bitcoin With PayPalBitcoin? can also be bought via the payment processor PayPal? Holdings, Inc. (PYPL). There are two methods to buy bitcoin through PayPal?. The first and most practical method is to buy cryptocurrencies by using your PayPal? account, which is linked to a payment device that accepts deposit card or a bank account. Another option is to utilize the balance in account balances in your PayPal? account to buy cryptocurrencies from a third-party provider. This isn't as easy as the first since only a handful of third-party sites allow users to purchase bitcoin with this PayPal? button.Four cryptocurrencies--Bitcoin, Ethereum, Litecoin, and Bitcoin Cash--can be purchased directly through PayPal?.9 With the exception of those who live in Hawaii, residents of all states can either use their existing PayPal? accounts or set up new ones. You can also use the cryptocurrencies you have to buy items and services with PayPal?'s "Checkout With Crypto" feature.10To set up a bitcoin account through PayPal? you need the following information is required such as name, physical address or address, birth date or tax identification number.11It is not possible to use credit cards to buy Bitcoin using PayPal?. While you are buying the Bitcoin, PayPal? will display a price for the cryptocurrency. The price, however, is subject changing rapidly due the volatility of the cryptocurrency market. It's best to make sure you have more money than the amount which you budgeted in your bank account.When you purchase bitcoin directly from PayPal? and it earns money from the crypto spread. This is the difference between Bitcoin's price in the market along with its currency exchange with USD. The company will also charge a transaction fee for every purchase. The fee is based on the dollar value of the purchase. For instance the flat rate of $0.50 is applicable for purchases that are between $100 and $200. After that, the charge is proportional to the overall dollar amount. For instance, a fee of 2 percent on the total amount is paid for purchases in the range of $100 to $200.12One drawback of purchasing cryptocurrency via PayPal? is that you aren't able to transfer the cryptocurrency out of the Payment processor's own platform. Therefore, it's possible for you to transfer your bitcoin purchase from PayPal?'s wallet into an additional crypto wallet or your personal wallet.11The third disadvantage of PayPal? is that a small number of trader and exchanges accept payments through the PayPal? processor to make payments. eToro is among the few online marketplaces that allow PayPal? to be used on PayPal? to buy bitcoin through its platform.13How to Buy Bitcoin With a Credit CardThe? process of buying bitcoin using credit cards will be similar to the process for purchasing it via debit cards or via electronic clearinghouse (ACH) and transfers. You'll need to input your credit card's details with the online trading or exchange firm and authorize the transaction. However, generally speaking, it's not a wise decision to buy bitcoin using credit cards. There are several reason for this.First, some exchanges do not allow bitcoin purchases using credit cards due to associated processing fees and the risk of fraud. This choice could be for the benefit of the customers. This is because credit card processing could be able to add additional charges to transactions. Thus, as well as paying transaction fees, you will end up being charged processing fees which the exchange might pass on to you.The second reason is that the purchases made using credit cards are expensive. Credit card issuers consider bitcoin purchases as cash advances and are able to charge large fees as well as interest rates for such advances. For example, American Express and Chase each count cryptocurrency purchases in cash-advance transactions. Thus, if it is possible to purchase 100 dollars worth of bitcoin with an American Express card, you have to pay an amount equal to $10 (current cash advance fee applicable to these transactions) and an annual rate of 25 percent. Additionally, the credit card provider also restricts customers to only $1,000 worth of bitcoin transactions per month.14An alternative to buying bitcoin with a credit-card is to acquire one of the Bitcoin reward card. They function just like your typical rewards credit , but they reward you in the form of bitcoin. This means that they invest cash back from purchases into Bitcoin. One example of one Bitcoin rewards card could be called the BlockFi? Bitcoin Rewards Credit Card.15 Beware however, that the annual fees associated with these cards could be high and could also come with additional charges for the conversion of fiat currencies to crypto.Although exchanges like Coinbase or Binance remain among the most popular ways to purchase Bitcoin however they are not the sole option.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Individuals can plug cash into a machine and use it to purchase bitcoin. Bitcoin is then transferred to online wallets of users. Bitcoin ATMs are becoming more famous in recent months. Retail giant Walmart Inc. (WMT) is conducting a test program that provides customers with the possibility of buying bitcoin. Coin ATM Radar can help in locating the nearest ATMs.However, ATMs are an expensive alternative. There are two expenses associated with ATM bitcoin purchases: a purchase fee and one for conversion fees to convert Bitcoin into fiat currency. Both are quite high when compared with other options. For instance, worldwide, the average purchase fee that Bitcoin ATMs charge is 8.4% (of the purchase amount) and 5.4 percent for sales at ATMs.16Be aware, however, that Bitcoin ATMs increasingly require government-issued IDs from early 2020.P2P exchangesUnlike decentralized exchanges, which meet sellers and buyers in a non-public way as well as facilitate all aspects of the transfer, there's a few peer-to-peer (P2P) exchanges which facilitate a faster communication between users. LocalBitcoins? is an example of such an exchange. Once an account has been created, customers can post their requests to purchase bitcoin or sell it, with details about payment methods and costs. After that, they can browse through the lists of buy and sale offers and select the trade partners who they would like to conduct business.LocalBitcoins? provides a variety of benefits to trading. Although P2P exchanges do not offer the same level of anonymity as decentralized exchanges do, they offer users the opportunity to shop around to find the best price. Most of these exchanges offer rating systems to ensure that users are able to assess potential trade partners before making any transactions.Mainstream brokeragesVery few mainstream brokerages offer bitcoin-based trading and purchasing capabilities because of the uncertainty around how cryptocurrencies are regulated. Robinhood Markets, Inc. (HOOD) A mobile app very popular among investors from retail, is one of the exchanges that offer cryptocurrency trading options. It charges 0% commission for cryptocurrency trades and purchases . It makes money from the flow of orders, transferring its trading volume to others trading platforms or brokerages.17The absence of a commission fee is a tempting option especially for people who are just beginning, but there are a couple of disadvantages to this offer. The first is that Robinhood can't offer the breadth of features and currencies offered by prominent crypto exchanges like Coinbase. Robinhood was able to allow trading on its platform for seven cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 But, in contrast, you can exchange more than 100 cryptocurrency through Coinbase.19 The exchange also offers various order types to lower the risk and reduce losses in trading.The Robinhood platform does not offer a hosted wallet. Thus, if your goal is the purchase of cryptocurrencies via Robinhood the platform, you'll have to take into consideration additional expenses for an online wallet provider.Bitcoin and different cryptocurrency investments aren't covered by insurance under SIPPC. Securities Investor Protection Corporation (SIPC). The regular brokerages of the firm is responsible for the loss of cash and securities brokerage accounts with a maximum of $500,000and a $250,000 cash limit.20 This facility isn't accessible to clients of exchanges for cryptocurrency. Cryptocurrency exchanges like Coinbase are covered by insurance against crime to guard their infrastructure against hacks. However, that policy does not guarantee protection for individual customers against password theft.21How to Sell BitcoinYou? can sell bitcoin in the same places where you purchased the cryptocurrency for instance, cryptocurrency exchanges and P2P platforms. In most cases, the process for selling bitcoin through these platforms is similar to the process of purchasing it.For instance, you might just need to click the button and choose an order type (i.e. how much, if the cryptocurrency should be sold instantly at the lowest price, or whether it is sold to reduce losses) to make the sale. Depending on the market composition and the level of demand at the site, the offering price for Bitcoin may vary. The example is that exchanges in South Korea traded bitcoin at an amount that was referred to as kimchi during the escalating price of Bitcoin in the year 2018.Exchanges for cryptocurrency charge a percentage of the crypto sale amount in fees. For example, Coinbase charges 2.49% from the total transaction amount as fees.22Exchanges typically have daily and monthly withdrawal limits. Therefore, the proceeds from an enormous sale might not be accessible immediately to the trader. There are no restrictions on the amount of crypto you can sell however.What Are the Steps for Purchasing Bitcoin?The process for purchasing bitcoin is comprised of four steps: selecting a venue or exchange to make your purchase, selecting a payment method and then making sure you have a safe place to store of your bitcoin purchase. Depending on the place you have chosen for the first step, there are additional steps needed in the procedure. In the case of Robinhood, for instance, if you purchase the cryptocurrency through Robinhood it could be necessary to include additional costs in order to have an online bank account and custody of your bitcoin as it does not offer these services.What Are the Most Popular Venues for Buying Bitcoin?The most widely used venues to buy bitcoins are exchanges, brokerages (crypto or mainstream) and payment companies like PayPal?. You can also buy Bitcoin via P2P exchanges. If you want to own bitcoin indirectly you can invest in companies that have the cryptocurrency in their bilan sheets, including Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Typicallyspeaking, the cost of buying bitcoin includes a fee per trade plus the cost of conversion of a foreign currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment solutions make money off of this conversion spread.) The price per trade is dependent on what amount in dollars is the trade. A higher trade amount will result in higher costs. The cost of the purchase depends on the services offered by the company. For example, Robinhood does not currently provide an online account for depositing bitcoin. So, you'll need to budget for online wallet costs for your purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?Bitcoin can also be purchased at the following places:* Through Bitcoin ATMs* Through online payment providers such as PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?Yes, your bitcoin purchase is not protected by SIPC.20 At certain exchanges, like Coinbase, fiat balances in personal accounts could be FDIC-insured in the amount of $250,000 per account.21The Bottom LineThe? process of purchasing bitcoin is slightly more complicated when compared to purchasing traditional equity or stocks. This is due to the cryptocurrency's ecosystem and infrastructure aren't as advanced like the ones used in mainstream trading.A process to purchase bitcoin consists of four steps: deciding on the service or the location of making the transaction, connecting to an acceptable payment method, making an order, and making sure you have secure storage for the purchased cryptocurrency. Each step involves a lot of research and careful analysis of both the pros and advantages of each one. You can also buy bitcoin through Bitcoin ATMs, as well as from payment services like PayPal? and the major brokerages like Robinhood.