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Making investments in Bitcoin (BTCUSD) can seem complicated, however it's much simpler if you take it apart into steps. Making investments or trading Bitcoin only requires an account with a company or an exchange. other safe storage practices are advised.There are a few things hopeful Bitcoin investors need such as a cryptocurrency exchange account or personal identification document If you're using the Know Your Customer (KYC) platform and a secure connection to the Internet and a means for payment. It is also recommended that you keep a personal account outside of the exchange account. Methods of payment that work with this option include bank accounts or debit cards as well as credit cards. There is also the option to access bitcoin ATMs at special locations and through exchanges P2P.KEY TAKEAWAYS"The value" of Bitcoin is due to the fact that it is a popular store of value and payment method and its limited supply and decreasing inflation.Although it's almost impossible to for Bitcoin to be compromised, it is possible for your exchange or wallet Account to fall victim to a hack. That's why using secure safeguards and storage is crucial.* You can also buy bitcoin via mainstream services such as PayPal? and Robinhood.* One option to acquire bitcoin is to invest in companies that hold bitcoin in their balance reports.Before You Buy BitcoinThe? security and privacy of your information are critical concerns security and privacy are important concerns for Bitcoin investors. Any person who gains the private password to a publicly accessible address to the Bitcoin blockchain is able to approve transactions.1 Private keys should be kept private as criminals could attempt to steal them should they learn of massive accounts. It is important to be aware that anyone can view the balance of a public address that you have. The other side of this public information is that individuals can set up multiple public addresses for themselves. This allows them to spread their wealth of Bitcoin across multiple addresses. It is a good idea to place large sums of money on public addresses that are not specifically linked to accounts that are used in transactions.Anyone is able to see a complete history of transactions recorded on the blockchain, even you. Though transactions are publically documented on the Blockchain, identifying individual information about the user isn't. While on the Bitcoin blockchain there is no public key appears alongside the transaction, making transactions private but not confidential. However, transactions are not. In this regard, Bitcoin the transactions appear more clear and traceable than cash since all of they are accessible for public view, unlike private cash transactions. However, Bitcoin transactions also have an element of anonymity built by their very design. It's very difficult locate the transaction parties--i.e. the receiver and sender of bitcoins--on the cryptocurrency's Blockchain.International researchers and the FBI have stated that they can track transactions made on the Bitcoin blockchain back to users' other online accountsas well as their digital wallets.2 For instance, if someone creates an account on Coinbase they have to verify their identification.3 This means that when that buyer purchases bitcoin, it is linked to the account holder's name. If they transfer it to the other account, it's possible to remain traced back to the Coinbase transaction which is linked to the account holder's identity. The issue should not bother most traders since Bitcoin has been legalized in U.S. and most other developed countries.Be sure to research whether there are any legal or regulatory, as well as tax-related status of purchasing and selling bitcoins where you reside before you make any transactions.Buying BitcoinWe?'ve explained the steps for purchasing bitcoin in the following steps. Be aware that you need to conduct your own research and pick the most appropriate option for the circumstances you face.Step 1: Select an exchange service for crypto or venueThe first step to purchase bitcoin consists of choosing a crypto trading company or venue. Popular venues for trading and platforms for buying cryptocurrencies are cryptocurrency exchanges, payment providers, and brokerages. In all of them, cryptocurrency exchanges are the most reliable option due to their breadth of features and more different cryptocurrencies that can be traded.The process of signing up for a exchange allows you to purchase, sell, and hold crypto. It is usually best to go with an exchange which allows its users to withdraw crypto into their account online for safe keeping. When it comes to trading Bitcoin or other cryptos, the feature might not matter.There are numerous types on cryptocurrency exchanges. Because the Bitcoin principle of the individual sovereignty and decentralization, certain exchanges allow users remain anonymous and don't require users to enter the personal details of their users. These exchanges are autonomous and are typically decentralized, so they don't have a central source of control.Even though these systems have in a number of ways, they also provide assistance to the vast majority of people without banking. For certain types of people - refugees or those who live in countries without a sufficient infrastructure for government credit or banking--anonymous exchanges can help make them part of the mainstream economy.In the moment, many of the major exchanges aren't in a decentralized manner and are subject to laws that demand users submit identifying documentation. If you're in the United States, these exchanges include Coinbase, Kraken, Gemini, FTX, and Binance.US There are many others to mention. The number of exchanges has increased by the variety of features they provide.The cryptocurrency universe has grown rapidly in the last decade and a wide array of tokens are that are competing for dollars from investors. With the exception of Bitcoin and some prominent coins, such as Ethereum There aren't all of these tokens are offered on all exchanges. Each exchange has different criteria to decide whether to allow or exclude trading of certain tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a rising number of altcoins. They're probably the most accessible on-ramps into crypto that exist in the market. Binance targets a more advanced buyer, offering more sophisticated trading options and an extensive selection of altcoin choices. FTX is a rapidly-growing crypto exchange that has achieved a multibillion-dollar valuation, offers some limited altcoins to U.S. investors.4 However, traders outside within the U.S. have a greater selection of tokens on its platform.One important point to remember when setting up accounts for cryptocurrency exchanges is to use safe Internet practices. It is recommended to use two-factor authentication. an extensive, unique password that includes a wide range of lowercase lettersand capitalized ones, special characters, and numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the first country to do so.5 The cryptocurrency can serve as a currency to pay for transactions when a business accepts it. There is no substitute for the U.S. dollar continues to constitute El Salvador's primary currency.Step 2. Connnect your exchange with a payment optionIf you've made a decision to go with an exchange, you will require your personal documents. According to the exchange you choose, these could include photographs of a driver's permit or Social Security card, as plus information on your employer as well as the source of funds. The information you need could depend on the specific region you reside in and rules within it. The process is generally similar to setting up a typical brokerage account.Once the exchange has confirmed your identity, you'll be required to connect with a payment option. In the majority of exchanges, you can connect to your bank account without a hassle or you can connect a debit or credit card. Although you can utilize a credit card to buy cryptocurrency, it is not recommended because fluctuation in the price of cryptocurrency can raise the cost of buying the coin.<iframe src="https://www.youtube.com/shorts/wYJhUGVaeyk" width="560" height="315" frameborder="0" allowfullscreen></iframe>Bitcoin can be legally used in the United States, but some banks might question or stop deposits to crypto-related sites or exchanges.6 It's it's a good idea to make sure that your bank permits deposits to your chosen exchange.There are various charges for cash deposits from a bank account such as debit or credit card. It is important to learn about the fees associated with each payment option to help make a decision on an exchange or decide which option is best for you.Exchanges can also charge fees per transaction. These charges can be in the form of a flat charge (if the trading amount is low) or part of the transaction amount. Credit cards incur processing fees in addition to the transaction charges.Step 3. Place an orderYou can buy bitcoin (or other cryptocurrency) after selecting the exchange you want to use and then connecting it to a payment method. In recent times cryptocurrency exchanges are slowly became more accepted. They have grown dramatically in terms if liquidity and the variety of features available. The changes in the operation of cryptocurrency exchanges are in line with the shift in the perception of cryptocurrency. One industry that was considered a fraud or one with questionable practices is now slowly becoming an authentic one, which is attracting the attention of all major players in the world of financial services.Today, cryptocurrency exchanges have been able to reach a point at which they offer the same degree of functionality as their counterparts in stock brokerage. There are now crypto exchanges that offer numerous types of order and methods to invest. Most crypto exchanges provide both limit and market orders. Some even have stop-loss or stop-loss orders. From the above exchanges, Kraken offers the most sorts of orders. Kraken accepts market, limit, stoploss or stop-limit and take-profit limit orders.7Aside from a variety of sorts of orders, exchanges provide methods for setting up periodic investments, and allow customers to add a dollar-cost average to their preferred investments. Coinbase, for example, lets users set up recurring purchase for each day, week or month.8Step 4: Safe storageBlockchains, cryptocurrency or Bitcoin can be a place to store digital assets with greater security. Your crypto is kept away from the exchange but in the private wallet of your wallet ensures only you are the only person who has control over the private key to the funds. It also gives you the possibility of storing your funds away out of an exchange. This will help you avoid the risk that your exchange is hacked and the loss of your funds.While many exchanges provide wallets to their customers, security is not their primary business. We generally don't recommend the use of exchange wallets for big or long-term cryptocurrency investments.Some wallets are more advanced than other wallets. Some are Bitcoin only, while others offer the ability to store multiple altcoins. Some wallets offer the ability to swap one token for another.If you're looking to pick a Bitcoin wallet, you have several options. The first thing you will need to learn about crypto wallets is the notion of hot wallets (online wallets) and cold wallets (paper or physical wallets).Hot walletsInternet-connected wallets have also been known for their hot-looking wallets. Hot wallets function via Internet-connected devices, including computers, phones or tablets. The risk of vulnerability is that hot wallets create private keys to your coins using these devices that are connected to the Internet. Although a hot-wallet can provide convenience in the ways that you can access and transact with your money quickly, keeping your private key in a device that is connected to the Internet makes it more susceptible to a attack.This may sound ridiculous even to some, but people with inadequate security have the chance of losing funds to theft. This is a frequent situation, and it may happen in a number of ways. As an example, announcing on a platform like Reddit about how much bitcoin you've got while you are using little to nothing secure and storing it in a hot account would not be smart. In reality, the wallets can be made secure so it is taken care of. Strong encryption, strong passwords and two factor authentication, and safe Internet browsing should be considered the minimum standards.The best wallets for hot wallets are for smaller amounts or other currencies you are currently trading on an exchange. You can think of a hot wallet to a checking account. Traditional wisdom in finance would advise to store only money used for spending in a checking account while the bulk of your money is in savings accounts or other investment accounts. The same is true regarding hot wallets. Hot wallets include mobile, desktop, web and exchange accounts custody wallets.As stated previously, exchange wallets are custodial account that is provided by the exchange. The owner of this form is not owner of the private key to the cryptocurrency which is stored within the wallet. In the event of an event to occur , where the exchange becomes compromised or your account is compromised, you'd have to forfeit the funds you have invested. The expression "not your key, not your coin" is heavily repeated on cryptocurrency forums and communities.Cold walletsThe simplest definition of cold wallets is that it is not connected to the Internet so it has the lowest risk of being compromise. They can also be called offline wallets or even hardware wallets. They are wallets that store a person's private keys on a device remote from the internet. These wallets can be fitted with software which operates in parallel so that users can see their portfolio without putting their private key in danger.The most secure method to store your cryptocurrency offline is by using a physical wallet. A paper wallet is a paper wallet that you create off of certain websites. http://www.docspal.com/viewer?id=- produces both public and private keys that are printed out on paper. Access to cryptocurrency from these addresses is only possible if you own the piece of paper that is protected by the private key. A lot of people laminate their cash wallets with paper and store them in safe deposit boxes at their banks or even in a safe at home. These wallets are designed for the highest security and for long-term investments, as it is impossible to quickly sell or trade bitcoin stored the way.A more typical type of cold type of wallet is the hardware. A hardware wallet is typically an USB drive that is used to store users' private keys offline. The benefits of such wallets are substantial against hot wallets due to the fact that they are not affected by malware that could affect a computer. Hardware wallets ensure that private keys are not in contact with your network-connected computer or other software that is potentially vulnerable. They are also generally open source, which allows people to check the safety of these devices by performing audits of the code, not a business stating that it is appropriate for usage.The cold wallet is the most secured way to store bitcoin or any other cryptocurrency. However, they require more technical knowledge to set up.An excellent way to set your wallets is with three items such as an exchange account that allows you to purchase and sell products the hot wallet, which can hold small to medium amounts of crypto you'd like to trade, or sell and a cold physical wallet to store larger holdings with a longer time-frame.How to Buy Bitcoin With PayPalBitcoin? can also be bought via the payment processor PayPal? Holdings, Inc. (PYPL). There are two options to buy bitcoin with PayPal?. One, and probably the easiest method is to purchase cryptocurrencies by using your PayPal? account, which is linked to a payment system that accepts check or debit card. The second alternative is to use the balance in funds in your PayPal? account to purchase cryptocurrency from a third-party provider. This option is not nearly as effective as the first because very few third-party sites allow users to purchase bitcoin via that 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 make use of your cryptos to pay for products and services with"Checkout with Crypto" feature "Checkout With Crypto" feature.10To create a crypto account with PayPal? you need the following information is required to establish a PayPal? account: name, physical address or address, birth date the tax identification number.11It isn't possible to use a credit or debit card to buy Bitcoin through PayPal?. While you are buying the Bitcoin, PayPal? will display a price for the cryptocurrency. The price, however, is subject to rapid changes due to the fluctuation of markets for cryptocurrency. It's best to be sure to have more than the amount you estimated for the purchase in your account at the bank.When you buy bitcoin directly via PayPal? it earns you money through the crypto spread or the differences between Bitcoin's value and exchange rate with USD. PayPal? also charges a transaction fee for each transaction. These fees depend on the cost of the purchase. For example the flat fee of $0.50 is assessed for purchases between $110 to $200. The fee thereafter is an amount that is a percentage of the total dollar amount. For instance, a fee of 2 percent of the total value is due for transactions between $100 to $200.12The disadvantage of buying cryptocurrency through PayPal? is that you are not able to transfer the currency outside the Payment processor's own platform. This means it's not possible for you to transfer bitcoin purchased from PayPal?'s account to your external wallet for crypto or your personal wallet.11Another drawback of using PayPal? is that only a few websites and exchanges permit payments through the PayPal? processor to purchase payments. eToro is one of the few online trader that allows payment through PayPal? to purchase bitcoins on its platform.13How to Buy Bitcoin With a Credit CardThe? procedure for buying bitcoin with credit cards will be similar to the process for purchasing it through debit cards or an automated clearinghouse (ACH) wire transfers. You will need to enter your credit card's details into the exchange or online trading company and then approve the transaction. It is generally accepted that it's not a wise decision to buy bitcoin using credit cards. There are several reasons to this.First of all, there are some exchanges that do not permit bitcoin transactions using credit cards due to associated processing fees as well as the risk of fraud. This might be for the benefit of the customers. This is because credit card processing might charge additional fees to transactions. So, in addition to the transaction fee, you will end up paying processing costs that the exchange can pass onto you.The second reason is that purchases made with credit cards can be expensive. Some credit card companies treat bitcoin transactions as cash advances, and are able to charge large fees as well as interest rates for these advances. For example, American Express and Chase each count cryptocurrency purchases being cash advance purchases. So, if you buy $100 worth worth of bitcoin using an American Express card, you will pay at least $10 (current cash advance charges for the transactions) plus the annual percentage rate of 25 percent. Further, the credit card's company also limits customers to only $1,000 worth of bitcoin purchases per month.14A more indirect way of purchasing bitcoin by using a credit card is to use a Bitcoin Rewards credit card. The cards function the same way as your typical rewards credit , but they provide rewards in the type of bitcoin. Thus, they put the cash back earned from purchases into Bitcoin. One illustration of an Bitcoin points card for rewards is the BlockFi? Bitcoin Rewards Credit Card.15 Be aware that the annual fees for the cards could be hefty as well as the expenses associated with the exchange of fiat currency into crypto.Even though exchanges such as Coinbase as well as Binance remain among the most popular ways to purchase Bitcoin But they're by no means the only option.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Customers can simply insert money into machines and use it to purchase bitcoin that is then sent to digital wallets for users. Bitcoin ATMs have grown more popular in recent years--even retail major Walmart Inc. (WMT) is testing a pilot program which will give its customers the option of purchasing bitcoin. Coin ATM Radar can help locate the closest machines.However ATMs are expensive alternative. There are two charges associated with ATM bitcoin transactions including a charge for purchasing the item and the cost of conversion for changing money from fiat into bitcoin. Both of these fees are quite expensive as compared to other options. For example, in the world, the typical purchase cost on Bitcoin ATMs amounts to 8.4% (of the amount of purchase) and 5.4% for sales at ATMs.16Be aware, however, that Bitcoin ATMs are now requiring government-issued IDs since the beginning of 2020.P2P exchangesContrary to decentralized exchanges, which match buyers and sellers anonymously and manage all aspects of the transfer, there's a few peer-to-peer (P2P) exchanges that offer a closer interaction between users. LocalBitcoins? is an example of this type of exchange. After creating an account, users can send requests to purchase or sell bitcoin. The request must include information about payment methods and costs. After that, they can browse through the lists of both buy and sell deals before selecting the traders who they would like to conduct business.LocalBitcoins? aids in some aspects of the trading. Although P2P exchanges aren't able to provide an identical level of security and privacy as decentralized exchanges, they also give customers the chance to shop around for the best deal. Some exchanges have rating systems, so that customers are able to review prospective trade partners prior to committing.Mainstream brokeragesFew major brokerages provide bitcoin trading and purchase options due to the uncertainty surrounding the legality of cryptocurrency. Robinhood Markets, Inc. (HOOD) which is an app very popular among investors from retail, is one platform that offers cryptocurrency trading options. It charges 0% commission for crypto trades and purchases . It also earns money from payment for order flow passing its trading volume onto additional trading platforms as brokerages.17The absence of a commission-based fee might sound appealing for newcomers, but there are some negatives with this deal. One is, Robinhood cannot offer the wide range of features or currency offered by major crypto exchanges like Coinbase. Robinhood has enabled trading on its platform for seven different cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 Contrary to Coinbase, you can trade more than 100 crypto currencies through Coinbase.19 The exchange also offers different types of orders to reduce potential risk and limit losses when trading.The Robinhood platform doesn't have an online wallet. Thus, if your goal is to purchase cryptocurrencies through Robinhood then you'll have to consider additional fees to an online wallet service.Bitcoin and other cryptocurrency investment options are not insured by Securities Investor Protection Corporation (SIPC). Securities Investor Protection Corporation (SIPC). In the case of regular brokerages and brokerages, the agency protects against the loss of cash or securities brokerage accounts with an amount of up $500,000, and has a $250,000 cash limit.20 That facility is not accessible to clients trading on crypto-currency exchanges. The cryptocurrency exchanges such as Coinbase have insurance for crime to protect their infrastructure against hacks. However, that insurance won't provide protection to individual customers against password theft.21How to Sell BitcoinBitcoin? can be sold at the same places where you bought the cryptocurrency such as cryptocurrency exchanges and P2P platforms. Usually, the process of selling bitcoin on these platforms is the same as the buying process.For example, you may just need to click the button and specify an order type (i.e. what type of order, whether the cryptocurrency should be traded immediately at the cheapest price or it is sold to stop losses) to conduct the sale. Depending on the market composition and the demand at the location the cost of selling Bitcoin might differ. As an example, the exchanges in South Korea traded bitcoin at what is known as a kimchi cost during the escalating price of Bitcoin in the year 2018.The cryptocurrency exchanges charge a portion of the crypto sale amount in the form of fees. For example, Coinbase charges 2.49% of the overall transaction amount as fees.22Exchanges generally have daily and monthly withdrawal limits. So, the cash generated from an enormous sale might not immediately be available to the seller. There are no limits on the quantity of cryptocurrency you can sell, however.What Are the Steps for Purchasing Bitcoin?The process for purchasing bitcoin consists with four main steps: choosing the right venue or exchange for your order by selecting a preferred payment method in order to secure the storage for your bought cryptocurrency. The type of venue selected in the initial step, there might be additional steps in the process. In the case of Robinhood, for instance, if you purchase the cryptocurrency from Robinhood you could need to add additional charges for an online wallet and custody of your bitcoins since it doesn't offer these services.What Are the Most Popular Venues for Buying Bitcoin?The most widely used venues to purchase bitcoins are exchanges as well as brokerages (crypto and conventional) as well as payment services like PayPal?. You can also purchase Bitcoin via P2P exchanges. If you want to own bitcoin indirectly You can be a shareholder in companies who hold the cryptocurrency on their balance sheets. For instance, Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Typically, the cost of purchasing bitcoin comprises an amount per transaction plus the cost of changing a foreign currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment providers earn revenue by selling this conversion spread.) The cost per transaction is a function of your dollar amount for the trade. Higher amounts of trade be charged more. The total cost of purchase depends on features offered by the provider. For instance, Robinhood does not currently offer an online wallet for saving bitcoin. This means that you'll have to budget for charges for your online wallet purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?Bitcoin can also be purchased in the following locations:* Through Bitcoin ATMs* Through online payment providers like PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?No, your bitcoin transaction is not covered by SIPC.20 On certain exchanges like Coinbase account balances with fiat currencies in individual accounts can be insured by FDIC to the tune of $250,000 per account.21The Bottom LineThe? process for purchasing bitcoin is somewhat more complicated than buying regular stocks or equity. This is due to the fact that the cryptocurrency's ecosystem and infrastructure aren't as well-developed as those used for trading in the mainstream.A bitcoin purchase process comprises of four steps: selecting the right service or location for payment, connecting with a payment option, placing the order, and also ensuring the safe storage of your purchased cryptocurrency. Each of these steps will require research and a thorough examination of the pros as well as cons of each service. You can also buy bitcoin at Bitcoin ATMs and from payment services like PayPal? and other major brokerages, such as Robinhood.