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Making investments in Bitcoin (BTCUSD) may appear complicated, but it's simpler when you split it into steps. Investing or trading Bitcoin is easy if you have an account with a company or an exchange, although further safe storage practices are recommended.There are several items that those who are aspiring Bitcoin investors need to have: a cryptocurrency exchange account or personal identification document If you're using a Know Your Customer (KYC) platform along with a safe connection to the Internet, and a method to pay. It is recommended to keep your own private wallet separate from your exchange account. Methods of payment that work with this path include bank accounts including debit cards, banks, and credit cards. There is also the option to receive bitcoin from ATMs with specialization and P2P transactions.KEY TAKEAWAYSIts value Bitcoin is due to its use as a store of value and a payment system and also its limited supply and decreasing inflation.It's not impossible to for Bitcoin to be compromised It is nevertheless possible for your wallet or exchange access to your account be altered. This is why having a secure storage and security measures are imperative.* You can also buy bitcoin through services that are widely used, such as PayPal? and Robinhood.* One method to acquire bitcoin indirectly is to invest in businesses that have bitcoin on their balance statements.Before You Buy BitcoinSecurity? and privacy are vital concerns with regard to Bitcoin investors. Any person who gains the private password to a publicly accessible address that is on the Bitcoin blockchain is able to approve transactions.1 Private keys should be kept in secret. Criminals may attempt to steal them should they learn of massive assets. Be aware that anyone will be able to know the balance of any private address you've registered. But the upside to this information being public is that it allows an individual to create multiple public addresses to themselves. Therefore, they could distribute their wealth of Bitcoin over multiple addresses. A great strategy is to hold large investments at public addresses that aren't directly connected to addresses which are used for transactions.Anyone can access a history of transactions made on the blockchain--even you. Though transactions are publically documented on the blockchain, the identifying individual information about the user isn't. With the Bitcoin blockchain the only public key is shown next to an activity, which makes transactions secret however not completely secure. In this way, Bitcoin the transactions appear more clear and trackable than cash , since all of they are accessible for public review, in contrast to private cash transactions. However, Bitcoin transactions also come with elements of anonymity incorporated within their designs. It is extremely difficult to locate the transacting parties--i.e., those who send and receive bitcoins--on the cryptocurrency's Blockchain.International researchers and the FBI claim they are able follow transactions made via the Bitcoin blockchain with users' various online accounts, including their digital wallets.2 In the case of you create an account on Coinbase they will need to supply their identification.3 In the future, when that person purchases bitcoin, it is linked to their name. If they send it to an alternative wallet, it could still be tracked back to the Coinbase purchase tied to the person who owns the account. This shouldn't worry most investors as Bitcoin has been legalized in U.S. and most other advanced countries.Make sure you check whether there are any legal or regulatory and tax consequences of purchasing or selling bitcoin in your area of live prior to doing any transaction.Buying BitcoinWe? have broken down the steps involved in buying bitcoin below. It is important to do your homework and determine the best option that you can afford based on your situation.Step 1: Select an exchange service for crypto or venueThe initial step to buying bitcoin is choosing a crypto trading service or a location. The most popular options for trading and venues that allow the purchase of cryptocurrencies comprise cryptocurrency exchanges, payment services, and brokerages. From these, cryptocurrency exchanges offer the most practical option since they offer a number of features and exchanges using cryptocurrencies.Registering for a cryptocurrency exchange lets you buy, sell, and hold cryptocurrency. It is generally recommended to use an exchange that lets its customers take crypto out of their personal online wallets for safekeeping. In the case of those wanting to trade Bitcoin and other cryptocurrencies this feature isn't crucial.There are various kinds or cryptocurrency exchanges. Since the Bitcoin ethos is about autonomy and decentralization, certain exchanges permit users to remain anonymous and don't have to require specific personal data. These exchanges operate independently and are usually decentralized, therefore, they do not have a central source of control.Even though these systems have nefarious purposes, they can also provide services to vast majority of people without banking. Particularly for refugees or those living in countries with a lack of infrastructure for government credit or banking -- anonymous exchanges can connect them to the world's economy.In the moment, the most well-known exchanges aren't decentralized and follow laws that make users submit identifying documentation. On the United States, these exchanges include Coinbase, Kraken, Gemini, FTX, and Binance.US Just to name a few. These exchanges have risen significantly in the range of services they offer.The crypto market has grown rapidly in the last 10 years With a variety of new tokens offering investor dollars. Except for Bitcoin and some of the most well-known coins, such as Ethereum, not all of these tokens can be found on all exchanges. Each exchange has its own set of criteria in order to decide whether it should include or restrict trading of certain tokens.Coinbase, Kraken, and Gemini offer Bitcoin and a growing number of altcoins. These three are probably the most straightforward on-ramps for crypto within the entire crypto industry. Binance caters to a more sophisticated trader, with greater trading capabilities and an array of alternative currency options. FTX is a rapidly growing crypto exchange that has garnered its valuation to be multibillion dollars, also offers limited number of altcoins for U.S. investors.4 However, traders outside these countries U.S. have a greater range of cryptos available on its platform.The most important thing to consider when creating the account for a cryptocurrency exchange that you use secure Internet procedures. This is done by using two-factor authentication. one long, unique password with a mix of lowercase letters, capitalized letters or special characters as well as numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the first country to do so.5 Bitcoin can be used as a currency for any transaction where a business can take it. In the end, however, it is still the U.S. dollar continues to serve as El Salvador's main currency.Step 2. connect your account to one of the payment optionsIf you've chosen an exchange, you will need to gather your personal documents. In accordance with the exchange, it could be necessary to have photos from a driver's license and/or Social Security card, as in addition to information about your employer and the source of your funds. The details you'll need may vary based on the state you reside in and laws in it. The process is in general the same as creating a typical brokerage account.After the exchange has verified your identity, you'll be required to connect an option for payment. For most exchanges, you can connect your bank account straight away or connect a debit or credit card. Although you can utilize a credit card to buy cryptocurrency, it is not recommended because the volatility of prices for cryptocurrency can boost the total cost of purchasing coins.Bitcoin exists in legal form in United States, but some banks may question or restrict deposits to crypto-related sites or exchanges.6 It is recommended that you check to ensure that your bank will accept deposits at your preferred exchange.There are various charges associated with transactions made with a banking account, debit, or credit card. It is important to learn about the fees that are associated with any payment option so that you can choose an exchange or to decide which one works best for you.Exchanges may also charge fees for each transaction. The fees may be the form of a flat rate (if the trading amount is lower) or an amount that is a percentage of the trade amount. Credit cards incur fees for processing, in addition to transaction costs.Step 3. Place an orderYou can buy bitcoin (or other cryptocurrency) by selecting an exchange option and connecting a payment method. In recent times Bitcoin exchanges have slowly become more commonplace. They have grown dramatically by virtue of their liquidity, and the variety of features available. The operational changes at cryptocurrency exchanges mirror the changes regarding the perceived value of cryptocurrencies. An industry once believed to be a scam or one that was based on questionable practices is slowly turning into an authentic one, which has attracted attention from every major player in the financial services sector.In the last few years, cryptocurrency exchanges have progressed to the point where they have nearly the same level of features as their stock brokerage counterparts. Crypto exchanges now offer several types of orders and investment options. Many crypto exchanges have both market and limit orders. Some offer stop-loss order. The exchanges listed above, Kraken offers the most different types of orders. Kraken permits market, limit, stoploss stop-limit or take-profit limit orders.7Apart from the various sorts of orders, exchanges allow users to set up ongoing investments, allowing investors to dollar-cost average into their investment options. Coinbase is one example. It lets users create recurring purchases for each week, day or month.8Step 4: Safe storageA cryptocurrency, Bitcoin, or cryptocurrency-based wallet are the ideal way to store digital assets with greater security. A crypto wallet that is separate from the exchange and stored in your personal wallet means that only you hold the private key to the funds. It also gives the option to save your funds out of an exchange. This will help you avoid the possibility that your exchange could be hacked and thereby losing your money.While the majority of exchanges have users with wallets, security is not their primary business. We do not generally recommend the use of an exchange for larger or longer-term holdings in cryptocurrency.Certain wallets come with more options than other wallets. Some are Bitcoin only, and some allow the storage of several types of altcoins. Some wallets offer the ability to exchange one token with another.When it comes time to choose an Bitcoin wallet, you can choose from several choices. The first thing you will have to be aware of about crypto wallets is the concept of hot wallets (online wallets) and cold wallets (paper or hardware wallets).Hot walletsThey are referred to for their hot-looking wallets. Hot wallets work through Internet-connected devices like computers, phones or tablets. These wallets can pose security risks because these wallets produce private keys that you use to access your funds on these Internet-connected devices. While a hot account can provide convenience in the manner it allows you to access and transact with your money quickly, keeping your private key on an Internet-connected device makes it more susceptible to a hack.This may sound farfetched it's not, but those who don't have sufficient security are at risk of the loss of funds due to theft. It's not a rare occurrence, and it can be triggered in many ways. As an example, announcing on a social media platform such as Reddit about the amount of bitcoins you've saved up while you're using little to none security and storing it in a hot wallet would not be a good idea. But, these wallets may be secured as that precautions are taken. Strong secure passwords, 2-factor authentication and safe Internet browsing are as minimum specifications.These wallets are best when you have a small amount of cryptocurrency or cryptocurrency that you're already trading on an exchange. You can think of a hot wallet to a checking account. Traditional wisdom in finance would advise to put only money you spend in a savings or checking account, but the majority of your money is held in savings accounts or other investments accounts. Similar advice can be made for hot wallets. Hot wallets comprise mobile, desktop, web and exchange accounts custody wallets.As previously mentioned, exchange clients are custodial wallets that are offered by exchanges. The owner of this form is not holder to the encryption key for the cryptocurrency held in the wallet. In the event of an event to take place where the exchange is compromised or your account gets compromised, you'd be liable to lose your money. The expression "not your key, not your coin" is heavily repeated within cryptocurrency forums and communities.Cold walletsThe most simple way to describe the term "cold wallet" is that it's not interconnected to the Internet and thus has less risk of being at risk of being compromised. These wallets might also be called offline wallets or hardware wallets. These wallets save a user's private key in a device that isn't linked to the internet. They may also come with software working in parallel so that the user can look at the entire portfolio without putting the private keys in danger.<img width="360" src="">The most secure method to store your cryptocurrency offline is using a paper wallet. A paper wallet is a one that you can build from certain websites. https://www.rstandart.com/increase-your-pension-through-trading-into-cryptocurrency/ can then generate both public and private keys that you print on paper. The ability to access the cryptocurrency contained in these addresses is only possible when you've got the piece document with the private number. Many people laminate these paper wallets , and then store them in safe deposit boxes in their banks or even in a secure in their home. These wallets are designed for higher security and longer-term investments since it is difficult to sell or trade bitcoins stored in on this type of wallet.A more frequent type of cold wallet is a hardware one. It is comprised of a USB drive that is used to store personal keys of the user offline. They have a number of advantages over hot ones since they aren't affected by viruses that can infect a computer. Hardware wallets ensure that private keys are not in contact with your computer's network or any software that may be vulnerable. They are also generally open source, allowing users to assess their security using codes audits rather than a corporation stating they're reliable to operate.These are considered to be the most secure way to store your bitcoin or other cryptos. But they require more technical expertise to setup.An effective way to set up your wallets would be to have three items three things: an exchange account to use for selling and buying as well as a hot wallet that can hold small to moderate amounts of cryptocurrency that you plan 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 through the payment processor PayPal? Holdings, Inc. (PYPL). There are two methods to purchase bitcoin using PayPal?. The first , and the most convenient method is buying cryptocurrencies through your PayPal? account, which is linked to a method of payment that accepts check or debit card. The second option is to make use of the balance on an existing PayPal? account to purchase crypto through a third-party vendor. This option is not quite as user-friendly as the previous since only a handful of third-party sites allow users to purchase bitcoin with their 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. It is also possible to use your crypto to buy goods or services using the "Checkout With Crypto" feature.10To set up a crypto account with PayPal? it is necessary to provide the following details is required to establish a PayPal? account: name, physical address the date of birth in addition to a tax-identification number.11It is not possible for a credit card to purchase Bitcoin through PayPal?. During the purchase process, PayPal? will display a price for the cryptocurrency. However, this price can be subject to rapid change due to the fluctuation of markets for cryptocurrency. It is a good idea to make sure that you have more than the price you budgeted for the purchase in your bank account.When you purchase bitcoin through PayPal? this company, you earn out of the spread in crypto, or the gap between the price at which Bitcoin is traded plus its price of exchange with USD. PayPal? additionally charges you a transaction fee for each purchase. The amount of the fee depends on the dollar value of the purchase. For instance the flat rate of $0.50 is applied to purchases between $100 and $200. In the following instances, the fee will be an amount that is a percentage of the total dollar amount. A typical example is a charge of 2% of the purchase price is applied to purchases made with cryptos between $100 to $200.12One disadvantage of purchasing cryptocurrency via PayPal? is that you are unable to transfer the crypto outside the payment processor's platform. It is therefore not possible for you to transfer the Bitcoin you bought from PayPal?'s account to an additional crypto wallet or your personal wallet.11The third disadvantage of PayPal? is that not many trader and exchanges accept you to make use of the payments processor in order to buy payment. eToro is one of the very few online marketplaces that allow using PayPal? to buy bitcoin on its platform.13How to Buy Bitcoin With a Credit CardThe? process for purchasing bitcoin using credit cards is the same as the method when buying it through debit cards or by an automated clearinghouse (ACH) transfer. It is necessary to enter the details of your credit card with the online trading or exchange company and then approve the transaction. In general, , it's not a good idea to make purchases with bitcoin credit cards. There are a couple of motives for this.First of all, some exchanges do not allow bitcoin purchases using credit cards due to associated processing fees and the risk of committing fraud. This could work for the benefit of customers. This is because credit card processing might be able to add additional charges to transactions. In addition to the transaction fee it will also leave you having processing charges that the exchange might charge you.Another reason is that credit card purchases can be costly. The issuers of credit cards treat bitcoin purchases as cash advances, and are able to charge large fees as well as interest rates for such advances. For instance, American Express and Chase both count purchases made with cryptocurrencies like cash transactions. Therefore, if, for example, you purchase $100 worth of bitcoin using an American Express card, you are required to pay 10% (current cash advance fee for such transactions) plus an annual percentage cost of 25 percent. Additionally, the credit card's provider limits the amount of bitcoin purchases per month.14An alternative way to purchase bitcoin using a credit/debit card is to use the Bitcoin reward card. These cards work like a traditional rewards credit card however they offer rewards in the form of bitcoin. In other words, they convert the profits from purchases into Bitcoin. One illustration of one Bitcoin rewards credit card would be BlockFi? Bitcoin Rewards Credit Card.15 Beware, however, that the annual fees associated with these cards could be high as well as the costs associated with the conversion of fiat currencies to cryptocurrency.Exchanges like Coinbase or Binance remain among the most popular methods to purchase Bitcoin however, they're not the only means.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Customers can put cash into a machine that can be used to purchase bitcoin. This bitcoin is then transmitted to web-based wallets for users. Bitcoin ATMs have become increasingly popular in recent years. In fact, retail company Walmart Inc. (WMT) is developing a pilot project that provides customers with the option to purchase bitcoin. Coin ATM Radar can help to find the closest ATMs.However, ATMs are an expensive option. There are two costs that come along with ATM bitcoin transactions including a charge for purchasing the item and the conversion fee when converting cash to bitcoin. Both fees are fairly steep relative to the other options. As an example, the standard purchase price that Bitcoin ATMs charge is 8.4% (of the purchase amount) and 5.4% for sales at ATMs.16Be aware, however, that Bitcoin ATMs have been increasingly requiring government-issued IDs from early 2020.P2P exchangesUnlike decentralized exchanges, which match buyers and sellers anonymously and handle all aspects of the transfer, there's a few peer-to-peer (P2P) exchange services with a greater direct connections between users. LocalBitcoins? is one such exchange. After creating an account, users can submit requests to purchase Bitcoin, or sell it, along with details about payment methods and prices. Customers can then browse through lists of sell and buy offers in order to choose the business partners with whom they want to transact.LocalBitcoins? allows for certain aspects of trading. While P2P exchanges do not have the same level of privacy as decentralized exchanges, they also give customers the opportunity to shop around to find the most affordable deal. A lot of these exchanges have rating systems that allow users to have a way to evaluate potential trade partners prior to transacting.Mainstream brokeragesMost brokerages don't offer bitcoin purchasing and trading features because of the uncertainty regarding the regulation status of crypto currencies. Robinhood Markets, Inc. (HOOD), an app very popular among investors from retail, is an exchange that provides cryptocurrency trading options. It charges 0% commissions for cryptocurrency trading and purchases . The company earns money from money received for order flow and passing its trading volume onto various trading platforms and brokerages.17The absence of a commission-based fee might sound appealing in the beginning, but there are a few drawbacks to that proposition. First, Robinhood can't offer the variety of features and currencies offered by prominent crypto exchanges such as Coinbase. Robinhood offered trading on its platform on seven cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 While Coinbase is a different story, you can trade more than 100 cryptocurrency with Coinbase.19 Additionally, the exchange offers various order types to lower the risk and reduce losses in trading.The Robinhood platform doesn't offer a hosted wallet. In other words, if one wants to buy cryptocurrencies on Robinhood then you'll have to account for additional costs for an online wallet provider.Bitcoin and other cryptocurrency investments , however, are not protected by insurance through insurance companies like the Securities Investor Protection Corporation (SIPC). At regular brokerages, the corporation protects against loss of cash and securities in account with brokerages that are up to $500,000, which includes a $250,000 cash limit.20 This service isn't available to customers at cryptocurrency exchanges. Cryptocurrency exchanges like Coinbase are covered by insurance against crime to protect their infrastructure against attacks. However, the insurance does not cover individual customers from password theft.21How to Sell BitcoinYou? can sell bitcoin in similar places to where you bought the cryptocurrency, for instance, cryptocurrency exchanges and P2P platforms. Typically, the process involved in selling bitcoin through these platforms is the same as how you purchase it.For example, you may only have to click on a button and select the type of order (i.e. that you must specify whether the cryptocurrency will be sold immediately at the best price or it is necessary to sell it to prevent losses) to conduct the sale. Based on the composition of the market and the level of demand at the site, the offering price for Bitcoin may differ. For example, exchanges in South Korea traded bitcoin at what is known as a kimchi cost during the price increase in the year 2018.Exchanges for crypto currency charge a percentage of the sale price in the form of fees. For instance, Coinbase charges 2.49% percent of total transaction amounts as fees.22Exchanges typically have daily and monthly withdrawal limits. Therefore, the proceeds from the sale may take a while to reach the buyer. There aren't limits on the amount of crypto you may sell, however.What Are the Steps for Purchasing Bitcoin?The process to buy bitcoin is comprised of four steps: choosing an exchange or a location to place your order as well as selecting a payment option as well as ensuring safe storage of your bitcoin purchase. It is dependent on the venue chosen in the first stage, there could be additional steps to follow in the procedure. For instance, if, for example, you purchase the cryptocurrency through Robinhood there may be a need to factor in additional costs for an online bank account and custody of your bitcoin since they do not provide these services.What Are the Most Popular Venues for Buying Bitcoin?The most widely used venues for purchasing bitcoins include cryptocurrency exchanges brokering companies (crypto and traditional) and payment providers like PayPal?. There is also the option of buying Bitcoin through P2P exchanges. In order to acquire bitcoin in indirect form you can also purchase shares of companies that hold bitcoin on their balance sheets, like Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?In general, the cost of purchasing bitcoin is a transaction fee plus the cost of conversion of a non-fiat currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment solutions make money on this conversion spread.) The amount charged per trade is a function of how much money is involved in the trade. A greater amount of trades will have higher charges. Cost of purchasing is dependent on the features offered by the venue. For example, Robinhood does not currently provide an online wallet to the storage of bitcoin. So, you'll need to budget for the costs of a wallet online for your purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?Bitcoin can also be purchased at these locations:* Through Bitcoin ATMs* Through online payment solutions like PayPal?* At mainstream brokerages like RobinhoodIs? My Bitcoin Purchase Protected by SIPC?Yes, your bitcoin purchase is not covered by SIPC.20 At certain exchanges, like Coinbase Bitcoin, the balances of the fiat currency in individual accounts may be insured by FDIC to the tune of $250,000 per account.21The Bottom LineThe? process of purchasing bitcoin is more involved in comparison to the purchase of common equity or stock. This is due to the ecosystem and infrastructure for bitcoin are not as well developed that those of traditional trading.The process for buying bitcoins consists of four phases: selecting the appropriate service or place for payment, connecting with the payment method of your choice, placing an order, and making sure you have safe storage for the cryptocurrency. Each of these steps requires thorough research and an examination of the pros as well as negatives of each service. You can also purchase bitcoin through Bitcoin ATMs or via payment companies like PayPal? and traditional brokerages like Robinhood.