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Investments in Bitcoin (BTCUSD) might seem complicated, but it's easier to understand if you simplify it by smaller steps. If you are interested in investing or trading Bitcoin does not require an account with a service or an exchange, although additional safe storage practices are recommended.There are numerous things hopeful Bitcoin investors require to have: a cryptocurrency exchange account and identification proof if you are using the Know Your Customer (KYC) platform that has a secure connection the Internet, and a method to pay. It is recommended to keep a private wallet separate from the exchange account. The most reliable methods to pay using this option include bank accounts, debit cards, and credit cards. It is also possible to make bitcoin transactions at ATMs that are specialized and via P2P exchanges.KEY TAKEAWAYS"The value and value that comes from Bitcoin is derived from its popularity as a storage of value and payment method in addition to its finite supply and declining inflation.* Although it is nearly impossible for Bitcoin itself to be compromised but it is still possible for your wallet or exchange account to get compromised. This is why taking care of proper storage and security is essential.You can also purchase bitcoin via mainstream services such as PayPal? or Robinhood.* One way to invest in bitcoin indirectly is to invest in businesses with bitcoin on their balance books.Before You Buy BitcoinSecurity? and privacy are essential issues with regard to Bitcoin investors. Anyone who gets the private key to a public account within the Bitcoin blockchain can sign off on transactions.1 Private keys should be kept secret. Criminals might attempt to take them away once they know of your large amounts. Be aware that anyone may examine the balance of a public address used. The other side of this is that an individual can make multiple public addresses for themselves. Thus, they are able to distribute their wealth of Bitcoin across multiple addresses. One good option is to invest large amounts at public addresses that aren't specifically linked to accounts that are used in transactions.Anyone can look up a history in transactions done on blockchain -- even you. Though transactions are publically documented on the blockchain, individuals' personal details isn't. With the Bitcoin blockchain users only have their public key appears alongside each transaction. Thus, transactions are private however not completely in any way anonymous. In that sense, Bitcoin transfers are much easier to trace and traceable than cash , since all of they are accessible for public scrutiny, unlike private cash transactions. However, Bitcoin transactions also come with an element of privacy built in their structure. It's very difficult to discover the transacting parties--i.e. the recipient and the sender of bitcoin--through the blockchain used by the cryptocurrency.International researchers as well as the FBI have claimed they can trace transactions that are made on the Bitcoin blockchain back to users' other online accountsas well as their digital wallets.2 For example, if someone opens an account at Coinbase you must supply their identification.3 After that, when the buyer purchases bitcoin, it is linked to their account. In the event that they transfer it an alternative wallet, it could still be traced back to the Coinbase transaction, and is linked to the account holder's name. This shouldn't worry most investors , as Bitcoin may be used legally in U.S. and most other developed countries.Check out whether there are any legal or regulatory and tax laws for purchasing and selling bitcoin where you live before transacting.Buying BitcoinWe? have broken down the steps needed for buying bitcoin below. You should remember study the options thoroughly and pick the most appropriate option to suit your situation.Step 1: Choose one of the crypto trading services or a venueThe initial step in purchasing bitcoin is choosing a cryptocurrency trading service or a venue. Popular trading services and venues to buy cryptocurrency include exchanges, payment services, and brokerages. From these, cryptocurrency exchanges are by far the most convenient option because they offer a array of features as well as more cryptocurrencies for trading.By signing up to a cryptocurrency exchange lets you buy, sell, or hold cryptocurrency. It is generally recommended to select an exchange that allows its users to take crypto out of their private online wallet to keep safe. When it comes to trading Bitcoin or other crypto currencies, this may not be a problem.There are many kinds that offer cryptocurrency exchanges. Because the Bitcoin ethos is about autonomy and decentralization, certain exchanges let users remain anonymous and don't need users to input the personal details of their users. These exchanges operate as autonomous entities and are typically decentralized, so they don't have a central source of control.Although these systems can serve some nefarious ends, they also provide benefits to the large majority of the population who do not have access to banking. For certain kinds of people--refugees or those who live in countries that have no infrastructure for credit from the government and banking--anonymous exchanges might help integrate them into the mainstream economy.At present, all of the top exchanges in the world are controlled by a central authority and have users provide identification documents. If you're in the United States, these exchanges include Coinbase, Kraken, Gemini, FTX, and Binance.US just to mention a few. The number of exchanges has increased in the range of services they provide.The world of crypto has expanded quickly in the past decade as a number of new coins have been which are competing with dollars from investors. With the exception of Bitcoin and certain prominent coins, such as Ethereum, not all of these tokens are offered on all exchanges. Each exchange has its own set of standards for determining whether to accept or exclude the trading of certain tokens.Coinbase, Kraken, and Gemini provide Bitcoin and a steady stream of altcoins. These three are possibly the most accessible on-ramps into crypto across the industry. Binance caters to a more advanced trader, offering more robust trading functions and more diverse altcoin choices. FTX is a fast-growing digital exchange that has an impressive multibillion-dollar valuation, is offering only a limited amount of altcoins to U.S. investors.4 However, those who are not from the U.S. have a greater selection of tokens on its platform.One important aspect to take into consideration when setting up an account on a cryptocurrency exchange is that you use secure Internet methods. This includes two-factor authentication . an extensive, unique password with a mix of lowercase, capitalized, and capital letters along with special characters and numbers.El Salvador made Bitcoin legal tender on September 7, 2021. It was the very first country to do so.5 The cryptocurrency is used as a currency to pay for transactions that the company can accept it. This is why the U.S. dollar continues to serve as El Salvador's main currency.Step 2: Connnect your exchange with an alternative payment methodAfter you've picked an exchangeoption, you'll require your personal documents. If you are using an exchange, it could be necessary to have photos of a driver's permit or Social Security card, as plus information on your employer and source of funds. The information you may need is contingent on the location you live in and the laws that apply to it. It's basically the same as setting up a typical brokerage account.After the exchange has verified your identity, you'll be asked to join to a payment method. The majority of exchanges can connect to your bank account through the account or connect a credit or debit card. Even though you can use a credit card to buy cryptocurrency, it's not a good idea because the volatility in cryptocurrency prices can increase the price of buying coins.Bitcoin has been legalized in the United States, but some banks may question or even block deposits to crypto-related websites or exchanges.6 It's important to research to see if your bank allows deposits at your chosen exchange.There are different fees for payments made via bank accounts either debit or credit card. It is vital to look into the charges associated with any payment option so that you can make a decision on an exchange or select the payment method that works most effectively for you.Exchanges also charge fees per transaction. These charges could be the form of a flat rate (if the trade amount is lower) or an % of the trading amount. Credit card transactions incur fees for processing in addition to transaction fees.Step 3: Place an orderYou can purchase bitcoin (or other cryptocurrency) after choosing an exchange and connecting a payment option. In the past few years cryptocurrency exchanges slowly become more mainstream. They have increased significantly in terms of liquidity and their breadth of features. Changes in operation at cryptocurrency exchanges mirror the changes in how they are perceived by the public. One industry that was seen as a fraud or with unreliable practices is gradually becoming an actual one that has attracted interest from every major player that are in the business of financial transactions.These days, cryptocurrency exchanges have become so popular that they provide the same degree of functionality as their counterparts at stock brokerages. There are now crypto exchanges that offer various types of orders and options to invest. Almost all crypto exchanges offer both market and limit orders. Some have stop-loss or stop-loss orders. In the list of exchanges above, Kraken offers the most kinds of orders. Kraken is able to accommodate market limits, stop-loss orders, stop limit, take-profit, and take-profit limit orders.7Apart from the various kinds of orders, exchanges offer methods to set up recurring investments, allowing clients to apply a cost-per-dollar average to their preferred investment. Coinbase for instance, lets users set up recurring purchase for each day, week or month.8Step 4: Safe storageBitcoin and cryptocurrency wallets provide an excellent way to store your digital assets more securely. When you store your cryptocurrency outside of the exchange and stored in your own wallet, you can be sure that only you hold the private key to your money. Additionally, it allows you to have the option to save your funds from exchanges and eliminate the risk of your account being hacked and losing your funds.Although most exchanges offer wallets to their customers, security is not their primary business. We generally do not recommend the use of an exchange wallet for huge or long-term crypto holdings.Certain wallets offer more features than other wallets. Some are Bitcoin only, and some can be used to store numerous types of altcoins. Some wallets additionally offer the ability to swap one token for another.If you're looking to pick the best Bitcoin wallet, you can choose from several options. The first thing you need to learn about crypto wallets is the concept of hot wallets (online wallets) and cold wallets (paper or hardware wallets).Hot walletsThese wallets may also be known as "hot wallets. Hot wallets operate on devices that are connected to the Internet, such as phones, computers or tablets. They can be vulnerable because they create private keys that you use to access your funds using these devices that are connected to the Internet. Though a hot wallet can be extremely convenient in the method that you can access and make transactions with your assets quickly, storing your private keys on a device connected to the internet makes it more vulnerable to hack.This might sound a bit absurd However, those with hot wallets who do not have adequate security could be at risk of having their money stolen. It's not a rare instance, and it can occur in several ways. It is for instance, boasting on a social media platform such as Reddit about the amount of bitcoin you own while you're using little to none security and storing it in a hot wallet might not be smart. That said, these wallets can be made secure so you take the proper precautions. Strong passwords, two-factor authentication and safe Internet browsing are the minimum requirements.These wallets are perfect for smaller amounts of cryptocurrency or cryptocurrency you're actively trading with an exchange. One could compare a hot wallet to a bank account. Financial wisdom is generally believed to hold only spending money with a check-book account while the majority of your savings is in savings accounts or other investment accounts. This is also true to hot wallets. Hot wallets include mobile, desktop, web and exchange account custody wallets.As was mentioned earlier, exchange wallets are custodial accounts offered by exchange. The owner of this type is not the holder of the key private to the cryptocurrency that is held in this wallet. If an incident should happen where the exchange gets stolen or your wallet is compromised, it would be lost your money. The expression "not your key, not your coin" is frequently utilized in cryptocurrency forums as well as communities.Cold walletsThe most simple way to describe cold wallets is that it's not in connection with the Internet and is therefore at an extremely low risk of being vulnerable. These wallets can be described as offline wallets or hardware wallets. These wallets are used to store a customer's private key on something remote from the internet. They could also be equipped with software that runs in parallel, so the user is able to view their account without putting their private keys at risk.Perhaps the most secure way to store digital currency offline is using a paper wallet. Paper wallets are wallet that you can generate from certain websites. It can then generate both private and public keys which you print out on a piece of paper. The ability to access bitcoin and other digital currencies is only possible if you possess the piece of paper that contains the private key. Many people laminate these papers wallets and place them in safe deposit boxes at their bank or even in a secure in their home. These wallets are made for longer-term, secure investments as you are unable to swiftly sell or trade bitcoins stored in by this method.The most popular type of cold money wallet is a hard-copy wallet. Hardware wallets are usually comprised of a USB drive device that keeps a user's private keys securely offline. https://cancerrule6.tumblr.com/post/675979801885065216/wall-st-week-ahead-crypto-investors-will-be-more of these wallets are significant over hot wallets , as they are not affected by viruses that could harm a computer. Hardware wallets ensure that private keys do not come in contact with your network-connected computer or any software that may be vulnerable. The devices are usually open source, allowing the community to judge their safety via code audits rather than a business stating that it is safe to use.They are by far the best and most secured way to store bitcoin or other cryptocurrencies. However, they require more knowledge of technology to set up.A great method to set your wallets is to include three items one of which is an exchange bank account that allows you to purchase and sell products and a hot wallet to hold small to moderate amounts of cryptocurrency you would like to trade or sell and a cold, hardware wallet to keep larger quantities in the long run.How to Buy Bitcoin With PayPalBitcoin? can also be bought through payment processor PayPal? Holdings, Inc. (PYPL). There are two ways to buy bitcoin through PayPal?. One, and probably the easiest way is to buy bitcoin through your PayPal? account, which is linked to a payment mechanism like a credit card, bank account or debit card. The second alternative is to use the balance on the balance of your PayPal? account to purchase cryptocurrency via a third-party supplier. This isn't quite as user-friendly as the previous because few third-party websites allow users to buy bitcoin with it's 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 cryptocurrencies to purchase products or services by using"Checkout with Crypto" feature "Checkout With Crypto" feature.10To set up a bitcoin account through PayPal?, the following information is needed to establish a PayPal? account: name, physical address along with date of birth in addition to a tax-identification number.11It is not possible using a credit/debit card to purchase Bitcoin using PayPal?. In the process of buying, PayPal? will display a price for the cryptocurrency. However, this price can be subject to rapid changes due to the fluctuation of markets for cryptocurrency. It's best to make sure you have more than the amount that which you budgeted in your bank account.When you buy bitcoin direct through PayPal? this company, you earn by selling the crypto spread, or the differences between Bitcoin's value along with its currency exchange USD. PayPal? may also charge an transaction cost for every purchase. The amount of the fee depends on the value of the purchase. For instance, a flat fee of $0.50 is assessed for purchases between $110 to $200. Following that, it is proportional to the total dollar amount. For instance, a charge of 2% of the purchase price is applicable for purchases that range from $100 to $200.12One disadvantage of purchasing cryptocurrencies via PayPal? is that you cannot transfer the crypto away from the company's platforms for payment. Thus, it's not possible for you move your bitcoin through PayPal?'s bank account to another crypto-wallet or your personal wallet.11Another drawback to using PayPal? is that only a handful of online and offline traders permit that use of the processing company to make payments. eToro is among the few online trading platforms that permit the use of PayPal? to purchase bitcoins on its platform.13How to Buy Bitcoin With a Credit CardThe? procedure of purchasing bitcoin with credit card is similar to the process for purchasing it using debit cards or via automated clearing house (ACH) transactions. You will need to enter your credit card information with the online trading or exchange company, and then you can authorize the purchase. In general, however, it's not a smart idea to purchase bitcoin using credit cards. There are a couple of reasons why this is.First of all, none of the exchanges permit bitcoin purchases with credit cards because of the processing costs as well as the risk of fraud. This could work in the best interests of customers. This is since credit card processing is able to add additional charges onto transactions. In addition to the transaction fee and transaction fees, you'll also be charged with processing charges that the exchange might pass onto you.The other reason is that credit card purchases can be expensive. Credit card issuers treat bitcoin purchases as cash advances and apply hefty fees as well as high interest rates on advances. For instance, American Express and Chase each count cryptocurrency purchases being cash advance purchases. Thus, if it is possible to purchase $100 worth of bitcoin with the American Express card, you must pay the amount of $10 (current cash advance fees for the transactions) and an annual fee of 25 percent. The credit card provider also restricts you to $1000 worth of bitcoin transactions per month.14Another method to purchase bitcoin using a credit/debit card is by acquiring a Bitcoin Rewards credit card. These cards function similarly to your typical rewards credit card except they also offer rewards in cryptocurrency bitcoin. They invest the cash-back earned from purchases into Bitcoin. One illustration of an Bitcoin Rewards card to use is BlockFi? Bitcoin Rewards Credit Card.15 However, be aware that the annual costs for these cards can be very high and there could be additional costs associated with the conversion of fiat currencies into cryptocurrency.Exchanges like Coinbase and Binance remain among the most popular options to buy Bitcoin But they're by no means the only means.Alternative Ways to Buy BitcoinBitcoin? ATMsBitcoin? ATMs act like in-person bitcoin exchanges. Customers can simply insert money into an ATM and use it to buy bitcoin. Bitcoin is then transferred to online wallets of users. Bitcoin ATMs are increasingly well-known in recent years. Retail massive Walmart Inc. (WMT) is trying out a pilot program that gives customers the option of purchasing bitcoin. Coin ATM Radar can help locate the nearest ATMs.However ATMs are a costly alternative. There are two costs that come along with ATM bitcoin transactions such as a transaction fee and the cost to convert money from fiat into bitcoin. Both charges are quite high compared to those of other alternatives. For example, the worldwide average cost for purchases that Bitcoin ATMs charge is 8.4% (of the purchase amount) and 5.4 percent for sales at ATMs.16Be aware that Bitcoin ATMs are increasingly requiring government-issued IDs by the start of 2020.Exchanges P2PUnlike decentralized exchanges, which provide buyers and sellers with anonymity and allow for all aspects of the transaction, there exist peer-to-peer (P2P) exchanges with a greater direct connections between users. LocalBitcoins? is an example of this type of exchange. After having an account, users are able to post requests to buy or sell bitcoin. They can also provide information about payment methods and costs. Users can then search through lists of buy and sell offers and select the trade partners with whom they want to conduct business.LocalBitcoins? helps with certain aspects of trading. While P2P exchanges don't have the same level of anonymity as decentralized exchanges however they do provide users the opportunity to search to find the best price. A lot of these exchanges have rating systems, so that customers can review potential trade partners prior deciding to do business.Mainstream brokeragesMost brokerages don't offer the capability to trade and buy bitcoin because of the uncertainty about the legal status of cryptocurrency. Robinhood Markets, Inc. (HOOD) which is an app that is popular among retail investors, is one such exchange that provides cryptocurrency trading services. It charges no commissions for cryptocurrency transactions and purchases , and earns money from the payment of order flow, passing its trading volume onto another trading platform or brokerages.17<iframe src="https://www.youtube.com/shorts/wYJhUGVaeyk" width="560" height="315" frameborder="0" allowfullscreen></iframe>The absence of a commission-based fee is a tempting option for those who are new to crypto, however there are some negatives with this deal. To begin, Robinhood isn't equipped with the range of features and currencies offered by prominent crypto exchanges like Coinbase. Robinhood offered trading on its platform to trade seven cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV, Dogecoin, and Ethereum Classic.18 As a contrast, you can trade more than 100 cryptocurrencies on Coinbase.19 Additionally, the exchange offers different types of orders to reduce risk and mitigate losses during trading.The Robinhood platform also does not have an online wallet. So, if you wish to buy cryptocurrency through Robinhood you'll need take into account additional charges to an online wallet service.Bitcoin and other cryptocurrency investments are NOT insured by SIPPC. Securities Investor Protection Corporation (SIPC). The regular brokerages of the insurance company protects against the loss of cash and securities in brokerage accounts that have a total of $500,000, which includes a $250,000 cash limit.20 This isn't accessible to clients of exchanges for cryptocurrency. Cryptocurrency exchanges like Coinbase have insurance for crime to safeguard their infrastructure from hacks. However, this insurance doesn't guarantee the security of individual users against password theft.21How to Sell BitcoinYou? can sell bitcoin at similar places to where you bought the cryptocurrency, like cryptocurrency exchanges or P2P platforms. In most cases, the process for selling bitcoin on these platforms is similar to how you purchase it.For example, you may only have to press the button and choose an order type (i.e. and whether or not the cryptocurrency should be sold instantly at the cheapest price or it is necessary to sell it to be able to limit losses) in order to conclude the sale. Based on the composition of the market and demand at the time of the sale the selling price for Bitcoin can differ. The example is that exchanges in South Korea traded bitcoin at the so-called kimchi rate during the time of the increase in prices back in 2018.Exchanges for crypto currency charge a percentage of the value of the transaction as fees. For example, Coinbase charges 2.49% of the transaction total as fees.22Exchanges typically have daily and monthly withdrawal limitations. This means that the money earned from an enormous sale might not be immediately available to the buyer. There aren't any limitations on the amount of crypto you may sell however.What Are the Steps for Purchasing Bitcoin?The process for purchasing bitcoin consists from four phases: choosing the right venue or exchange to make your purchase before deciding on a payment technique and then making sure you have a safe place to store for your purchased cryptocurrency. According to the venue chosen in the first stage, there could be more steps involved in this process. For example, if choose to purchase the cryptocurrency through Robinhood you might need to calculate additional costs for an online wallet as well as the custody of your bitcoin because it does not offer these services.What Are the Most Popular Venues for Buying Bitcoin?The most widely used venues for buying bitcoins are cryptocurrency exchanges as well as brokerages (crypto or mainstream) and payment service such as PayPal?. It is also possible to purchase Bitcoin through P2P platforms. In order to acquire bitcoin in indirect form you can also invest in companies that have the cryptocurrency in their balance sheets, such as Tesla, Inc. (TSLA) or MicroStrategy? Incorporated (MSTR).2324How Much Should I Expect to Pay to Purchase Bitcoin?Usually, the cost for purchasing bitcoin consists of the fee for each trade as well as the cost to convert non-fiat currency (generally dollars) to bitcoin. (Cryptocurrency exchanges and payment services make money out of this conversion spread.) The price per trade is a function of what amount in dollars is the trade. A greater value of trade will be charged more. The total cost of purchase is dependent on the features offered by the vendor. For instance, Robinhood does not currently offer an online bank account for storage of bitcoin. So, you'll need to budget for costs associated with an online wallet purchase.Besides Cryptocurrency Exchanges, Where Else Can I Buy Bitcoin?You can also buy bitcoin from the following stores:* Through Bitcoin ATMsPayments? can be made online using payment service 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 Certain exchanges, like Coinbase that accept fiat funds, balances on individual accounts may be FDIC-insured to the tune of $250,000 per account.21The Bottom LineThe? process for purchasing bitcoin is somewhat more complicated than the procedure for buying traditional equity or stocks. This is due to the infrastructure and ecosystem for cryptocurrency aren't as advanced similar to the one used in traditional trading.The process of purchasing bitcoin is comprised of four phases: selecting an option or a place to make payment, connecting with the payment method, placing an order, as well as ensuring the security of your cryptocurrency. Each of these steps requires research and a careful review of pros and advantages of each one. You can also purchase bitcoin through Bitcoin ATMs or from payment services such as PayPal? as well as traditional brokerages such Robinhood.