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Essential things to know about buying Bitcoin

The increasing Bitcoin’s popularity may have prompted you to invest in this digital currency. However, you may not know much about the buying process. Well, Bitcoin has drawn attention from many investors across the globe. Today, Bitcoin trades for around $60,000, roughly ten times where it stood last year. People from all over the globe…

The increasing Bitcoin’s popularity may have prompted you to invest in this digital currency. However, you may not know much about the buying process. Well, Bitcoin has drawn attention from many investors across the globe. Today, Bitcoin trades for around $60,000, roughly ten times where it stood last year.

People from all over the globe are opening accounts with crypto exchanges. Platforms like Bitcoin Champion are noticing an increasing number of new crypto traders. That’s because they allow people to easily buy Bitcoin using fiat money and convert their cryptocurrency into conventional cash.

However, you should know certain essential things before jumping on the crypto-trading bandwagon. Here are some of them.

Buying the Entire Bitcoin is Not a Must
The fact that you don’t have to purchase the entire Bitcoin is essential for a new investor to grasp. Essentially, you can start by buying a fraction amount of Bitcoin. The divisible nature of Bitcoin enables people to invest in this digital currency even with a small amount of fiat money. In simple terms, you can start by buying Bitcoin in one hundred-millionth of the entire coin. Such a tiny Bitcoin unit is called a Satoshi, named after the mysterious creator of this cryptocurrency, Satoshi Nakamoto. But most crypto exchanges set the minimum amount a person can trade. However, it usually ranges between $5 and $10 rather than the total Bitcoin price tag, which is $60,000.

You Might Pay a Fee to Purchase Bitcoin
You won’t buy Bitcoin free of charge. Although some crypto exchanges use the “no transaction fee” slogan to lure newbies, they charge a fee for buying and selling Bitcoin. Most marketplaces profit from spreads. A spread refers to variation in the sale price and the amount they pay for their Bitcoin. Usually, this can range from 1% to 2%. On some platforms, Bitcoin users pay a transaction fee in addition to the spread. Although you should be attentive to such payments, they shouldn’t hinder you from purchasing Bitcoin.

Never Forget to Protect All Your Passwords
Reputable crypto exchanges are keen to protect their users and avoid breaches. That’s because they don’t want to be victims of large-scale theft. Essentially, most crypto exchanges keep Bitcoin in cold storage. That means this Bitcoin doesn’t have any connection to the internet. What’s more, some companies have insurance policies guarding them against theft.

However, you won’t have any protection if criminals hack your account only. For instance, somebody can steal and use your password or phone in authenticating a Bitcoin transaction. In that case, you can’t get back your stolen funds. That’s because Bitcoin doesn’t work like a bank account or credit card where transactions are reversible. After transferring Bitcoin out of the wallet, you can’t reverse the transaction. Therefore, safeguard your account and use strong passwords.

Trading and Investing in Bitcoin Are Two Different Things
Trading Bitcoin means you purchase the virtual currency hoping its value will increase and eventually sell and make a profit. Investing in Bitcoin means buying and holding onto your tokens for a long time. You can invest in Bitcoin to diversify your investment portfolio. However, take the time to understand, monitor, and analyze factors that prompt a change in Bitcoin value. That way, you can determine the right time to invest in this digital currency. When trading Bitcoin, factor in the fees that can add up quickly if you purchase and sell this cryptocurrency frequently.

You can profit from trading or investing in Bitcoin. However, caution is necessary to avoid losing your hard-earned money when purchasing Bitcoin. Therefore, understand how Bitcoin works and how people profit from it before purchasing your first tokens.  

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