Investing in Bitcoin – How to Get Started

Bitcoin is the “Internet for money” — a global network that allows people to securely exchange value and share data without needing a middleman. While it’s a relatively new form of currency, there are many investors who are interested in getting involved. However, the cryptocurrency landscape can be complex with various assets, exchanges, wallets, and dashboards to consider. As a result, it can be difficult to know where to start.

First and foremost, make sure that investing in Bitcoin fits into your overall financial picture. This will involve discussing your portfolio with a qualified wealth advisor to determine how much risk you can afford to take and how best to diversify your investments. Investing in Bitcoin is highly speculative and can be subject to greater volatility than traditional investments such as stocks, bonds and mutual funds.

Once you’ve determined that cryptocurrency investment is right for you, it’s time to decide how much you want to spend. While a single bitcoin may cost tens of thousands of dollars, the good news is that most crypto exchanges allow you to buy fractional coins so that you can start off small and increase your investment as you become more familiar with the space.

In addition to being able to purchase individual Bitcoins, most exchanges also offer other cryptocurrency options like Ethereum and XRP. To begin trading, simply search for your preferred coin using the platform’s trading function and use a strategy such as dollar-cost averaging to build up your holdings over time. After the trade completes, you’ll be the proud owner of your own Bitcoin!

Finally, you may be able to get involved in the crypto industry by purchasing shares of companies that either have exposure to the cryptocurrency market or actually use blockchain technology (the technology that Bitcoin is built on). These types of investment vehicles are more familiar to retail investors than direct investments in individual coins, and they tend to have lower minimums and fees than buying Bitcoin directly.

There are a growing number of players in the space that are creating bitcoin trusts designed to help retail investors navigate crypto, Bonaparte said. These types of funds are essentially exchange-traded funds that are designed to track the price of Bitcoin and provide a return that is similar to a traditional stock fund.

While the peaks and valleys of bitcoin can be dramatic, it’s still one of the most popular investments in existence. While it’s highly speculative, the upside can be great for those who are prepared to do their homework and make careful decisions. But remember that any type of bitcoin investment can be subject to greater volatility than many tried-and-true investments, so it should be reserved for the riskiest corners of your portfolio. To reduce your risk, we recommend limiting your cryptocurrency holdings to no more than 2% of your total portfolio.