Since its birth in 2009, the value of Bitcoin has skyrocketed from less than $1 per Bitcoin to a high of $69,000.
With such astronomical returns and growing concerns over the fiat banking system, it’s no surprise that many investors are still eyeing Bitcoin and other digital currencies in 2023.
Whether you want to support Bitcoin’s vision of decentralized finance or simply seek to diversify your portfolio with strong and promising assets, we can help you on your investment journey.
Let’s talk about 3 ways you can invest in Bitcoin right now and how it’s never been easier.
Invest in Bitcoin through Cryptocurrency Exchanges
Cryptocurrency exchanges are online platforms that allow users to buy and sell various cryptocurrencies, including Bitcoin. These exchanges offer a convenient way for investors to buy and store bitcoins, and offer a variety of trading features and tools to help users manage their investments.
If you’re just starting your investment journey, or simply don’t have time to delve into more intensive investment methods, using an exchange is the way to go. Investing in cryptocurrencies is very similar to what you see in traditional brokerage firms like Fidelity, so it’s easy to ‘get started’.
It is here 4 easy steps You can invest in Bitcoin through exchanges:
1. Open an account on your favorite exchange
The first step is to open an exchange. Options vary by country. All exchanges support Bitcoin, but if you want to invest in other cryptocurrencies in the future, make sure they are offered by the exchange.
Here you can see some of our top picks for the best crypto exchanges.
Note: Many exchanges require you to submit some form of ID to comply with anti-money laundering laws.
2.Fiat currency deposit
Next, you need to deposit “Fiat Currency”. Fiat means money such as dollar bills, pounds and euros.
Most platforms allow you to start with as little as $10, allowing you to deposit via bank transfer, credit/debit card, or electronic wallets such as PayPal.
3. Search BTC
In your newly deposited account, use the exchange’s search function to find ‘BTC’, the Bitcoin ticker symbol.
Most platforms also offer a variety of other cryptocurrencies to invest in, such as Doge, Solana, Ethereum, and popular altcoins like XRP.
Screenshot of how to buy Bitcoin on Coinbase
4. Invest
Use the exchange’s trading function to buy your desired bitcoin. Consider strategies such as dollar cost averaging (DCA). This means buying a fixed amount of bitcoin at regular intervals, regardless of price.
Once the transaction is completed, you will be a proud Bitcoin owner. congratulation!
Of course, exchanges are not the only investment method.
bitcoin investment fund
A Bitcoin investment fund is a great way to get in touch with cryptocurrencies without having to buy and store them yourself.
These funds are managed by professionals who invest in Bitcoin on behalf of their clients, with the goal of generating returns above the overall market.
It is important to note that these funds invest via “contracts” or “futures” so prices may not actually reflect the exact price of Bitcoin. movements may also not be directly correlated. Here is a comparison of his BTC and his GBTC (fund) over the last 5 years.
1. Exchange Traded Funds (ETFs)
A Bitcoin ETF is a fund that trades on an exchange like a traditional stock. These funds track the price of Bitcoin and offer investors exposure to the cryptocurrency market. ETFs are easy to buy and sell, and their prices fluctuate throughout the trading day.
Bitcoin ETFs will appeal to investors who are already familiar with investing in the stock market and prefer to have a diversified portfolio of stocks and cryptocurrencies. Additionally, Bitcoin ETFs are subject to regulatory oversight and may be suitable for investors looking for a way to invest in Bitcoin that is regulated by financial authorities.
There are several ETFs on the market.
- ProShares Bitcoin Strategy ETF (BITO)
- Valkyrie Bitcoin Strategy ETF (BTF)
- VanEck Bitcoin Strategy ETF (XBTF)
You can also short Bitcoin with the ProShares Short Bitcoin ETF (BITI).
2. Bitcoin trusts and mutual funds
These funds are managed by investment professionals who decide which assets to invest in and when to buy or sell.
Trusts such as Grayscale Bitcoin Trust and Osprey Bitcoin Trust hold Bitcoin as an underlying asset. This allows investors to tap into Bitcoin’s return potential without actually owning the cryptocurrency itself.
The Trust’s shares are traded on the over-the-counter (OTC) market, providing access to retail investors who may not have access to a cryptocurrency exchange.
Advantages of Bitcoin Fund
- Diversification: Investing in a Bitcoin fund can diversify an investor’s portfolio as the fund may invest in other assets in addition to Bitcoin.
- Professional Management: Bitcoin funds are managed by experienced financial professionals with expertise in the cryptocurrency market.
- Accessibility: Investing in a Bitcoin fund is usually easier and more convenient than buying and storing Bitcoin yourself.
Risk of Bitcoin Funds
- Volatility: Bitcoin is a highly volatile asset and investing in Bitcoin funds can expose investors to significant price volatility. It is important to remember that there is always the risk of losing money, even for professional managers.
- price: Bitcoin funds charge fees for operation and administration, which can eat into your earnings.
Overall, investment funds may be a good choice if you value a hands-off strategy and assurance that your money is in professional hands. is always recommended.
However, if you want to keep ownership of your assets (or invest for the long term without worrying about fees), you may want to consider the third option, self-custody.
How to use and invest Bitcoin via self-custody
One of the major drawbacks of holding Bitcoin on an exchange or investment fund is the constant risk of dealing with mismanagement by custodians. Also, exchanges are often not insured like banks, so losses due to external factors are not always recoverable. See Celsius, BlockFi, etc.
So you may have heard the phrase “”.Not your key, not your cipherBasically, if you do not own virtual currency through self-custody, you cannot truly own virtual currency.
Self-management in crypto means that you have full control over your funds. All sending, receiving and storing of Bitcoin and digital currencies are done without the involvement of third parties.
In a way, you are your own bank.
Of course, it is important to note that self-custody requires a certain level of technical knowledge and responsibility, as managing your own private key carries risks. However, if you are looking for maximum control and security over your investment, Here are four steps to get you started on the self-custody path.
1. Get a wallet
There are many Bitcoin wallets to choose from, including desktop, mobile and hardware wallets. Each has its own advantages and disadvantages in terms of security, accessibility, and usability. As such, you should research and compare your options to find the one that best suits your needs.
For maximum security, we recommend getting a hardware wallet. You can see some of our top picks for cryptocurrency wallets here.
2. Set up your Bitcoin wallet
After choosing a wallet, you need to download and install it on your device or hardware.You should also create a strong password and backup your wallet seed phrase, A series of randomly generated words used to recover a wallet if lost or damaged.
It is very important to keep your seed phrase in a safe place. It is estimated that around 3 million BTC were lost, often due to inability of users to access it.
do not share seed phrases
And ideally, don’t type your seed phrase into a computer or take a picture of it.
3. Buy Bitcoin
The annoying part is that you cannot simply buy bitcoin using a self-custody wallet. If you are mining bitcoin or receiving it as payment, you can use this directly.
However, when using fiat currency, an exchange is required. So, you can make your first purchase by choosing your favorite exchange above and then transfer your bitcoins.
When you set up your wallet, you are given a unique Bitcoin address (a long series of letters and numbers) or a QR code that links you to your wallet. It can be used to transfer bitcoins from exchanges to self-custody wallets.
4. Protect Bitcoin
Once you buy bitcoin, you need to keep it safe. Depending on your wallet, additional steps may be required, such as enabling two-factor authentication. We recommend hardware wallets over software wallets for maximum security.
Also, try to avoid two-factor authentication for text messages (SMS). This can be easily hacked.Instead, use an app-based authenticator like authoritative.
final thoughts
Bitcoin is a great way to diversify your portfolio and potentially generate big returns in 2023 and beyond.
With the variety of investment options we have discussed (self-custody, cryptocurrency exchanges, investment funds), you are sure to find a strategy that can meet your needs and risk tolerance.
As with any speculative asset, investors should always conduct proper research. Of course, don’t invest more than you can afford to lose. Bitcoin can grow significantly, but it can also hit $0.
But if you’re willing to educate yourself, explore options, and make well-informed decisions, investing in Bitcoin in 2023 is set to reshape the financial industry. could be an opportunity to participate in a rapidly growing market.
