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How to start investing in bitcoin in 5 steps



If you want to buy Bitcoin, but don’t know where to start, this article will give you a few steps to follow and better understand the subject and get started the right way.

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1 – Study

This market is very new, so the currency turns out to be very volatile, which means that prices can vary significantly in a short period of time. So, the first thing you should do before entering any BTC value, is to understand what Bitcoin is and how it works to first have a very clear thesis of why you want to invest in it.

Unfortunately, it is common for people to buy only out of fear of losing appreciation (a feeling known as FOMO), and soon become scared and sell with the first downward variation of 3, 5 or even 10%, losing a lot in a short time.

So, to really understand what the technology differentiates and why you should keep at least some fractions you can read Fernando Ulrich’s book, for example, or watch some documentaries on Netflix like Banking on Bitcoin, The End of Money as We Know It or The Blockchain and Us.

If you prefer to watch short videos, but rich in clear and objective information, watch the videos from the Cointimes channel on YouTube and if you want to hear an excellent TED on the topic, watch Don Tapscott’s. Anyway, there are many contents that you can consume, including in different formats, which explain a little about what Bitcoin is, why it was created and what some important voices in the market say.

2 – Emergency reserve

If Bitcoin is going to be your first investment, then take a small step back. Do you already have an emergency reservation? Unforeseen events happen and you must be prepared for them, remember how volatile Bitcoin can be?

So, you don’t want to possibly have to liquidate them at a big loss because something unexpected has happened and your emergency reserve won’t handle the situation. Going through this pandemic, this thesis becomes even clearer to show the importance of separating a reserve of about 6 months from your monthly expenses in fixed income with daily liquidity (money always available to be redeemed).

It serves to make you calm to invest, even if you lose your job or suffer a salary reduction, as was common in this crisis, you have time with money in your pocket to restructure and recover what you lost without having to dispose of the investments long term.

The emergency reserve is especially necessary when you intend to venture into high-risk investments such as the stock exchange, startups or cryptocurrencies. This money saved not only gives you security, but also the peace of mind to make better investment decisions with that portion that you are willing to risk.

3 – Choose a broker

You will now need a place to buy your first bitcoin units (or fractions). Foxbit is certainly one of the safest, and has been active in the market since 2014, being one of the most traditional. And when it comes to global brokerage, Binance stands out today in volume and liquidity for crypto trading.

But today there are several bitcoin exchanges in Brazil and many of them are doing an excellent job, an interesting survey that you can do is to observe their ratings on Reclame Aqui and decide if their level of service is right for you.

After choosing one of them, you will need to do the entire registration process. Some of them have an application, while in others you will need to enter through the broker’s website, but for all the procedure is very similar: create your account and send your documents. This is a normal process, it happens in the traditional market and it happens in the cryptocurrency market.

The deposit at Foxbit, for example, has a minimum amount of R $ 25. So you can make very small purchases, sending money can be via Pix, so very fast and without fees. In the case of Foxbit, it has a space for easy purchase, where in a few clicks you execute your order and already guarantees some bitcoins for you.

But now just wait for Bitcoin to yield and keep making money? No, something that should be very clear to you is that Bitcoin can appreciate, but not pay dividends or interest on capital like stocks. What happens is that the price of BTC varies over time, so if you had bought a little earlier this year (01/01/21), the same amount of BTC today would be worth more, giving you the opportunity to sell profits or continue to maintain them for the long term.

4 – Create a portfolio

Now that you have bitcoins, you need to take care of their security. It is not recommended that you use the broker as if it were a wallet, because there your cryptocurrencies are in the custody of the company and not in fact with you.

After making the purchase on these platforms, you have the option to transfer the bitcoins to a personal wallet. There are different types of portfolios such as hardware, which are physical and those for mobile or desktop. You can check out the best bitcoin wallet options in this article of ours and be sure to read all the tips in our post “After all, how to ensure the security of bitcoins?”

And now, is it over? No, and I’m going to show you why with data in the next step.

5 – Recurrence of investment

The best thing you can do when investing in Bitcoin is to buy periodically. I am going to show you an example of what could have happened to your investments in the last few years if you had invested little by little in bitcoin.

Below you see a simulation of what could have happened to your portfolio if you allocated $ 10 (approximately R $ 57) per month in Bitcoin since the beginning of 2020.

In the end, you would have spent $ 140, around 800 reais, but would have accumulated 700 dollars, or the equivalent of 4 thousand reais, just guaranteeing a good average price by buying every month. On the chart, the black line is the amount invested and the yellow line is the amount depending on Bitcoin variations.

And even in times of decline, recurring investment can help you, minimizing your losses and later balancing your profits. You will always be very thoughtful, so just organize yourself to provide a small amount that can benefit you immensely in the long run.

A very easy and effective way to buy every month without worrying about the quote is with Coingoback Loop, where you choose a subscription of R $ 100, R $ 250 or R $ 500 and pay every month with a credit or debit card. You can understand exactly how this works by clicking on this link.

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