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How to start investing in bitcoin in 5 steps

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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.

(embed) https://www.youtube.com/watch?v=fEpxvWXNIv4 (/ embed)

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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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Dogecoin

In Argentina, several businesses accept payments in BTC, DOGE, other cryptos

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Imagine going on vacation and being able to pay both your Uber driver and Airbnb host with crypto. This sounds like a fantasy for many but is reportedly now a reality for users in Argentina.

Regional news publications announced that the crypto company Bitrefill was offering 138 prepaid cards in order to pay to different businesses. Some taking part in the initiative include Frávega, Lacoste, Dexter, Isadora, Cheeky, Airbnb, Uber, Movistar, Claro, and Personal.

Users can pay in six different cryptocurrencies, which are Bitcoin [BTC], Ether [ETH], Dogecoin [DOGE], Litecoin [LTC], Tether [USDT], and Dash [DASH]. However, in order to use the card, assets are first converted to dollars or euros, and then converted again to Argentine Pesos [ARS] to complete the transaction.

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Analyzing Argentina

What does Bitrefill’s initiative reveal about the state of crypto adoption in Argentina? Data may hold the answer. The Blockchain LatAm Report 2021 by Sherlock Communications stated,

“…66% of respondents were most concerned with protecting their savings. This reflects recent inflation rates in the country: 36.1% in 2020 and 53.8% in 2019, the highest in 28 years.”

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Furthermore, as people in Argentina are legally restricted from buying more than a small and taxable amount of U.S. dollars every month, the attraction of crypto is easy to understand. Adding to this, there are around 20 legal crypto exchanges in the country, and one of them – Ripio – hit a million users in 2020.

However, it’s worth noting that there is a tax of 15% on income gained from selling digital currencies. At the last count, there were 12 Bitcoin ATMs/tellers in Argentina. Out of these, 11 were located in Buenos Aires.

Not just a shopping spree…

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Apart from crypto adoption, companies are also eyeing the country as a destination for Bitcoin mining. One major reason for this is the cheap cost of electricity in Argentina, with subsidies for the same.

In October, the Canada-based Bitfarms announced that it was constructing a 210 megawatt BTC mining farm in Argentina. More than 55,000 new mining rigs are expected to be on-site. According to the Cambridge Bitcoin Electricity Consumption Index, Argentina’s share of the average monthly hashrate in August 2021 was 0.05%.

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Hedge Fund Billionaire Paul Tudor Jones Says Gold Losing the Race Against Crypto As Inflation Hedge

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Hedge fund billionaire Paul Tudor Jones says that crypto is currently his preferred way of hedging against inflation.

In a new interview with CNBC, Jones says that crypto has acted as a great hedge as of late and is winning the race against gold.

“Crypto has been a great hedge… I said then, I said now, I’ve got crypto in single digits in my portfolio. I have a small trading position in our fund. I do think we’re moving into an increasingly digitized world. Clearly, there’s a place for crypto, and clearly, it’s winning the race against gold at the moment. So yes, I would think that would also be a very good inflation hedge. It would be my preferred one over gold at the moment.”

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The billionaire, who heads investment management firm Tudor Investment Corporation, says that while the new Bitcoin futures exchange-traded fund (ETF) is a regulated and legitimate product, he thinks a better investment is to own physical BTC.

“I think a better way to get in would be to actually own physical Bitcoin, to take the time to learn how to own it and carry it. I think the ETF will be fine. I think the fact that it’s SEC approved should give you great comfort.”

The investor says that embracing Bitcoin is part of the American character and that China’s refusal to do so may have economic consequences for the country in the future.

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“I think crypto is here to stay. Look, this is the United States of America right? The reason we’re the most dominant economic power [in] the world is because we unleash our individual entrepreneurialism and creativity. And you’re seeing China do the exact opposite. That place is on, economically, a slow boat to the South Pole. As long as the US can continue to unchain our entrepreneurs, we’re going to always be in the dominant position.”

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The Real Opportunity for Bitcoin and Crypto Will Come From This Group of Investors, Says Shark Tank Star Kevin O’Leary

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Shark Tank investor Kevin O’Leary says that a group of investors could transform Bitcoin (BTC) and the crypto markets when they decide to allocate capital to the space.

In a new interview with Bitcoin bull Anthony Pompliano on The Best Business Show, the celebrity investor says that there will be a massive opportunity for crypto once sovereign funds in the Middle East invest in digital assets.ADVERTISEMENT

“The real opportunity is not with the family offices or hedge funds that operate out of the Middle East. The real money is in the actual sovereign funds in both Saudi Arabia and the United Arab Emirates. It’s billions and billions and billions of dollars. 

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They have not allocated to crypto yet. When that happens, you’ll see it reflected in the price of Bitcoin. There’s no question about it. They have such long-term views in those funds, and the funds are so large.”

O’Leary says that given the size and number of the funds, even a 1% allocation would have an impact on the markets.

“They generally abide by discipline and principles of risk diversification, so they may have a mandate, for example, that no stock represent more than 5% of the fund or no sector more than 20%. Those are diversification mandates that are used all around the world, and they do that there, too.

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But when you’re dealing with a multi-billion dollar mandate, and some of these, they’re the largest pools of capital in the world. A 1% allocation is a tremendous amount of money.”

The investor says at the moment, Bitcoin is the only digital asset on the sovereign funds’ radar. He predicts that they could easily decide to allocate 1-3% just on BTC.

“I speak to those guys almost every day. They would immediately go to 1% to 3% on Bitcoin alone. Just Bitcoin, let alone Ethereum or any level-1 or level-2s on the chain. They haven’t even thought about that. They’re just thinking about Bitcoin and owning that as an asset. The amount of capital that will come into this market when the regulator approves Bitcoin as an asset or currency or a security, or whatever they’re going to regulate it as is going to be unbelievable.”

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