Finance

Buying Bitcoin- Top Things to Watch Out For

buying bitcoin

The main reason you’re reading this is most likely because you’re considering investing in Bitcoin. Satoshi Nakamoto introduced Bitcoin in 2008 before launching it officially in 2009. However, this virtual currency received significant mainstream recognition in 2017 due to its rapid price increase. People, called miners, create digital coins by solving complex mathematical puzzles using powerful computers and special software.

Blockchain is the technology that powers Bitcoin. This technology creates a decentralized network of nodes or computers or a distributed ledger that records and tracks all Bitcoin transactions. Thus, this ledger is like an extensive public record with details of all Bitcoin transactions. What’s more, the Bitcoin network monitors everything, thereby ensuring the integrity of this virtual currency and Bitcoins’ ownership.

Over the years, Bitcoin’s value has increased exponentially. Although this virtual currency has been through ups and downs, its price has been growing. That’s why early adopters made good returns on their investments after selling their tokens at a value way higher than the buying price.

Today, people have many platforms that sell this virtual currency. For instance, you can purchase this digital currency on Bitcoin Up. Bitcoin Up is an auto trader app that allows you to buy, sell, or trade Bitcoin. Perhaps, you can read BitIQ before using this platform to trade this cryptocurrency. That way, you’ll know whether it’s a real crypto trading bot or not. Also, consider these things when purchasing and selling Bitcoin.

Upside/Downside

The potential gain of a Bitcoin trader relates directly to whether they enjoy direct virtual currency ownership or through futures contracts. Direct Bitcoin ownership gives you profit increases whenever the dollar increases in this virtual currency. However, when you own Bitcoin via futures contracts, you stand a chance to gain more quickly even without fronting much capital. Nevertheless, direct Bitcoin ownership limits your downside, while you might lose a lot of money with a futures contract.

Ownership

Before purchasing Bitcoin, decide what you want to own. For instance, do you want to hold Bitcoin or its derivative like a futures contract? Ideally, take your time to research Bitcoin ownership. Understand what each ownership type means to make a more informed decision.

Cost

Depending on where or how you buy Bitcoin, the commissions you will pay can differ widely. For instance, you get a more significant action piece with futures contracts at a relatively low price. However, some brokers charge customers a higher percentage when they buy Bitcoin from them directly. Some of these percentages may not seem like a lot of money. However, the amount can add up quickly and eat your profits away when trading more often.

Security

When trading Bitcoin, security is always among your biggest concerns. That’s because you invest a considerable amount of your money in this digital currency. If not careful, you could end up with severe security issues that could lead to significant losses.

For instance, criminals can hack the crypto exchange you use, leading to the loss of your Bitcoin. Therefore, investigate the crypto exchange or the trading software you use to understand the security measures it has in place. Also, find out whether other customers have complained about security when using the platform you want to use.

The Bottom Line

You want to reap maximum returns from your Bitcoin investment or trading. Therefore, consider these factors to use a platform that will enable you to achieve this goal. Ideally, use a crypto exchange that allows you to minimize costs, ensure your security, and select your preferred trading approach. Understand that each crypto exchange charges some fees. Therefore, ensure that the platform you choose charges reasonable amounts to maximize your investment returns.

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