Investing in cryptocurrency isn't the same as investing in stocks and shares. This is a new market that performs differently to traditional investment vehicles.
If you've decided to invest some cash in Bitcoin, then you should think about the following three points before you take the plunge.
1. Don't Invest Money You Can't Afford to Lose
Many people find Bitcoin investing a lot more exciting and profitable than regular investment routes. Cryptocurrencies can go up a lot faster than other investments, giving you a far better rate of return in a much shorter timescale.
However, these markets are unpredictable and volatile. Your investments can also tank from time to time. While they usually recover, this can be a daunting experience for a new investor.
So, before you start, it's worth getting into the right mindset. Work out how much you can invest without putting yourself under financial stress.
Ideally, you shouldn't put more money into Bitcoin than you can lose. So, you might find it easier to start small and build from there as you get more experience.
2. Buy From a Reputable Source
The cryptocurrency markets aren't regulated in the same ways as other investment markets. It's important to buy your currency from a reputable source. If you don't, then you could get scammed.
There are plenty of established and secure centralized currency exchanges and sites you can use to make your first investment. Look for reviews on financial websites; check out ratings from other users. A little due diligence here pays off.
Plus, reputable crypto exchanges are also a useful source of information on Bitcoin and other cryptocurrencies. You can learn a lot of additional information that will help you manage your investments over time.
3. Choose the Right Wallet
Once you buy Bitcoin, you have to find somewhere to keep it. You need a storage medium, or wallet, to do this.
The easiest way to get access to a wallet is to buy your Bitcoin from an exchange. They hold your coins for you in your account wallet.
However, if you prefer to hold your own Bitcoin in an independent wallet, then you can buy these. Here, you hold your own Bitcoin virtually until you want to trade again.
However, you do need to manage your wallet password sensibly. If you lose the password, you lose access to your coins. You can't reset the password. So, if you worry that this might happen, then storing your coins on an exchange might make more sense.
For more advice on how to buy Bitcoin and store it safely, ask cryptocurrency specialists for advice.