How To Invest in Bitcoin: 5 Steps

Most people had never heard of Bitcoin in 2010, and even fewer would have considered it an investment-worthy asset. But a decade later, investing in Bitcoin is growing in popularity with advances in cryptocurrency, blockchain technology, and the metaverse.

How To Invest in Bitcoin

Investing in Bitcoin has been compared to investing in “digital gold.” Setting aside the inflation-hedge claims of Bitcoin enthusiasts, comparing it to gold is a good analogy when considering the myriad ways to invest in Bitcoin.

Invest in Companies That Utilize Blockchain Technology

One way to get Bitcoin exposure in your stock portfolio is to invest in companies that use Bitcoin and the blockchain technology on which it's based. 

Invest in a Bitcoin ETF

An ETF is a specialized investment vehicle that tracks the performance of a particular asset without the investor having to own the actual asset itself. It takes away the hassle and security risks of owning Bitcoin directly and opens the doors for anyone with a brokerage account to invest in Bitcoin.

Participate in Bitcoin Mining

Bitcoin mining is a way to receive actual Bitcoin in exchange for lending your computing power to solve complex math problems and completing blocks of verified Bitcoin transactions on the blockchain.

Purchase Bitcoin Directly

Last but certainly not least on the list is purchasing Bitcoin directly. If you are looking for a pure-play on the price movements of Bitcoin, there is no better way than to own the asset itself.

How To Buy Bitcoin

If, after evaluating the pros and cons of investing in Bitcoin, you decide you want to own it for yourself, there are a few things you need to know.

1. Decide Where To Buy Bitcoin

The first step in buying Bitcoin involves choosing a cryptocurrency exchange to make your purchase. These exchanges offer a platform to buy and sell Bitcoin and many other alt-coins. 

2. Choose a Bitcoin Wallet

After purchasing Bitcoin, it is stored in a wallet. There are two kinds of wallets: a “hot wallet” and a “cold wallet.”

3. Connect Your Bank Account To buy and sell Bitcoin, you will need to link a bank account to your cryptocurrency exchange or wallet. This process is similar to connecting a bank account to a traditional investment account and allows you to exchange dollars for crypto coins.

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