Jasmine Birtles
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How to Buy Bitcoin For Beginners in 2024
Ruby Layram
29th Jul 2024
You’ve probably heard a lot of buzz about cryptocurrency, especially since recent events in the US presidential campaign! Quite a few people have forecast excellent things for Bitcoin, and other cryptos, this year which means that now could be a great time to add Bitcoin to your investment portfolio!
However, buying Bitcoin can seem daunting. After all, cryptocurrency operates in an entirely different market to stocks and shares which means that the process of investing in it is a bit different.
To make things easier, we’ve put together this handy guide about how to buy Bitcoin as a beginner in 2024.
We cover how to choose an exchange, fund your account, buy Bitcoin and provide some top tips for staying safe whilst doing so.
- Is now a good time to buy Bitcoin?
- Step 1: Choose an exchange
- Step 2: Fund your account
- Step 3: Place an order
- Step 4: Move Bitcoin to a secure crypto wallet
- Top tips for staying safe when you buy Bitcoin
Is Now a Good Time to Buy Bitcoin?
This seems to be the million-dollar question in 2024!
Unfortunately, the answer isn’t straightforward. Timing the market is almost impossible and cryptocurrencies, including Bitcoin, are prone to volatility.
Nevertheless, a lot of experts have shared pretty positive predictions for Bitcoin over the next few months. This outlook is fueled by:
- The recent Bitcoin halving
- Trump’s very vocal support for cryptocurrencies
- Increasing mainstream adoption of Bitcoin
- The rise of crypto ETFs
How to Research Cryptocurrencies
You should never take price predictions at face value. Instead, it’s important to conduct your own research before buying Bitcoin. You could call this step 1 of the process.
Just like you wouldn’t buy a house without checking out the neighborhood, you shouldn’t buy Bitcoin without some research.
Start by reading reputable news sources, following crypto experts on social media, and joining online forums like Reddit’s r/Bitcoin.
Look into Bitcoin’s historical performance, recent news, and market trends.
Also see: How to research stocks
Assessing Your Current Risk Tolerance
Next, take a good look at your financial situation.
Bitcoin is known for its volatility – it can soar and plummet pretty quickly. Are you prepared for that uncertainty?
Assess how much risk you can comfortably take on. It’s always wise to only invest money you can afford to lose.
Think of Bitcoin as a high-risk, high-reward venture, and decide accordingly.
Step 1: Choose an Exchange
Once you have researched Bitcoin and assessed your risk tolerance, the first step to buying Bitcoin is to choose a platform to buy it through.
Choosing the right platform to buy Bitcoin can make a huge difference to your investing experience – you want it to be reliable, user-friendly, and safe.
Centralized vs Decentralized Exchanges
First, understand the difference between centralized and decentralized exchanges.
Centralized exchanges are run by companies that provide a platform for trading and hold your funds in their custody.
They are user-friendly and offer robust customer support, making them ideal for beginners. Examples include Coinbase and Binance.
On the other hand, decentralized exchanges allow peer-to-peer trading without an intermediary.
They give you more control over your funds but can be tricky to navigate for newcomers. Examples include Uniswap and Sushiswap.
My Top 3 Crypto Exchanges
Of course, everyone is different and it is important to spend time shopping around before settling on a platform. However, here are my 3 favourite crypto exchanges for some inspiration!
- Coinbase: Coinbase is user-friendly with a simple interface and excellent security features. They even offer tutorials and rewards for learning about different cryptocurrencies.
- Binance: If you’re looking for a wide variety of cryptocurrencies and advanced trading options, Binance is a good choice. It’s slightly more complex but offers low fees and a range of features.
- Kraken: Known for its robust security and comprehensive trading tools, Kraken is a reliable option for both beginners and experienced traders. It offers a good balance between ease of use and advanced options.
Step 2: Fund Your Account
Once you’ve chosen an exchange, the next step is to fund your account.
Most exchanges allow you to deposit funds via bank transfer, debit card, or even PayPal.
Be aware of the fees at this stage! Some platforms may charge higher fees for credit card deposits compared to bank transfers.
Follow the prompts on your chosen exchange to add funds to your account.
Step 3: Search for Bitcoin
With your account funded, it’s time to find Bitcoin!
On the exchange, you’ll typically see a search bar or a list of cryptocurrencies. Simply type in “Bitcoin” or look for its ticker symbol, BTC.
Click on it to go to the trading page.
Step 4: Place an Order
When you have navigated to the trading page, you’ll see options to place different types of orders.
For beginners, a market order is the simplest – it allows you to buy Bitcoin at the current market price.
If you’re feeling a bit more adventurous, you can place a limit order, which lets you set the price at which you want to buy. Your order will only be executed if Bitcoin hits that price.
Enter the amount you wish to buy and confirm the transaction.
Also see: 5 cryptocurrencies that I would have in my portfolio
Step 5: Move Your Bitcoin to a Secure Wallet
While leaving your Bitcoin on the exchange might seem convenient, it’s not the safest option.
Exchanges can be hacked, and it’s always better to store your crypto in a secure wallet. Think of it as moving your cash from the bank to a safe at home.
There are two main types of wallets:
- Hot Wallets: These are online wallets that are convenient for frequent trading. Examples include MetaMask and Trust Wallet. They are secure but still connected to the internet, making them more susceptible to hacking.
- Cold Wallets: These are offline wallets, like hardware wallets or even paper wallets. They are the most secure option as they are not connected to the internet, but they can be a bit more long-winded to use.
Transfer your Bitcoin to your chosen wallet by following the exchange’s withdrawal process.
This usually involves entering your wallet’s address and confirming the transaction.
If this all sounds a bit confusing, don’t worry! Coinbase and eToro both have their own native wallets which can be used with just a few clicks.
*your money is at risk.
Top Tips for Buying Bitcoin Safely
- Do your research: Always stay informed about the latest news and trends in the cryptocurrency world. This will help you to make informed decisions.
- Secure your accounts with 2FA: Enable two-factor authentication on your exchange and wallet accounts. This adds an extra layer of security.
- Stick to reputable exchanges: Stick to well-known and reputable exchanges with a proven track record of security.
- Beware of scams: Be cautious of phishing attempts and fake websites. Always double-check URLs and never share your private keys or passwords.
- Start small: If you’re new to Bitcoin, start with a small investment to get comfortable with the process. Consider strategies such as dollar cost averaging to slowly build up.
- Diversify: Don’t put all your eggs in one basket. Consider spreading your investments across different cryptocurrencies and assets to reduce risk.
Buying Bitcoin can seem daunting at first, but with a bit of research and the right approach, it can be just as easy as buying stocks and shares.
Remember, the key is to stay informed, start small, and prioritize security. Many reputable platforms offer low minimum investments that make it possible to start with a small amount until you feel comfortable.
Are you interested in learning more about investing? Why not sign up to the MoneyMagpie bi-weekly Investing Newsletter? It’s free and you can unsubscribe at any time if you find it isn’t for you.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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