fbpx

How to get started with Bitcoin

Thinking about investing in crypto and want to buy Bitcoin for the very first time in your life? Fetch yourself a cup of your favourite drink, put some music on, and let’s have the most important 2-min read of your life—just kidding, please don’t stress. From this article, you’ll only learn how to purchase Bitcoin and secure it on a long-term basis.  

Key steps:

  • Create a Bitcoin wallet, most likely you’ll need two: an online and an offline wallet
  • Buy Bitcoin on one of the exchanges by choosing a payment method and undergoing KYC
  • HODL, or don’t sell the asset over a specific period of time letting it grow in price
  • Average into your losses: use VCA & DCA
  • Buy low / sell high if you’re a long-term investor but note there are additional risks to this approach

Step one: create a Bitcoin wallet

Let’s assume you don’t have much time and don’t even want to delve into technicalities—just know that there’s not one but rather two wallets you’ll probably need: an online wallet and an offline wallet detached from the Internet. 

Why two wallets? When you buy your first Bitcoin and decide on your investment strategy, you’ll most likely want to keep some of your funds away from the Internet. Read more on the wallets here.

Step two: buy Bitcoin 

There are several ways to buy Bitcoin, but the most popular and the easiest one by far is on a crypto exchange. In order to buy Bitcoin from such an exchange, you’ll need to have either other cryptocurrencies at your disposal or a credit/debit card

Many trading venues offer other payment methods, too, such as wire transfer, bank transfer or PayPal

So, choose a crypto exchange, undergo the KYC procedure, define the preferable payment method—and there you go: the asset of your choice is in your pocket.

Congrats! You’ve purchased your first Bitcoin, most likely, a fraction of Bitcoin! Now, what can you do to increase your investment? Let’s see.

Step three: HODL 

A simple crypto trading strategy that is good during uptrends is HODLing, or holding for dear life. While using such an approach, an investor normally thinks long-term and plans to not sell the asset over a specific period of time letting it grow in price. 

With this strategy, you might want to store 80% of your crypto funds in your cold-wallet accounts and trade 20% of them actively across margin and futures products.

The sky’s the limit here, you can allocate the funds the way you like. The key word, however, is hodling, or holding for an extended period of time.  

Step four: average into your losers 

If an investor wants to average into their losers, they can divide up the total amount to be invested across periodic purchases of a target asset. Such an approach reduces the impact of volatility on the overall purchase. 

With the dollar-cost averaging (DCA) strategy, you’re free to decide the schedule for buying an asset—monthly, weekly, bi-weekly, daily, etc.

With the value-cost averaging (VCA) strategy, an investor contributes to their portfolio based on the percentage gain or loss made previously.

Step five: buy low / sell high 

This is by far the most popular strategy among traders who don’t want to spend much time on scalping, day trading, mirror trading etc. 

The name of the strategy is self-explanatory: you buy when the asset touches the dip, and sell when it rises in value. 

Probably, on the long-term basis, this strategy is the one that looks favourable for beginners and those investors who don’t want to spend time in front of the screen 24/7. But on the other hand, by using only this strategy, you can lose momentum and miss other opportunities.

Conclusion

To buy Bitcoin is no rocket science, but it takes some preparation. You should download a wallet and then purchase the asset itself on one of the crypto exchanges either with a credit card, PayPal or another payment method. No worries, it’s not as hard as you think. 

It is also perfectly fine to purchase your Bitcoin and keep it on the exchange until you’ve accumulated an amount that you believe needs to be further secured by placing some in cold storage. This is all pretty straightforward.

The more challenging part is probably trying to not only secure your investment but increase it. The key here is to try different things while you find something that suits you. There are many trading strategies such as hodling, averaging, buying low and selling high and so much more.

Learn more about Bitcoin on AAX Academy.

Want to learn more?

Stay up to date on the latest news, industry trends and developments.

Choose a language