bitcoin

How to Buy Bitcoin safely in 2021? Is it too late to invest now?

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Bitcoin has been on a rollercoaster ride for a while now. The cryptocurrency that started off the entire cycle has gone up and down over the past few years, clearly showing that it is still extremely volatile and unpredictable. Due to this volatility, Bitcoin has never really been considered as a serious currency in most countries and is instead used for trading only.

However, 2021 might just be the year during which Bitcoin finally establishes itself as a serious competitor to fiat money. On the backend of a relatively silent 2020, Bitcoin started to really catch some pace by the end of the year. And now that we’re in January, it has already soared to lofty heights of over $35,000 USD (even touching 40k at one point).

The reason for such a sharp increase in the value of BTC is something that’s still a relatively unknown quantity. Having said that, some experts do suggest that it is due to the cryptocurrency’s finite supply in the context of low-interest rates and a financial crisis that COVID-19 has brought upon this world. And, while most people are still trying to get in and invest as the cryptocurrency has been predicted to go even higher than $100K USD, the ‘Bitcoin Bubble’ has been met with a lot of skepticism as well.

Why is Bitcoin so volatile?

While the haphazard trajectory of Bitcoin may not make much sense if you look at it right now, the trends have always been similar to the current one. The currency stays dormant for the greater part of any given year and then explodes at the end, continuing its climb into the spring. Once it is up there for a little while, the ‘bubble’ bursts and we’re back to square one. And, while this current jump is very similar in nature, it is still an anomaly just due to the sheer size of it.

So, investing in Bitcoin is something that’s still risky just due to its volatility but can get you some incredible returns as well. And, as they say, you cannot really expect a high reward without any risk. If you’re new to the Bitcoin train and aren’t really sure how exactly you’re supposed to buy this coveted asset, all this jargon can get confusing real fast. What is a wallet? Coinbase? Where do I even keep my cryptocurrency?

These are all questions that come to one’s mind and we’re here to answer them all for you. So, here’s how you can invest and buy your very own Bitcoin via a secure and safe method in 2021:

Step 1: Setting up a Cryptocurrency Wallet

Before you start spending your bucks to buy some BTC, you need a place to store them in. Since Bitcoin is a digital cryptocurrency, you can’t exactly hold it in your hands or carry it around in your pockets. However, just like there is a wallet for your real-life currency, there is one for your digital currency as well. So, the first thing that you need to do before buying Bitcoin is to set up your very own Cryptocurrency wallet.

Bitcoin Blockchain Wallet
Image: Bitcoin Wiki

There are plenty of Cryptocurrency wallets out there but Blockchain is arguably the most famous one. It is relatively safe and secure as compared to other lesser-known wallets. Furthermore, the UI is also very intuitive and easy to use for newer users. All you have to do is head over to the Blockchain website and select the Create a Wallet option to sign up.

Step 2: Getting your papers ready

While Bitcoin is still a wild goose that many can’t comprehend, some countries have still been trying to regulate it to make things more traceable and meaningful. The U.S. is one of those countries as it has some pretty robust security measures in place to regulate the trade of cryptocurrencies.

So, under the U.S. SECP’s regulatory policies, users who are trying to get into BTC trading need to verify their identities for their wallets. If you’ve ever bought any stocks in the U.S. stock market, the process will seem very familiar to you. All you need is to verify your identity by providing official documents like the driver’s license and your Social Security Number.

Step 3: Choosing a Cryptocurrency Exchange

Unlike physical currency, you cannot get any Bitcoin directly from your bank. Since it is an asset people usually trade, you need to head over to a cryptocurrency exchange to get it. A cryptocurrency exchange is an online marketplace that allows you to trade different cryptocurrencies including Bitcoin.

So, similar to how you get stocks at the stock exchange, you can buy your very own Bitcoin at the Crypto exchange. Back in the olden days, trading Bitcoin was a very iffy and long process but newer intuitive currency exchanges have mitigated that issue and have turned the entire process into a breeze.

Coinbase Bitcoin
Image: Coinbase

There are plenty of Cryptocurrency exchanges out there like Gemini and Coinmama but Coinbase is arguably the most popular one. Furthermore, it is also supported and recognized by most authorities and banks around the United States. So, we’d definitely recommend Coinbase just because of how easy it is to trade currency through it.

In order to sign up, all you have to do is head over to the Coinbase website and select the Get Started button. After that, just fill in your personal details and you’ll enter into a whole new world of Bitcoin trading.

Step 4: Buying Bitcoin

Now that you’ve set up your Cryptocurrency wallet and have also found an Exchange for yourself, you’re finally ready to trade and buy BTC. All you need is either a credit card, a debit card, or a bank account that you can transfer cash from. Once you’re set with that, just head over to the Cryptocurrency exchange of your choice like Coinbase and select the Buy/Sell tab.

Now, it’ll ask you about the currency that you wish to buy or sell. So, under the Buy tab, select Bitcoin and enter the amount that you want to buy. It will automatically convert your USD amount to indicate how many BTC you’re buying and vice versa. Now, all you have to do is enter your payment details i.e. Credit Card information and click the Buy Bitcoin button.

If you wish to avoid hefty fees that can get imposed on Credit Card transactions, a bank transfer is a pretty good alternative. Once you’ve made the purchase, Bitcoin will now show up in your Coinbase wallet. However, since Coinbase is primarily an exchange, you need to shift your BTC to a safer place like the Blockchain wallet that you set up earlier. Just use the transfer option on Coinbase and Blockchain to seamlessly transfer cryptocurrency between the two.

Other methods of buying BTC

While buying Bitcoin off an exchange is the most common and secure method of acquiring some, there are other methods to get it as well. For instance, if you know someone who wants to sell their cryptocurrency, you could have a real-life transaction and just make them transfer the cryptocurrency over to your wallet.

Furthermore, some Bitcoin ATMs have also started popping up in cities around the world that allow you to deposit cash and convert it into BTC.

Overall, the future of Bitcoin and cryptocurrency as a whole seems fascinating as both a trading asset and as something that could potentially replace cash. Having said that, we’re not quite there yet and things don’t seem to be moving too fast either.

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