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If you’re just been introduced to Bitcoin, you may be confused, intrigued, or actually interested in investing. Bitcoin can be a good addition to your portfolio, but it can seem a bit more complex than your average asset. However, bitcoin is also much more than just a digital currency. It has its own idiosyncrasies that make it significantly different, and you might be in for some surprises when you find them out. Here are a few things you should know before buying bitcoin for the first time.
Buying Bitcoin isn’t as Simple as it May Seem
If you think you can just hop on any exchange and get bitcoin for your money, think again. Some exchanges will only accept other cryptocurrencies, and you will need to have a wallet first before you can buy and store bitcoins. While many exchanges will give you a wallet, it’s always better to have one of your own in case the exchange closes, which has happened before.
There are many types of wallets out there but the most convenient ones are online wallets. If you’re looking for the best BTC wallet of this type, then you should look at Paxful. It works across all devices, is the best BTC wallet for beginners, and one of the most secure wallets on the market. This wallet can be used independently or while trading on their platform.
Bitcoin is Very Volatile
Bitcoin is much more volatile than your average financial asset or commodity, and it is certainly much more volatile than traditional currencies. That can be a pro or a con depending on who you’re talking to.
What this means is that Bitcoin is not for the faint of heart. Bitcoin went from $7,000 at the beginning of the year, to $5,000 around April, and is sitting at around $10,000 right now. So, make sure that you know what you’re in for before you invest, and don’t make the mistake of putting all your eggs in the bitcoin basket.
Bitcoin has a Strong Following
You can forget those talks about going to zero. At least not anytime soon. This is because bitcoin has a very solid following. This means that there will always be a basic demand for bitcoin, and it will always retain some value.
It is also the most recognizable and by far the biggest cryptocurrency by market cap. Not only that, but it’s also used as a ‘gateway’ coin to other cryptocurrencies. As we mentioned earlier, some exchanges still don’t accept fiat, which makes bitcoin the coin of choice for anyone trying to actively trade cryptocurrencies.
There are Other Cryptos out there
You should also take the time to educate yourself on other cryptos. Don’t become a religious bitcoin hoarder like so many misinformed investors out there. Educate yourself on blockchain technology and look at other projects. Some exciting things are going on in crypto, and some lesser-known coins could blow up. So, while it’s a good idea to have at least some bitcoin in your portfolio, try to find a few projects that interest you and have the potential for growth.
Bitcoin is promising and can be a great asset. Just make sure that you understand the fundamentals, not only bitcoin but cryptocurrencies in general.