How To Buy Bitcoin, Dogecoin, Or Other Cryptocurrencies
While some cryptocurrencies, including Bitcoin, are available for purchase in US dollars, others require that you pay using Bitcoin or another cryptocurrency.
To purchase cryptocurrencies, you will need a “wallet”, an online application that can hold your currency. Generally, you create an account with the exchange, after which you can transfer real money to buy cryptocurrencies such as Bitcoin or Ethereum.
Coinbase is a popular cryptocurrency exchange platform where you can create a wallet and buy and sell bitcoin and other cryptocurrencies. Also, a growing number of online brokers offer cryptocurrencies, such as eToro, Tradestation, and Sofi Active Investing. Robinhood offers free cryptocurrency trades.
The best cryptocurrency exchanges are safe, cost-effective, fast to set up, easy to use, and accept a variety of funding sources. Here are our picks for the best places to buy bitcoin.
Best places to buy bitcoin in 2021
Are cryptocurrencies a good investment?
Cryptocurrencies may rise in value, but many investors see them as mere guesses rather than real investments. Reason? Just like real currencies, cryptocurrencies do not generate any cash flow, so in order to win, someone has to pay for the currency more than what you pay for.
This is called the “greatest fool” investment theory. Compare this to a well-managed business, which increases its value over time by increasing the profitability and cash flow of the process.
“For those who see cryptocurrencies like Bitcoin as the currency of the future, it should be noted that the currency needs stability.”
As noted by NerdWallet, cryptocurrencies like Bitcoin may not be safe, and some prominent voices in the investment community have advised potential investors to steer clear of them. It is worth noting that legendary investor Warren Buffett compared Bitcoin to paper checks: “It’s a very efficient way to transfer money and you can do it anonymously and all that. The check is a way to transfer money too. Are checks worth a lot of money? Just because they can transfer money? ”
For those who see cryptocurrencies like Bitcoin as the currency of the future, it is worth noting that the currency needs stability in order for merchants and consumers to determine a fair price for goods. Bitcoin and other cryptocurrencies have not been stable at all for most of their history. For example, while Bitcoin was trading at nearly $ 20,000 in December 2017, its value then decreased to around $ 3,200 a year later. By December 2020, it is trading at record levels again.
This price volatility creates a dilemma. If bitcoins are much more valuable in the future, people are unlikely to spend and trade them today, which would make them less viable as a currency. Why spend Bitcoin when it may be worth three times its value next year?
Are cryptocurrencies legal?
There is no doubt that they are legal in the United States, although China has basically banned their use, and in the end whether it is legal depends on individual countries. Also, be sure to think about how you can protect yourself from fraudsters who see cryptocurrencies as an opportunity to lure investors. As always, beware the buyer. Back to top
How do I protect myself?
If you are looking to buy an ICO cryptocurrency, read the nitty gritty details in the company brochure for this information:
- Who owns the company? Known and known owner is a positive sign.
- Are there other major investors investing in it? It is a good sign if other popular investors want a piece of the coin.
- Will she own a stake in the company or just a currency or tokens? This distinction is important. Owning a stake means that you can share in its winnings (you are the owner), while buying tokens simply means you are entitled to use them, like chips in a casino.
- Has the coin really been developed or is the company looking to raise money to develop it? The further away from the product, the less dangerous it is.
Combing through the prospectus can take a lot of work; The more details, the better your chances. But even legality does not mean that the currency will succeed. This is a completely separate question, and it requires a lot of market knowledge.
But beyond these concerns, simply owning a cryptocurrency puts you at risk of theft, as hackers try to break into the computer networks that protect your assets. A high-profile exchange declared bankruptcy in 2014 after hackers stole hundreds of millions of dollars in bitcoins. These are not typical risks of investing in stocks and funds on the major US stock exchanges.
Should you buy cryptocurrency?
Cryptocurrency is an incredibly speculative and volatile purchase. Trading stocks in established companies is generally less risky than investing in cryptocurrencies such as Bitcoin.