Can I trust cryptocurrency investment? What’s the safest way to buy Bitcoin (BTC)? These are some of the questions that many people linger with before trying their hand at crypto.
Well, crypto is quite volatile but highly profitable when the values swing up in short timeframes.
Let’s take a case study of BTC’s sudden drop in value in May 2021. The coin plunged 30%, hitting nearly $30,001.51 as investors intensified their portfolio. A few hours later, the coin bounded to almost $38,205.49 at around 3 p.m. ET.
What fueled the sharp drop? Tesla had just announced it would acquire $1.5 billion in crypto assets. This affected all major crypto coins, including ETH which plunged more than 22%.
This is just one risk associated with BTC investment. Another great risk that proves rampant is scamming. These scams usually target investors hoping to buy in on BTC due to insufficient regulation and anonymity of the digital transactions.
So, what’s the safest way to buy and own Bitcoin? How do you ensure that your BTC portfolio is safe from scamming predators? This article highlights five tips that help you safeguard your BTC investment.
1. Start Your Investment by Doing In-Depth Research
The safest way to buy and own Bitcoin is by conducting in-depth market research. Even before deciding on BTC, it’s imperative to note that there are over 4,000 currencies in the crypto industry. So, you have a myriad of options to explore.
Remember, BTC investment is nearly the same as stocks, only that it’s still in infancy. Start your research by evaluating the factors that should prompt you to invest in BTC. For instance, do you want to own BTC directly or through derivative future contracts?
Future contracts yield investment returns in the currency’s trends. On the other side, direct BTC ownership increases your profits dollar-wise. You earn as the dollar rises on the currency. The latter is a good option because you can gain more even with minimal capital.
Alternatively, you can invest in BTC through commercial transactions. However, you must report this investment to the IRS when filing your taxes. That’s the flipside.
2. ATM Action Provides the Safest Way to Buy Bitcoin
ATM action offers the easiest and safest way to buy Bitcoin. No conventional way beats the convenience of these machines.
The purchasing or cash-out process is as seamless and hassle-free as it sounds on this blog. It’s like depositing money to your bank ATM and getting a receipt.
Investors deposit their fiat currency and own BTC in seconds. You can research BTC ATMs near your location on the internet. Just type your location, the virtual tokens you wish to buy, or cash out, and you’ll find a suitable ATM within your proximity.
Many crypto sites have this information ready. However, gather as much information as possible about the ATM before doing any transaction. For instance, can you use a debit card instead of cash? Can you purchase other crypto assets aside from BTC?
Currently, there are more than 42,226 BTC ATMs spread across the country. These ATMs allow investors to use cash, debit cards, or other digital tokens to purchase BTC. Canada reportedly has 5,089 ATMs, while the UK has 303.
3. Buy BTC on a Peer-to-Peer (P2P) Trading Platform
P2P platforms also offer the safest way to buy and hold Bitcoin. As the name suggests, you do transactions directly with a peer seller or buyer.
Peers usually charge varying rates and prices. It will help if you take your time to find a relatively affordable option.
Investors can explore multiple payment options in P2P platforms. These include mobile money wallet options such as PayPal and Cash App or even direct bank transfers. If you’re making a significant investment, you can meet the seller/buyer for a cash-in-person exchange.
When choosing a buyer or seller, check their reputation and transaction history. You can still fall in the hands of the bad guys here.
However, it’s imperative to note that not all P2P platforms guarantee complete privacy. Investors may undergo varying levels of identification.
For instance, some platforms use Know Your Customer (KYC) protocols and anti-money laundering policies. In that case, you’ll submit your identification details. On the contrary, some platforms will only ask for a valid email address.
4. Investing Through Bitcoin Debit Kiosks
Bitcoin debit kiosks also offer the safest way to buy BTC. This alternative is a go-to option if you need a personalized experience.
Currently, BTC debit kiosks are only accessible to US investors. However, they offer the easiest and safest way to buy Bitcoin like ATMs.
For instance, you can buy your BTC through a direct money transfer or regular bank deposit. Investors don’t deal with any third party.
You send the cash deposit directly to the seller’s bank. Alternatively, you can remit the payment via MoneyGram or Western Union.
This method is safe because both the buyer and seller retain the proof of transaction. It’s nigh impossible to get conned through BTC debit kiosks unless someone steals your identity. That said, always keep your BTC details safe and secret.
5. Hot or Cold Wallets?
The safest way to buy and store Bitcoin depends on your wallet. For instance, hot wallets are ideal if you’re holding BTC for the short term and plan to sell. On the other hand, cold wallets are extremely secure and suitable for long-term investment.
Unlike hot wallets, cold wallets don’t have any links to the internet. Cold wallets are physical devices with unique access codes. Even if someone steals the device, they can’t hack your BTC investment unless they have these codes.
While hot wallets are free, you’ll part with up to $150 for a cold wallet. Also, investors who opt for hot wallets own but don’t control the public and private keys.
Buy and Sell BTC Coins Safely
Platforms facilitating BTC investment are proliferating. Leverage our tips to find the safest way to buy Bitcoin and safeguard your portfolio.
With a secure platform, you only need to worry about market trends. Moreover, you can relinquish your portfolio anytime you want.
To get started, check other articles on this site for a more in-depth insight into crypto exchanges.