How to Invest in Bitcoin?

Author & Guarantor: Anton Yurchenko
11 min read

The demand for cryptocurrencies is high, and many new investors want to benefit from the boom. But how to invest in Bitcoin and which crypto exchange is the right one? Crypto-Auditor.com clarifies the most important questions. 

As a result, the question of how to invest in bitcoin currency is normal and contemporary! And it’s super great you’re asking it!

Why Invest in Bitcoin

So, why invest in bitcoin? First and foremost: you can get extra rich! It’s clearly evident from the btc springs in 2020 and 2021.

There will never be more than 21 million bitcoins. That means no one will ever be able to create more arbitrarily. 

Bitcoins are transparent, durable and forgery-proof. Just like gold—only safer and more up-to-date, it can be sent around the world at the click of a mouse.

Bitcoin brings us back our independence, our security and our wealth.

Because in a future in which most jobs can be systematized and done by machines, many people—let down by the ‘false’ money system—would face a financial ruin.

Should You Invest in Bitcoin or Not?

Each investor is supposed to make the decision themselves. So, before we tell you how to invest in the bitcoin market, we’d need to know if you truly need to make an investment. Determine it for after reading the following fact!

The fact is that the price for Bitcoins rose sharply during the Corona crisis. That time, bitcoin rose by 308% within a year. What is special about this boom is that many professional investors are now investing in bitcoin and expressing their trust in the currency.

Now on, we’re sure if you ask yourself something like should I invest in bitcoin, your answer is even more than positive!

Ways to Invest in Bitcoin: Where to Invest?

If you want to invest in bitcoin or any other cryptocurrency, you can either go through decentralized or centralized crypto exchanges. 

How to properly invest in bitcoin? First off, consider these two types of getting bitcoin!

Decentralized Exchanges (DEX)

Decentralized exchanges store the bitcoins on the devices and not on a central server. They are therefore 

  • Less susceptible to hacker attacks, but 
  • More difficult to use for newcomers.

Centralized Exchanges

Most customers, however, invest in central exchanges. 

Here, with an online account, you have access to your bitcoins from anywhere, which in turn are managed by the exchanges.

There are also black sheep on the stock exchanges. Here it makes sense to stick with the big names. These are 

  • Kraken
  • Coinbase
  • eToro
  • Binance, and 
  • The Stuttgart Stock Exchange with the Bison app. 

Before investing, you should check a few checkpoints to know which wallet is the right one for you:

  • Where is the stock exchange based?
  • Is the stock exchange regulated by a government agency?
  • Does the stock exchange have enough volume and liquidity?
  • Does the company have a common imprint?

The Importance of the Stock Exchange Location

Only a few of the major stock exchanges have their headquarters in Germany. Of the above examples, this is only the Stuttgart Stock Exchange. 

Kraken and Coinbase are American companies.

How Do You Invest in Bitcoin?

Bitcoin is a cryptocurrency. The currency is independent of conventional, legal currency systems such as the dollar or the euro and regulates the right to property through the possession of computer-generated keys. 

Payments are cryptographically legitimized and processed via a network of computers with equal rights—completely without a bank. 

A decentralized, synchronized bookkeeping system, the so-called “blockchain”, is used for administration. The price of a bitcoin to legal tender follows the principle of price formation on the stock exchange.

Bitcoin is the oldest cryptocurrency and has been used since 2009. New bitcoin units are created by solving cryptographic tasks (so-called ‘mining’) and require large amounts of energy and computing capacity. The capacity of bitcoins is considered to be limited by the algorithm used in computer mining.

Now, we’re sure the question of how do I invest in bitcoin is almost answered. Read on to find out some more interesting—and important—details!  

How Do I Buy Bitcoins?

Anyone who has decided to invest in Bitcoins after weighing the possible risks only has to choose an exchange. Then the way to your own bitcoins is not far. With these three steps you can easily get your bitcoins.

  1. Account opening: 

First of all, an account must be opened with the exchange of your choice. With all of them, except for Binance, the new customer has to identify himself via video. A passport, driver’s license or identity card is sufficient for this.

How old do you have to be to invest in bitcoin? At least, 18 y.o. 

  1. Transfer: 

Then you need to transfer the money you want to invest to the account of the exchange provider. 

Some exchanges also offer 

  • Direct debit mandates
  • PayPal and/or 
  • Credit cards.

But these options are sometimes associated with high fees. How long the transfer takes depends on the platform. For example, the Stuttgart Stock Exchange states that the money will be in the account after one working day.

  1. Selection: 

Then it is almost there: now the user only has to specify the amount of euros he would like to buy Bitcoin—or another crypto currency. The current price is displayed by the stock exchanges.

How Much Do I Need to Invest in Bitcoin

Investors do not have to buy a whole bitcoin. Instead, it is calculated down exactly how many parts of a bitcoin a user receives for the desired amount. Coinbase, Kraken, Binance and eToro offer mobile trading with their apps.

You’d Bear This in Mind When Registering

Most providers use two-factor authentication for registration. Similar to a banking app, users have to verify themselves with their mobile phone number when logging in, for example.

After entering the password, the provider sends an SMS to the saved number with a code. Your own investment is safe even if the password is hacked.

How Do I Sell Bitcoins?

The same way you bought the coins. At the exchanges, you have to enter the sell order and the bitcoins will be transferred back to the user account in euros. You can then have the profit paid out to your account.

Easiest Way to Invest in Bitcoin

Savings plan offers for exchange traded funds (ETFs) on Bitcoin are your solution, especially if you don’t possess plenty of cash at the moment. Save regularly with a Bitcoin ETF or Bitcoin ETN (Exchange-Traded Notes)at top conditions! Besides, that’s the safest way to invest in bitcoin!

You can get savings plans on Bitcoin from online brokers. These offer you top conditions for regular savings. But not every Bitcoin ETF or Bitcoin ETN is available as a savings plan from every online broker. 

We will show you where you can save which ETF and which ETF you can get for special conditions. Numerous online brokers offer a selection of ETFs as a special offer for €0.00 order fees. 

These promotions are designed for the long term and usually run for at least a year or more. 

Another plus point: With all of the online brokers listed, you do not pay a deposit fee. Thus, the ETF savings plan is one of the most cost-effective options for old-age provision today.

What Does Trading Bitcoins cost?

Trading is not free, however: As with any other exchange, fees also apply to crypto exchanges, which can vary greatly depending on the provider. For instance,

  • Bison charges between 0.2% and 0.35% for an order
  • Coinbase charges 1.49%.

It is therefore worthwhile for investors to carefully compare the fee models of the various exchanges.

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