The executive director of the online broker Exante and the founder of the first Bitcoin hedge fund Anatoly Knyazev told how to invest in cryptocurrency.
There are several ways to buy bitcoin, each has its own pros and cons. Bitcoin can be bought on a specialized exchange, bitcoin signals or directly from another cryptocurrency owner. In addition, if you only want to speculate on the growth of the Bitcoin exchange rate, then you can earn on Bitcoins without buying them at all.
- Open The Wallet
Many people want to get acquainted with bitcoins before buying. To do this, you can create a Bitcoin wallet for free, so that later you can transfer your first purchased electronic money to it. All wallets exist absolutely regardless of where they were created. Blockchain.info is the easiest way to create a bitcoin wallet. To do this, just fill out the form and receive confirmation by e-mail. Other wallets: Multibit, electrum. On some bitcoin exchanges, you can also get a bitcoin wallet. It will be exactly the same wallet as created on Blockchain.info
- Choose An Exchange
My personal rating is opened by Bitstamp – currently one of the largest, oldest, and, importantly, stable BTC-exchanges with a license in Luxembourg. All problems on it were always resolved in favor of customers. Another nice point is that the founders of the exchange are public, they actively communicate with the press and customers. These are Slovenes Damian Merlak and Nitz Codrich.
You can replenish a deposit on Bitstamp by bank transfer or directly from a bank card. True, recharge from the card is not yet available for customers, but the exchange is constantly expanding the list of partner countries. You can withdraw money both to a bank account and to your bitcoin wallet. Commissions on Bitstamp are designed in such a way that it is most profitable to make transactions from $ 1000. With such amounts, Bitstamp becomes one of the cheapest to use large bitcoin exchanges. If you want to buy a whole bitcoin, or even several, then Bitstamp is perfect for you. Other major bitcoin exchanges that work with clients: Kraken, Bitfinex.
- We Buy Bitcoin from A Neighbor
The Localbitcoins portal is suitable for those who want to buy bitcoins quickly, anonymously and without further obligations. This is not an exchange, but a message board for buying and selling bitcoins. Unlike exchanges like Bitstamp, where trading occurs anonymously. The advantage of this approach is that you do not need to open an official account on the exchange, confirm your documents and make a deposit, as well as pay a commission to the exchange. You pay directly to the seller for bitcoins, and the range of payment options is huge – you can transfer money through PayPal, transfer from card to card, bank transfer. You can even exchange bitcoins for an Amazon gift card or transfer money personally.
- Do Not Forget About the Risks
Buying bitcoin from a private person is accompanied by additional risks, so do not forget about them: the seller may deceive you or simply disappear at the last moment. In order to be safe, use payment methods with a guarantee of receipt of goods, for example, PayPal. In addition to Localbitcoins, there are other exchange services, but I would warn newcomers from such experiments. The risk of meeting with a fraudster or unscrupulous seller here is several times higher than on the stock exchange.
- Bitcoin Speculation
Many people who are interested in bitcoins, in fact, do not want to own them, they want to earn money on them. It is not necessary to buy bitcoins for this. Moreover, sometimes it can be dangerous. For example, the Russian authorities are quite negative about bitcoin. The Federal Tax Service of Russia officially stated that “… the use of cryptocurrencies in transactions is the basis for considering the classification of such transactions as transactions (operations) aimed at the legalization (laundering) of proceeds from crime and the financing of terrorism.”
Fortunately, this does not apply to derivative financial instruments. The world exchange system successfully quotes grain, oil, company stocks, debts, market indices and more. When bitcoins appeared, existing mechanisms quickly created the Exante Bitcoin Fund, which acts as an ETF for bitcoins. All information on the fund is available, including in the Bloomberg system. The unit value is tied to the current value of bitcoin on leading exchanges. It is updated several times per second, accurately repeating all fluctuations in the exchange rate. Since its inception, the fund has become very popular because unit owners do not buy bitcoins and therefore do not fall into the “gray zone” for regulatory authorities. Private and corporate investors work in a single coordinate system with their auditors and tax: