In the mid of 2016, you could buy a bitcoin for about £400 and this price has gone up to £18000.
Analysts often believe that the price of Bitcoin will rise as blockchain technology and cryptocurrency is becoming more popular. That’s not guaranteed though.
In the UK, the bitcoin market is unregulated, so you cannot claim compensation if anything goes wrong.
You may end up losing all your money if you invest a large amount of your net worth. However, learning about the right process how to buy bitcoin can save you from facing financial disasters.
How To Buy Cryptocurrency
Buying cryptocurrency would require you to do a lot of research. You will also need to decide the type of crypto you want to invest in.
When you purchase crypto from a crypto exchange, you need to provide some kind of personal information for identity verification purposes.
Some exchanges also require you to pass biometric checks to demonstrate you are the authorized person as mentioned on the documents.
In the UK, crypto exchanges must comply with AML (Anti Money Laundering) and KYC (Know Your Customer) regulations.
Bitcoin is a highly volatile market where the future is unpredictable. You can earn large profits and then you may also have to face huge losses.
That’s why it is recommended that only a small percentage of investment be made such that even if you lose, you would be able to bear it.
Here, we will discuss the whole process to buy a bitcoin.
Choose A Crypto Exchange
To buy bitcoin or any other crypto, you need to select a crypto exchange where the buyers and sellers collaborate to exchange their pounds for buying the crypto coin.
Among the hundreds of crypto exchanges, you should pick one that gives you the ease of use with top-notch security and low fees.
Make sure to check if your crypto exchange has a digital wallet, else you would need to find one.
If you buy crypto from renowned platforms like PayPal, it is not possible to withdraw currency or move it to another platform.
Holding crypto in a different wallet means selling and then re-buying them using a different exchange.
Decide The Payment Option
Once you choose a crypto exchange, you will require to fund your account in order to start investing in Ethereum or any other currency.
If your exchange allows, you can use bank transfers to fund your account for crypto transactions. These transfers can be from savings or a current account or a crypto wallet.
Having a wallet is important to make payments using cryptocurrency. Wallets can be installed on mobile devices or computers. They act as an interface to gain access to crypto.
In general, wallets never store crypto, they hold the details of the keys you need to access bitcoin or any other currencies.
Place An Order
Once your online account is funded, you are all set to place your very first purchase order.
The process to place an order and buy crypto depends upon the platform you use are using for crypto purchases and transactions.
Some platforms allow buying crypto with just a tap of a button while others require you to enter Bitcoin’s ticker symbol (BTC).
Here, you need to provide the amount of money you wish to invest. After the transaction completes, you own a portion of the crypto you purchase.
Since bitcoin is expensive, most buyers are only able to buy a certain percentage. For example, if bitcoin costs £30000 and you are putting in £1000, you will own 3.33% of the bitcoin.
Pick A Safe Storage Option
Most crypto exchanges come with an integrated Bitcoin wallet that allows the buyers to safely hold bitcoin.
However, buyers avoid leaving their bitcoin linked to the internet to avoid hacking attempts. Top-tier crypto exchanges insured their crypto to reimburse clients if anything unexpected happens.
For higher security, it is recommended to store Bitcoin in an offline wallet. If you move crypto from one platform to another, you will have to pay a small amount of withdrawal fee.
However, these transactions are considered safe and secure. Using a third-party crypto wallet can be risky as you may permanently lose access to the coin if you forgot your private keys.
Should You Buy Bitcoin?
Buying a bitcoin might be tempting, particularly when the prices are skyrocketing.
A thorough market analysis is important to make the right purchase decision and become a diligent crypto investor.
Don’t forget to compare the crypto withdrawal fee each of the selected platforms charges, in case you need to move a coin from the exchange to the wallet.