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Since its launch in 2009, Bitcoin has experienced meteoric growth: From October 2013 to early June 2021, for instance, its value increased by almost 30,000%.
After hitting an almost $20,000 high in 2017, for example, its value plummeted and rose to no more than about half of that until 2020.
There are hundreds of exchanges out there, but as a beginner, you’ll want to opt for one that balances ease of use with low fees and high security.
You may also choose to buy your crypto on a platform like Robinhood, Paypal or Venmo, though buying crypto this way often means you cannot withdraw your coins and move them to another platform.
After choosing an exchange, you have to fund your account before you can begin investing in Bitcoin.
For example, Coinbase doesn’t charge a fee if you do an electronic transfer from a bank account.
Things get even pricier if you use PayPal or a debit card to make a direct purchase of cryptocurrency, instead of funding your account and then using transferred money to make your purchase: Coinbase’s fee rises to 3.99% of the transaction amount.
In addition, if you use a credit card to buy cryptocurrency, it generally will count as a cash advance and be subject to a higher interest rate than you pay on regular charges.
Depending on the platform you’re using, you may be able to purchase it by tapping a button, or you may have to enter Bitcoin’s ticker symbol .
If Bitcoin’s current price was $38,000, for example, you’d need to invest that much to buy a Bitcoin.
The crypto exchange you use probably has an integrated Bitcoin wallet or at least a preferred partner where you can safely hold your Bitcoin.
In addition, if you use a third-party crypto wallet custodian, you may also be permanently unable to access your coins if you lose the private key that serves as your wallet password.
When you decide you’re ready to sell your Bitcoin, you can place a sell order through your exchange, much like you did when you originally purchased your BTC.
Your exchange, however, may have a holding period before you can make a transfer back to your bank account.
When you sell your Bitcoin, you may make a profit.
Especially when Bitcoin’s price is skyrocketing, investing in the popular cryptocurrency can be tempting.
Before joining Forbes Advisor, John was a senior writer at Acorns and editor at market research group Corporate Insight.