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How Much Should I Invest in Bitcoin?

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There are currently over 19 million Bitcoins in existence.

Crypto has become a trend in investing within the last couple of years. Its high value and decentralization make it a valuable asset.

You might be wondering “how much should I invest in Bitcoin?” If so, you’ve come to the right place. Keep reading, and we’ll give you a quick guide to investing in Bitcoin!

Contents

What Is Bitcoin?

Whenever you’re investing in something, it’s important to know the details. We’ll give you a quick rundown on what Bitcoin is.

Bitcoin is the best-known cryptocurrency that started in 2009. A key thing to remember here is that Bitcoin all happens on a decentralized ledger. This ledger system is referred to as a blockchain.

In order to be truly decentralized, Bitcoin makes use of peer-to-peer (P2P) technology. This means that there is no third party in between users. This might sound scary, but this is the same tech LimeWire used.

Is It Safe to Invest in Bitcoin?

When you’re first looking at how to invest in Bitcoin, remember this is a volatile investment. In a lot of ways, it’s like buying any currency; there will be fluctuations in price.

What differs is that Bitcoin was designed to be decentralized. This means you don’t have the defense a bank provides in case of an emergency. That’s why it’s critical to do your research on which exchange you use.

The safest way to invest in is by choosing an exchange you trust. You can store Bitcoin yourself, but make sure you’re doing it properly.

How to Invest in Bitcoin

The first thing you’ll want to do when investing in bitcoin is picking an exchange you want to work with. Your exchange is how you purchase Bitcoin.

When picking an exchange, be sure to research all your options. It’s best to go with one that has fraud protection.

Next, you’ll need a wallet. The two kinds of wallets are hot and cold. Hot is where you’re Bitcoin can be accessed over the internet. Cold is an actual piece of hardware you use to store your coins.

Cold wallets are known for being more secure. Though, hot wallets are easier. The choice is yours!

Another way to invest in Bitcoin is to use a Bitcoin ATM. These are kiosks that connect to a network to allow you to buy your crypto with cash. You can also host one of these ATMs.

Byte Federal as an example allows you to host these ATMs. Their page details how business owners can make some passive income with a Bitcoin ATM.

How Much Should I Invest in Bitcoin?

When asking “How much should I invest in bitcoin?” it’s important to think about your risk tolerance. A way to think about it is if you’d be comfortable losing the full amount you put into it. That’s a worst-case scenario, but the exercise will assess your risk tolerance.

Experts say that you should contribute no more than five percent of your portfolio to Bitcoin. Given its volatility, it’s best to air on the safe side.

Satisfy Your Crypto-Curiosity

Now that you’ve answered the “how much should I invest in bitcoin?” question, it’s time to make the leap. Remember to go low and slow and keep your risk tolerance in mind as you invest and you’ll be all set!

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