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How to Invest in Bitcoin: A Beginner’s Guide

by Pat

Content Manager

Bitcoin introduced us into blockchain technology and a whole new way of thinking about money in 2009. It’s the first cryptocurrency in the market; and it’s still the most popular and the largest crypto by market capitalisation today.

Bitcoin is not a quick rich scheme, but many people are drawn for its potential as a speculative asset, considering how it went from $0.04865 (all-time low price) in July 2010 to a whopping $68,789.63 (all-time high price to date) in November 2021.

On that note, if you’re new to crypto and want to learn how to invest in Bitcoin using a beginner-friendly online Bitcoin wallet, this guide is for you.

Disclaimer: This article was written for educational purposes only, and should not be considered financial, investment, legal, or tax advice. The value of Bitcoin is highly volatile, and thus, investing in it carries significant risks, including the potential loss of your capital. Please do your own research and consider your financial situation, investment objectives, and risk tolerance before making investment decisions.

What You Need to Know About Bitcoin

Bitcoin is a decentralised digital currency powered by blockchain technology. It’s not controlled by middlemen, such as banks, the government, or other financial institutions. It’s developed by an anonymous person or group called Satoshi Nakamoto during the 2008 Great Recession, a period marked by widespread skepticism towards banks and their financial practices.

Bitcoin’s Unique Approach to Transactions

Bitcoin introduced a novel approach to financial transactions, distinct from the traditional system where third parties could influence transactions and fees. It leveraged cryptographic techniques to ensure the integrity of transactions within a blockchain network. Its network went live on January 3, 2009, with the mining of its inaugural block.

Initially, only miners—what they call people who secure and verify transactions on the Bitcoin blockchain—could acquire Bitcoin. This early phase was largely experimental, as Bitcoin didn’t have real monetary value back then.

The First Ever Bitcoin Payment

The first known Bitcoin payment happened a year after its launch. In May 2010, a man successfully got two Papa John’s pizzas delivered to him for 10,000 BTC, which was worth about $25. Discussions and trading of Bitcoin for various goods and services flourished on Internet forums following this transaction.

Some of Bitcoin’s Use Cases Today

Fast forward to today, tens of thousands of businesses, both online and offline, already accept Bitcoin as a payment method. Plus, people across the globe send Bitcoin to family and friends for remittances, or use Bitcoin to split bills, accept salaries, shop online, and more.

Bitcoin also remains an attractive speculative investment. In fact, it was named one of the top performing assets in 2023.

How to Invest in Bitcoin: Your Step-by-Step Guides

Given its continued popularity, you can choose from different ways to get started with Bitcoin: crypto exchanges, payment platforms, Bitcoin automated teller machines (ATMs), brokers, and many more. What usually sets one apart from another is how quick, easy, safe, and affordable you can buy Bitcoin.

If you’re looking for the best way to buy crypto for beginners, check out these step-by-step guides using Ka.app, an easy-to-use crypto wallet.

a.   Buy Crypto with IBAN

The most popular way to buy Bitcoin with euro on Ka.app is using IBAN. Here’s how it works:

  1. Create a Ka.app account.
  2. Log in on the platform.
  3. Activate the cash feature. This will enable euro on the app and generate your own crypto IBAN.
  4. Upon activation, copy your IBAN on Ka.app, then go to your external IBAN (bank account). Transfer euro to your IBAN on Ka.app.
  5. Once you’ve received euro in the app, go to the home screen and click ‘Convert.’
  6. Choose to convert euro to Bitcoin and enter the amount of Bitcoin you’d like to buy.
  7. Confirm the transaction with your passcode.

b.  Buy Crypto with Credit/Debit Card or Wire Transfer

Choose from other payment methods through the Ramp integration, such as buying with your credit/debit card, Apple Pay, Google Pay, or bank transfers. Here’s your guide:

  1. Sign up on Ka.app.
  2. Log in on the platform.
  3. Click the ‘Buy’ icon.
  4. Select ‘Bitcoin’ from the list of cryptocurrencies.
  5. The Ramp page will load.
  6. Select euro to Bitcoin, and enter the amount of Bitcoin you’d like to purchase.
  7. Select your payment method: buy crypto with credit/debit card, Google Pay, Apple Pay, bank transfer, etc.
  8. Enter the required details and proceed.
  9. Enter the confirmation code sent to you email.

7 Things to Consider When Starting to Invest in Bitcoin

Investing in Bitcoin requires lots of research and careful consideration. Be sure to keep the following things in mind before (and while) making investment decisions to start your Bitcoin journey with ease:

1.   Your Risk Tolerance

Rapid and significant price movements in the crypto market may lead to substantial gains or losses in your investment for a short time period. Therefore, understanding your risk tolerance—the capacity to endure market volatility and potential losses without losing sleep—is crucial.

It’s about finding that sweet spot where the thrill of potential earnings aligns with your inner peace, allowing you to make wise and strategic investment decisions.

If you're based in Bulgaria or Italy, your risk tolerance shall also take into consideration the warning of EU financial regulators (ESAs).

2.   The Platform You Will Use

Choosing the right platform for buying, managing, and storing Bitcoin goes beyond convenience and security. Your chosen platform also influences the fees you’ll pay for transactions, the accessibility of your coins, the range of features available to you, such as the ability to convert Bitcoin to other cryptocurrencies or cash like euros, and the overall success of your investment.

Additionally, a user-friendly interface like that of Ka.app’s can significantly enhance your investment experience, making it easier to monitor your funds, understand market trends, and make informed decisions.

3.   Your Investment Strategy

Having a clear investment strategy isn't just about deciding when to buy or sell Bitcoin; it's a comprehensive plan that considers your financial goals, risk tolerance, and the market's unpredictable nature. It helps you realise whether you're aiming for long-term growth by holding onto your Bitcoin (a.k.a. "HODLing") or seeking to capitalise on short-term price fluctuations through active trading.

Additionally, it helps ensure that you're not swayed by momentary panic or euphoria, which can lead to rash decisions. Instead, you're making calculated moves based on a well-thought-out plan that aligns with your investment goals. Thinking through a solid investment strategy can also help you consider portfolio diversification, and other ways to spread out potential risks.

4.   Keeping Your Coins Secure

Blockchain provides a high level of security through its distributed network and cryptographic protocols. However, the points of interaction with this network—such as exchanges, wallets, and personal security practices—introduce vulnerabilities that can be exploited if not properly safeguarded.

Also, unlike credit card charges which can often be disputed and reversed, a Bitcoin transaction, once confirmed on the blockchain, cannot be undone. This finality means that any security lapse leading to unauthorised transactions can result in irrevocable loss of funds. Therefore, investing in Bitcoin demands a proactive approach to security, including choosing a platform or wallet with strong security measures, using two-factor authentication (2FA), using strong passwords, and regularly updating your software, among others, to protect your coins against malware and hacking attempts. Educating yourself about the latest security threats and best practices is also crucial.

5.   Crypto-Related Taxes, if Any

Just like any other investment, profits generated from Bitcoin transactions can be subject to taxes, depending on the regulations in your country/location. For instance, capital gains tax may apply to the earnings you get from selling Bitcoin at a higher price compared to its purchase price.

Understanding the tax implications of your Bitcoin investments ensures adherence to tax laws, and help you optimise your investment strategy for after-tax returns, making informed decisions about when to buy or sell. Ignoring these tax obligations can lead to penalties, audits, and fines, and thus reaching out to a crypto tax professional is a must.

6.   The Latest Crypto News

Bitcoin’s value and performance are influenced by various factors—like technological advancements, regulatory changes, major crypto events, and shifts in investor sentiment—most of which are regularly covered in crypto-related news. Keeping a pulse on these things can empower you with knowledge and insights into broader market trends, which can help you navigate volatility while considering potential risks and opportunities.

7.   Community and Resources

The Bitcoin community is filled with crypto enthusiasts, investors, developers, and thought leaders. It’s where you can easily gather ideas, strategies, and invaluable perspectives on market trends, and the latest developments in the crypto space. Engaging with this community through forums, social media, and meetups can also make you feel supported in navigating the complexities and potential challenges of investing in Bitcoin.

Meanwhile, resources such as educational websites, online courses, and blogs can serve as tools for continuous learning and staying updated with Bitcoin’s technological and financial aspects.

The Bottom Line

Starting your Bitcoin investment journey is exciting, but it requires research, understanding of market volatility, knowing your investment goals, and the use of a secure, beginner-friendly crypto platform.

The good thing is, buying Bitcoin is easy with Ka.app. You have different on-ramp options, such as using IBAN, your credit/debit card, Google Pay, Apple Pay, or making a bank transfer. Get started by creating a Ka.app account today.

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FAQ

Is Bitcoin a safe investment?

Bitcoin, like most investments, carries its own set of risks. Its price can swing dramatically in a short time, with potential for both rapid gains and losses. Nevertheless, a lot of users view it as a promising investment opportunity. Conducting thorough research and evaluating your financial capacity and risk appetite is essential before making any investment decisions.

Can I make money with Bitcoin?

Earning profits from Bitcoin investment is possible, whether by holding onto your coins for a long period of time, selling at a higher price, through active trading on exchanges. However, profiting from Bitcoin hinges on grasping market trends and being prepared for its price volatility.

How much should I initially invest in Bitcoin?

The ideal starting investment amount in Bitcoin depends on your financial condition and how much risk you can handle. The general advice is to invest only what you're prepared to lose. It's wise to start small and incrementally increase your investment as you become more familiar and comfortable with market movements.

What are the fees associated with Bitcoin investing?

Investing in Bitcoin involves certain fees, including charges for buying or selling coins, and transferring Bitcoin in and out of your wallet. Fee structures vary across different platforms, making it crucial to read about them beforehand.

How can I secure my Bitcoin investment?

Securing your Bitcoin investment involves protecting your crypto wallet with strong passwords, enabling 2FA, keeping your software up-to-date, not using public WiFi, being aware of phishing scams and other security threats, etc. You can also use a hardware wallet if you want to store significant amounts of Bitcoin offline.

Where can I learn more about Bitcoin investing?

There are numerous resources available for learning about Bitcoin investing, including crypto news websites, online forums, educational courses, and books. Engaging with the Bitcoin community and seeking advice from experienced investors can also be incredibly helpful.

Why do some people choose Bitcoin over other cryptocurrencies?

Choosing Bitcoin over other cryptocurrencies usually boils down to its pioneer status (it’s the first crypto in the market), widespread recognition, and substantial market presence. Sure, exploring other digital currencies can be wise for portfolio diversification, but Bitcoin's longstanding reputation and liquidity make it an attractive choice for many investors.

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