Bitcoin is roaring like never before. Although the original cryptocurrency fell slightly over the weekend, it came within a few hundred dollars of $100,000 on Friday, hitting another all-time high—one that was set a decade ago, or even as early as 2023. would have been unimaginable when Bitcoin was being traded nearby. $20,000
Bulls expect the momentum to continue with many predicting that Bitcoin will cross six figures before the end of the year.
When Bitcoin was created, there was only one way to get it: mine it yourself. Today, there are many ways to buy it, allowing investors to choose how much control they want to have over their investments.
If you’re trying to get in on the hype but don’t know how, here’s a guide to the three most practical ways to buy Bitcoin.
Crypto exchanges
One of the easiest ways to buy Bitcoin is through an exchange, with the biggest and best way feeling like using a typical online bank or brokerage.
Exchanges make money through transaction fees that vary across platforms. Users can buy bitcoins with fiat currencies or other digital assets, and the exchange will take a percentage of each transfer as a commission, and store your crypto securely.
It is important to note that not all crypto exchanges are trustworthy. Some exchanges, like the infamous FTX, have collapsed due to dubious business transactions and mismanagement of funds.
Popular crypto exchanges in the US include Coinbase, Robinhood and Kraken. Customers can download the app to their phone, create an account, and start trading — after meeting your customer requirements like providing a valid ID.
Exchange Traded Funds
Another way to invest in Bitcoin is through an Exchange Traded Fund. ETFs are a financial instrument that allows investors to gain exposure to an underlying asset without actually holding that asset. Popular brokerages like Schwab and Fidelity are among those that let users buy shares in various Bitcoin ETFs.
Spot Bitcoin ETFs were approved by the Securities and Exchange Commission in January, offering traditional financial institutions the first opportunity to invest in bitcoin. These firms hold a store of bitcoin and offer shares of it to investors, closely tracking its price fluctuations.
These funds are useful for investors who don’t want to deal with the complexities of owning Bitcoin directly. If you already have an investment portfolio, ETFs offer an easy way to gain asset exposure. The largest Bitcoin ETFs include BlackRock’s IBIT, Fidelity’s FBTC and Ark Invest’s ARKB.
Self Custody Wallets
If you want complete control over your digital assets, a self-custody wallet may be the way to go. These wallets create and store your private and public keys, interact with the blockchain, and allow you to monitor your balance and transfer your assets freely.
The downside of a self-custody wallet is that you are responsible for protecting your sensitive information. Your private key is like a password, allowing anyone to access the funds in your wallet. However, unlike a password, if you lose your private key there’s no way to recover it and your digital assets can be lost forever, so it’s important to find a safe place to store it. .
Most self-custody wallets can be downloaded to your phone. Popular ones include Coinbase Wallet, Metamask and Crypto.com’s DeFi Wallet.
