How to Successful Invest in Bitcoin for Beginners? For those of you who are bored with the same investment instruments, why not try investing in cryptocurrencies like bitcoin, which is currently trending?
Yep, over time the existence of Bitcoin is getting more and more popular. With the increasing popularity of Bitcoin, the profits that can be achieved are even higher because more and more investors are starting to look at this digital investment.
Why Bitcoin Investment is the Most Popular Investment Today
Bitcoin’s popularity is not arbitrary. Although there were many rumors that were not wearing it because of the lack of socialization and insight of many people at that time, Bitcoin investment is actually quite safe and can be very profitable.
Here are other interesting reasons that make Bitcoin investment a popular investment instrument for Millennials today:
- The price of Bitcoin can increase quite drastically. In just a matter of months, the value can penetrate the new all-time high. The price of bitcoin has increased by 354% in 2020 which makes it able to beat the returns of other financial assets.
- Now it can be used as a means of payment in several digital transactions, although not many.
- PayPal, which is also the largest online transaction payment tool in the world, already accepts payments with Bitcoin.
- PayPal users can store and make transactions with Bitcoin on PayPal.
- Can be used as a means of payment for buying and selling online for several international/overseas e-commerce such as e-Bay and Amazon.
- Legal and safe. Because there is legal certainty.
Also Read: 7 Ways to Earn Free Bitcoin Fast
How to Invest in Bitcoin: A Beginner’s Guide
For those who want to try to learn to buy and sell bitcoin investment and feel the benefits, here are the steps:
Registering and opening an account on an exchange is the main requirement if you want to start buying your first bitcoins to invest in.
Bitcoin Exchange, or Bitcoin exchange, is a term for a company that provides a special place (platform) that can be used by people from various countries to exchange Bitcoin for fiat currencies (such as US Dollars, Euros, Yuan, etc.).
Registration is done online, either through the mobile application or via the website. The application can be downloaded on Google PlayStore and Apple Store.
Get KYC Verification
After opening an account, next, you have to get KYC verification to be able to proceed to the next step. If you don’t get this verification, you can’t make transactions even though you have opened an account.
KYC verification is an important process to protect all participants on the exchange and ensure AML (Anti Money Laundering) policies are properly implemented.
The KYC verification process consists of uploading ID photos, filling in personal data, taking selfie photos with normal motion and random motion. KYC data will be processed which takes at least 1 business day.
Make a Deposit in Advance
To be able to buy bitcoins for other crypto assets, you must make a rupiah deposit to a specified account.
Here are some of the deposit methods offered by the exchange:
- Bank transfer (account & virtual account)
- Deposit cash to the office
- Credit Card, Debit Card
You can also deposit in the form of coins, it can be Bitcoin, Ethereum, and other types of coins. On each exchange, there is a list of coins that are accepted as deposits. The exchange will issue a wallet ‘address’. This address is used to send coins from other exchanges.
Choosing a Crypto Asset Pair
Before starting to make transactions, you must choose the pair or pairs you want to trade. This pair is the same as when buying forex, what is the price of another currency for the price of 1 US $.
The types of crypto-asset pairs that can be traded are different on each exchange. In one exchange company alone, there can be more than 100 pairs of crypto assets.
To be able to finally make a sale and purchase, the user must place an order on the exchange application or website. There are several types of orders that must be known because the type of order is related to the fee that must be paid:
This type of order is for the user to place at a certain price and not at the current market price. So the transaction does not occur immediately at that time.
On the seller’s side, limit orders are usually placed at a price higher than the market price. But if it’s on the buyer’s side, the price that is installed will be lower than the market price.
Pending orders will be included in the Buy/Sell order queue (Order Book). That way, the member has become a Market Maker. This type of order is called a ‘maker’ because it creates a new order. Unlike the order taker, which follows the current market price.
This order will only be executed when the market price moves to touch the price set by the limit order. As long as the price does not move at the posted price, the transaction will not occur.
There is no fee charged from the exchange with this type of order maker, aka the buying and selling fee is zero (0).
Market (Taker / Instant)
This type of order can be executed immediately because it follows the existing market price position. So if you place an order to buy, buy at the current market price, if you order to sell, sell at the current market price.
This order is often referred to as a taker or instant order. Called Instant because orders occur immediately, while called takers because they take prices that are already in the market and do not create new prices.
This type of order is charged by the exchange. The order fee is usually a certain percentage of the transaction value, ranging from 0.1% to 0.3%.
The order book is data provided by the exchange in the application, which shows the order of orders currently on the exchange by price and amount. When an order has occurred, the next order will be out of the order book.
The advantage of the order book is that it shows how the price moves in the market and the depth of the number of orders.
Also Read: How To Mine Bitcoin On Android Phone
Start Making Buy-Sell Transactions
After choosing the pair you want to trade. You just create an order by entering the price and amount of Bitcoin you want to buy, then the required amount of rupiah will appear. Choose the type of order, taker, or maker.
If you choose a taker, the order will be executed immediately according to the existing market price. The number of Bitcoin holdings will be immediately updated and the amount of Rupiah deposit will decrease according to the number of purchases made.
If you choose a maker, the order does not occur immediately and you have to wait until it matches the desired price. As long as there is no match, the order will wait in the order book.
The unit for buying and selling Bitcoin can be up to eight digits after the comma, which is 0.00000001 BTC. So, you can trade with a fairly small number like 0.3870426 BTC.
The process of selling Bitcoin itself is the same as buying it. Only now, after successful execution, Rupiah deposits increase and Bitcoin holdings decrease.
To withdraw your bitcoins into rupiah, the method is quite easy, namely by submitting a withdrawal in the application used.
You can also withdraw bitcoins held on the exchange. Just enter the wallet address to which the bitcoin is sent.
It takes a few minutes to 1 x 24 hours for the rupiah withdrawal process. Because exchanges use banking networks to send money. So, how long or fast is determined by the process at the bank as well.
In addition to being withdrawn, bitcoins can also be transferred to other bitcoin investors who share the same exchange with you. The trick is to fill in the wallet address that is intended to be sent to an exchange or write a user ID to send it to an exchange. The wallet address becomes a kind of account number when transferring money.
The wallet is a place to store crypto assets. Same with us keeping money in the wallet. You will get a wallet address. This address is used to send or receive crypto assets. You can also store crypto assets on an exchange where the wallet will also be managed by the exchange, having its own wallet.
Trading Features to Facilitate Buy-Sell Transactions
For those who want to focus on trading, the exchange has several features that can be used to help trading activities and make it easier, namely:
- Chart analysis to analyze prices technically, such as transaction history (orders and trades).
- Order Book which shows the current order position. This information is important for analyzing possible price movements.
- Stop Loss. An important cut-loss feature to manage the risk of sharp price fluctuations
- Short Selling. Can do short-sell when the market is down.
- OCO, or “One Cancels the Other” for placing two orders at the same time, limit, and stop-limit orders, which is useful for taking profits and minimizing potential losses.
Guaranteed Asset Security
There have been many exchanges that have implemented a 2FA (Two Factor Authentication) security system which is an online security feature, where users must verify their identity 2 times.
Where when a user logs in to an account at Exchange, after entering a user ID and password, the user will be asked to enter a special code sent via message or using Google Authenticator on a cell phone.
Also Read: How to Get Bitcoin for Free and Fast
Little by little it becomes a hill
There is no such thing as starting an investment immediately profiting, there are many processes and things that must be learned again in order to achieve the desired investment success target. Whatever the investment instrument, there will always be small or large risks. Likewise with bitcoin investment. So before you start, make sure you fully understand what bitcoin is, its characteristics, risks, and benefits.