Ways to invest in Bitcoin
The first thing you need to know when investing in Bitcoin is that you’ll need to sign up with either an exchange or an online broker. These platforms allow you to buy, sell, and trade Bitcoin, with pros and cons to each approach.
There are a variety of different ways you can invest in Bitcoin, including buying and holding coins for the long term, engaging in short-term trading, or using financial instruments such as ETFs. The links below will take you to individual pages which guide you through each way of investing in Bitcoin.
What is Bitcoin?
Bitcoin is the most widely-used cryptocurrency in the world, and also the first ever created. Launched in 2008, Bitcoin is an alternative form of currency that does not require the backing of banks or financial institutions, instead using blockchain technology to verify transactions between users.
If you’re just starting to learn about cryptocurrency, then check out our Bitcoin 101 course which will take you through everything you need to know in easy-to-understand, simple steps.
To learn more about Bitcoin investing, keep reading.
How to invest in Bitcoin
There are now many different ways you can invest in Bitcoin, and we recommend understanding all the options available if you’re interested in getting involved. Here is a quick summary of how to invest in Bitcoin using a variety of methods, and if you’re interested in learning more then simply follow the link to our guides on each subject.
- Bitcoin brokers. If you want to buy Bitcoin quickly and directly, then the best option is to use a broker. These platforms will buy and sell Bitcoin instantly at the current rates advertised on their websites. This convenience comes at a cost, however, with brokers usually being the most expensive way to buy Bitcoin.
- Bitcoin exchanges. Exchanges are peer-to-peer trading platforms that allow you to buy Bitcoin from, and sell Bitcoin to other users in real time. These platforms are harder to master than brokers, but they enable you to buy Bitcoin at cheaper prices and also allow you to trade your Bitcoin for a wide variety of other cryptocurrencies.
- Bitcoin ETFs. There are now a number of ETFs (Exchange Traded Funds) which follow the price of Bitcoin. Through investing in one of these ETFs, you can trade in relation to the value of Bitcoin without having to own the coins.
- Bitcoin funds. Some large funds are now getting involved in Bitcoin. By investing in one of these funds, you can benefit from their cryptocurrency investments. Unlike an ETF, Bitcoin funds have managers who decide where money is invested, so you’ll want to research how reliable the people running the fund are before investing.
- Bitcoin mutual funds. A mutual fund is a way of investing whereby investors pool money together to be invested by a fund manager in a way that generates steady profits for all. An increasing number of mutual funds can now be found whereby investors are looking to put money into Bitcoin.
- Bitcoin trusts. Bitcoin trusts allow you to trade Bitcoin on the stock market by owning publicly traded shares in a trust. This is not usually possible with cryptocurrency and is an attractive offer for some investors, although it is worth noting this approach comes with high fees and a relatively large amount of risk.
- Bitcoin debit cards. You can now get debit cards which will allow you to spend Bitcoin in regular shops. These cards hold your coins, and instantly exchange them for fiat currency whenever you make a purchase. This means you can incorporate Bitcoin into your regular life, but it does come with high fees.
- Bitcoin apps. If you want to invest in Bitcoin on the go, there are a variety of apps that can help you do so. Many online brokers will have a mobile app you can link to your account, as do some exchanges and other platforms that help you execute Bitcoin trades.
- Bitcoin wallets. If you’re looking to buy and hold coins for the long term, it can be a good idea to invest in a secure Bitcoin wallet. This isn’t necessary for all ways of investing in Bitcoin, but is worth looking into if you’re security conscious.
If you’re ready to sign up to a broker and invest now, or you want to find the latest Bitcoin news and analysis, simply keep scrolling down the page. Our team has reviewed all the best crypto trading platforms, and also publishes regular news updates and price analysis articles so you never miss a beat.