As Bitcoin approaches $95,000 following an unprecedented year, potential investors might feel apprehensive about entering the cryptocurrency market. However, supporters claim that the digital currency remains relatively new and less explored than traditional investment avenues.
“It’s still early. Now is the perfect time to get involved,” said Charles St. Louis, CEO of DELV, a company focused on building crypto infrastructure. “There’s still much to be done, and a lot to develop before it truly goes mainstream.”
First Steps to Cryptocurrency Investment
For beginners, investing in cryptocurrency can feel daunting. Here are some initial steps to consider when planning to invest in cryptocurrency in the U.S.
Choose Your Payment Method
Your first action when investing in Bitcoin or cryptocurrency is to select a payment method. Options include credit cards, mobile apps like PayPal or Apple Pay, bank transfers, or even cash at physical Bitcoin ATMs. Each method has its own advantages and disadvantages.
Simplifying the Purchase Process
Credit cards are a popular option due to their widespread acceptance on crypto platforms and speedy transactions. However, some platforms may impose fees for credit card use, which can add up quickly. Additionally, purchases made with credit cards may trigger scrutiny from banks, as these institutions often categorize crypto purchases as potential fraud.
Exploring Other Payment Options
Mobile payment systems such as Apple Pay or Google Pay provide enhanced security features, but they are often linked to credit or debit cards, which exposes users to the same high fees and regulatory challenges. An alternative is open banking, which transfers funds directly from your bank account to your chosen crypto platform, usually with lower fees but potentially slower processing times.
Selecting a Cryptocurrency Platform
After deciding on your payment method, it’s crucial to find a crypto platform that suits your needs. “Most people tend to download popular apps like Coinbase or CashApp to convert their cash into crypto,” explained Chris Kline, co-founder, and COO of BitcoinIRA. For enhanced privacy, consider using a standalone wallet, which allows for greater user control.
Deciding on Storage Options
Once you’ve completed your initial investment, the next step is to determine how you will store your cryptocurrency. Options include keeping it in the platform’s internal wallet, utilizing a hot wallet connected to the internet for quick access, or opting for a cold wallet for additional security. It’s essential to safeguard your private key or seed phrase, as losing it means losing access to your assets.
Experts recommend that newcomers start slowly, investing small amounts in well-established cryptocurrencies like Bitcoin or Ethereum. They also advise understanding the regulatory landscape, as profits from crypto investments are taxable in the U.S. Always keep track of your transactions and consult a tax advisor to stay compliant.
