A Beginner's Guide To Investing In Bitcoin From Florida

Bitcoin is a decentralised digital currency that operates without the oversight of banks and governments. It is also the world's first-ever cryptocurrency. In this article, we will explore how to invest in Bitcoin from Florida, including the risks and potential rewards.

How to buy Bitcoin in Florida

Overview

Bitcoin is a decentralised digital currency that operates without oversight from banks or governments. It is bought and sold on cryptocurrency exchanges, which are platforms that allow users to exchange dollars for coins.

In Florida, there are several exchanges offering Bitcoin, and you can select one based on your requirements and preferences. Different exchanges have different transaction fees, withdrawal limits, payment modes, and verification processes that need to be kept in mind before selecting one.

Step-by-step guide to buying Bitcoin in Florida

• Choose a crypto-trading service or venue: Select a cryptocurrency exchange that offers Bitcoin, such as Gemini, Kraken, Coinbase, or Crypto.com. These exchanges carry a variety of fees and consumer protections, so it is important to research them thoroughly before choosing one.
• Connect your exchange to a payment option: Depending on the exchange, you may need to provide personal identification information, including a picture of your driver's license or Social Security card. You can connect your bank account directly or link a debit or credit card.
• Place an order: Cryptocurrency exchanges offer various order types and ways to invest. Almost all crypto exchanges offer market and limit orders, and some also provide stop-loss orders.
• Ensure safe storage: It is important to store your Bitcoin securely in a digital wallet. There are two types of wallets: hot wallets and cold wallets. Hot wallets are online wallets that are connected to the internet and are suitable for small amounts of cryptocurrency or actively traded coins. Cold wallets, on the other hand, are offline wallets that are not connected to the internet and are considered more secure for storing large amounts of Bitcoin or long-term holdings.
• Alternative ways to buy Bitcoin in Florida: In addition to cryptocurrency exchanges, there are other ways to buy Bitcoin in Florida. These include:

• Bitcoin ATMs: These act like in-person bitcoin exchanges and are often placed in locations such as convenience stores.
• Peer-to-peer exchanges: LocalBitcoins is an example of a peer-to-peer (P2P) exchange, where you can buy and sell Bitcoin directly with another individual.
• Traditional brokers: A few traditional brokers, such as Robinhood, Webull, TradeStation, and Fidelity, offer access to Bitcoin or other cryptocurrencies.

Things to keep in mind

• Volatility and risk: Bitcoin is one of the most volatile investments, experiencing incredible spikes and plummets in value. It is important to be aware of the risks involved and only invest an amount you are comfortable losing.
• Security and privacy: Privacy and security are crucial when dealing with Bitcoin and other cryptocurrencies. It is essential to keep private keys secure and be aware that the balance of a public address is visible.
• Regulations and taxes: Before buying Bitcoin, ensure you understand the legal, regulatory, and tax status of purchasing it in Florida.
• Investor protections: Unlike traditional stock brokerage accounts, Bitcoin and other cryptocurrency investments are not insured by the Securities Investor Protection Corporation (SIPC) for exchange failures or theft. While some exchanges provide private insurance, it does not protect against individual online breaches.

Buying Bitcoin in Florida can be done through various exchanges, brokers, and alternative options. It is important to do your research, understand the risks, and make sure you comply with any relevant regulations. Remember that Bitcoin is a volatile asset, and it is recommended to only invest a small portion of your portfolio in cryptocurrencies.

Bitcoin wallets

When it comes to Bitcoin wallets, there are two main types: hot wallets and cold wallets. Hot wallets are connected to the internet, often come with add-on services, and make it easy to carry out transactions. However, they may be more vulnerable to hackers. Examples of hot wallets include the Crypto.com Defi Wallet, Zengo Wallet, and Coinbase Wallet. On the other hand, cold wallets are disconnected from the internet and are considered more secure. However, they tend to be more expensive and less user-friendly. Examples of cold wallets include hardware wallets such as Ledger and Trezor.

When choosing a Bitcoin wallet, it is important to consider factors such as security, ease of use, and compatibility with different cryptocurrencies. Some wallets are designed for specific cryptocurrencies, such as MetaMask for Ethereum, while others support a wide range of digital assets. It is also worth noting that some exchanges, like eToro and Coinbase, offer free built-in wallets for their users.

Additionally, it is recommended to have a hardware wallet for added security, especially if you are storing large amounts of Bitcoin. Hardware wallets are physical devices that store your private keys offline, providing an extra layer of protection against hackers. They can also be used in conjunction with hot wallets for added convenience and security.

Overall, when selecting a Bitcoin wallet, it is crucial to prioritize security and ensure that your private keys are protected to safeguard your digital assets.

Bitcoin ATMs

To use a Bitcoin ATM, you will first need a Bitcoin wallet. This is a digital tool that allows users to store, send, and receive Bitcoins. You can create a Bitcoin wallet by installing an app, such as the Bitcoin.com Wallet app, on your mobile device or laptop/desktop.

Once you have a Bitcoin wallet, you can locate a Bitcoin ATM near you using a Bitcoin ATM map. There are tens of thousands of Bitcoin ATMs globally, with most of them located in the United States.

When buying Bitcoin from an ATM, you will typically need to follow these steps:

• Enter the amount you want to purchase. Depending on local regulations and the amount, you may need to verify your identity.
• Provide your Bitcoin wallet address by using the ATM's camera to scan the QR code of your wallet address displayed in your Bitcoin wallet app.
• Pay using cash, credit card, payment app, or other accepted methods.
• Receive the Bitcoin in your wallet. This generally takes a few minutes, and the ATM will provide a transaction ID to monitor the status of the purchase.

Selling Bitcoin via an ATM typically involves the following steps:

• Enter the amount you want to sell. Depending on local regulations and the amount, you may need to verify your identity.
• Send Bitcoin to the provided address by scanning the QR code of the address and sending the Bitcoin using your wallet app.
• Receive cash from the ATM once it has received the Bitcoin. This generally takes a few minutes, and you can monitor the transaction status using your Bitcoin wallet app.

It is important to note that most Bitcoin ATMs charge transaction fees, which can range from 5-10% per purchase. Additionally, some Bitcoin ATM providers require users to have an existing account to transact on the machine.

Bitcoin's legality in Florida

Bitcoins Legality in Florida

The legality of Bitcoin in Florida has been a subject of debate and confusion in recent years, with differing opinions among judges, lawmakers, and regulators.

Florida Court Rulings on Bitcoin

Florida's 3rd District Court of Appeal ruled in 2019 that Bitcoin qualifies as a "payment instrument" and that selling it requires a money service business license. This decision contradicted a previous ruling by a Miami-Dade circuit judge, Teresa Mary Pooler, who stated that Bitcoin isn't commonly accepted as payment and thus isn't considered money.

The 2019 appellate ruling caused uncertainty and concern in the industry, leading to the closure of several Bitcoin ATM operations in Florida for fear of violating state money transmitter laws.

Legislative Attempts and Proposals

Florida lawmakers have made attempts to address the legal status of Bitcoin and virtual currency. In 2024, a bill (HB 273) was passed by the House and the Senate, aiming to clarify state law and financial regulations regarding cryptocurrency. The bill sponsor, Rep. Vance Aloupis, expressed surprise that Florida laws didn't previously address virtual currency. This legislation clarifies that only intermediaries, such as platforms enabling crypto transactions, require a money transmitter license, while individuals selling crypto are exempt from licensure requirements.

Additionally, the bill provides a more precise definition of cryptocurrency, paving the way for clearer regulation by state officials.

In 2021, there was an attempt to define what qualifies as virtual currency and limit who qualifies as a money transmitter, but the bill failed in the Senate.

Regulatory Perspective

The Florida Office of Finance Regulation has received numerous petitions from Bitcoin ATM operators and others seeking clarity on how virtual currency is regulated under state law.

The Securities and Exchange Commission's (SEC) recent approval of exchange-traded funds (ETFs) tied to the value of Bitcoin has made investing in cryptocurrencies more accessible for Floridians. However, certain restrictions specific to Florida remain in place, such as the requirement for a Money Services license for institutions involved in crypto trading.

Bottom Line

While the legal landscape surrounding Bitcoin in Florida is evolving, the state has a history of conflicting views and regulatory complexities. The recent legislative efforts and the SEC's approval of Bitcoin-related ETFs indicate a move towards a more permissive and innovation-friendly environment for the crypto industry in Florida.

Bitcoin's price

In May 2016, 1 BTC was worth about $500. As of January 2024, a single Bitcoin is hovering around $40,000, which is a growth of approximately 7,900%. In November 2021, Bitcoin reached an all-time high of $68,789. However, by December 2022, its price had dropped to $16,291, a 76% decrease over the course of approximately one year.

On 14 March 2024, Bitcoin's price exceeded $73,000, which was its highest ever. This was attributed to the approval of Bitcoin ETFs in the US. Previous price hikes in 2021 were linked to events involving Tesla and Coinbase. For example, in March 2021, Tesla's announcement that it had acquired $1.5 billion worth of Bitcoin fuelled mass interest.

The price of Bitcoin has also been influenced by regulatory approvals. In January 2024, the Securities and Exchange Commission (SEC) approved exchange-traded funds (ETFs) that correspond with the price of Bitcoin. This allows everyday investors to tie their money to the cost of Bitcoin without owning any outright.

Despite its volatile nature, some analysts believe that the price of Bitcoin could continue to rise as cryptocurrency and blockchain technology become more integrated into people's daily lives. However, due to its volatility, investors are cautioned not to allocate a large percentage of their portfolio to this risky asset class.

Frequently asked questions