Best Apps For Bitcoin Investment And Trading

There are several apps available for investing in Bitcoin. These include Bitcoin wallets, cryptocurrency exchanges, traditional brokers, money transfer apps, Bitcoin ATMs, and Bitcoin exchange-traded funds (ETFs). Some popular options are eToro, OKX, Binance, Coinbase, Crypto.com, Kraken, Gemini, and Robinhood. It is important to do your research and carefully assess the pros and cons of each service before choosing one.

Choosing a crypto exchange

Authenticity and Security:

Conduct thorough research to determine the legitimacy and security of the platform. The authenticity and security protocols of an crypto exchange are crucial for safeguarding your funds and data. Ensure that the exchange has a good reputation and robust security measures in place to protect your information and investments.

Payment Methods:

Different crypto exchanges support various payment methods for purchasing cryptocurrencies. Some common options include bank transfers, PayPal, credit cards, and debit cards. Some platforms may also allow the use of fiat currencies, such as USD or GBP, while others may only accept cryptocurrency for purchases. Choose an exchange that offers a payment method that suits your needs, especially if you are a beginner and don't already own any crypto.

Supported Coins and Tokens:

While most crypto exchanges support Bitcoin and Ethereum, there are thousands of other cryptocurrencies available. If you want to invest in a diverse range of coins beyond BTC and ETH, look for an exchange with a wide variety of supported assets. Binance, for example, offers access to hundreds of coins and is popular among traders seeking exposure to a broad range of cryptocurrencies.

Transaction Fees:

Understanding the fee structure of a crypto exchange is essential. Transaction fees can vary significantly across platforms, and some may have hidden costs. Look for an exchange with transparent and competitive fees, and consider whether you prefer a platform with flat transaction rates or a more flexible structure.

User Interface and Experience:

The user interface and overall user experience of an exchange play a vital role in your success as a trader or investor. Choose a platform with an intuitive and user-friendly interface that makes it easy to navigate and execute trades. Additionally, consider the customer service and other customer-related functionalities offered by the exchange.

Some of the leading crypto exchanges that cater to both experts and beginners include:

• Binance: Considered the most powerful crypto exchange globally, with a daily trading volume of over $13 billion. It offers access to hundreds of coins and advanced features like staking and derivative trading.
• Coinbase: One of the most widely used digital currency exchanges, especially in the US. It offers a user-friendly platform, insured custodial wallets, and advanced trading options. However, it has relatively high fees and doesn't support as many cryptocurrencies as Binance.
• Kraken: One of the oldest crypto trading platforms, offering access to hundreds of cryptocurrencies and fiat funding options. It provides advanced trading tools and competitive fees through its Kraken Pro platform.
• CEX.io: Known for its excellent user interface, making it a good choice for beginners. It supports a wide range of cryptos, including Bitcoin, Ether, and Litecoin, and has highly rated customer support.

Connecting your exchange to a payment option

Depending on the exchange, you may be required to provide personal identification information, such as a driver's license or Social Security card, as well as details about your employer and source of funds. This process is similar to setting up a typical brokerage account.

It is important to note that fees vary for deposits and transactions made via different payment methods. Using a credit card to purchase cryptocurrency can be costly due to the associated processing fees and the risk of fraud. Credit card issuers often treat these transactions as cash advances, resulting in higher interest rates. Therefore, it is generally advisable to use cash or another cryptocurrency to fund your purchases.

Additionally, some banks may question or even stop deposits to crypto-related sites or exchanges. Thus, it is essential to consider the potential fees and limitations associated with each payment option before proceeding.

Once you have connected your exchange to a payment method, you can move on to the next step of placing an order for your desired cryptocurrency.

Placing an order

Once you've chosen a platform to buy and sell Bitcoin, you'll need to connect your bank account or card details to the exchange.

Most exchanges offer both market and limit orders, and some also provide stop-loss orders. A market order is an instruction to buy or sell bitcoin at the current market price. A limit order is an instruction to trade a certain amount of bitcoin at a certain price or better. A stop-loss order is an instruction to sell bitcoin if its price falls to a certain level – this is used to limit losses.

Some platforms, like Coinbase, also offer recurring investments, allowing clients to dollar-cost average into their investments of choice.

When placing an order, you'll also need to consider how you want to store your bitcoin. While exchanges offer an exchange wallet, this is not recommended for large or long-term holdings. Instead, you could use a hot wallet or a cold wallet. A hot wallet is an online wallet, such as an app on your phone, which is convenient for small amounts of bitcoin or bitcoin that is actively being traded. However, hot wallets are less secure and are susceptible to theft. A cold wallet is not connected to the internet and is, therefore, a more secure way of storing your bitcoin. Cold wallets include paper wallets and hardware wallets.

Safe storage

When it comes to the safe storage of your Bitcoin, there are several options available to you, each with its own advantages and disadvantages. Here is a detailed and instructive guide to help you make an informed decision:

Cold Wallets (Hardware Wallets)

Cold wallets are considered one of the safest options for storing Bitcoin and other cryptocurrencies. These wallets are not connected to the internet, reducing the risk of online attacks and unauthorized access. Cold wallets are physical devices, often resembling USB drives, that store your private keys offline. They are ideal for long-term storage and large amounts of Bitcoin. While they may be more expensive and less convenient for quick transactions, they offer superior security. It is recommended to purchase hardware wallets directly from the manufacturer to avoid tampered devices. Examples of hardware wallets include Ledger Nano X and Trezor Model T.

Hot Wallets (Software Wallets)

Hot wallets, in contrast, are connected to the internet and offer convenient access to your Bitcoin for everyday transactions. They are often free or low cost and can be accessed through computers or mobile phones. However, being online also makes them vulnerable to cyber-attacks, phishing, and hacking. It is crucial to follow strict security measures and regularly update your hot wallet software to protect your Bitcoin. Examples of hot wallet providers include Guarda and Mycelium.

Paper Wallets

Paper wallets are a simple and inexpensive way to store your Bitcoin. They involve printing your private and public keys on paper, eliminating the risk of online hacking. However, paper wallets are susceptible to physical damage, loss, or theft. It is important to store them in a safe, secure, waterproof, and fireproof location. Additionally, the creation and storage of paper wallets require meticulous practices to ensure the long-term safety of your Bitcoin.

Crypto Exchanges

Crypto exchanges, such as Coinbase, Binance, and Kraken, offer integrated platforms for buying, selling, and trading cryptocurrencies. They provide quick access to a wide range of digital currencies and often include wallet services. However, they are also vulnerable to hacking and security breaches, and there may be higher fees involved. It is recommended to use exchanges with strong security measures and enable two-factor authentication for added protection.

Custodial vs. Non-Custodial Wallets

It is important to distinguish between custodial and non-custodial wallets. Custodial wallets are managed by a third party, such as an exchange, which stores your private keys for you. This can provide convenience, but your keys are more vulnerable to attacks. On the other hand, non-custodial wallets give you full control over your private keys, but you are solely responsible for their security.

Other Considerations

When choosing a storage option, consider the amount of Bitcoin you hold, your technical expertise, the level of security offered, customer service, and the cryptocurrencies supported by the platform. Additionally, evaluate the backup options available, as losing access to your wallet can be devastating. It is also essential to keep your software and devices up to date to protect against new security threats.

Tracking your crypto

Crypto Portfolio Trackers

Crypto portfolio trackers are websites, apps, or platforms that allow you to monitor your cryptocurrency investments in real time. They connect to your wallets and exchanges to provide a comprehensive view of your crypto holdings and their performance. Some popular crypto portfolio trackers include:

• CoinStats: Offers enhanced security measures, the ability to buy crypto on the platform, and supports over 20,000 tokens.
• Delta Investment Tracker: Supports over 10,000 tokens and 300+ exchanges, allowing you to track your tokens and stocks in one place.
• Blockpit: Connects to over 300 exchanges and wallets, making it ideal for tax reporting and precise portfolio tracking.
• The Crypto App: Features customizable crypto watch lists, dynamic coin performance overviews, and real-time market alerts.

Tax Reporting and Compliance

Tax reporting is a crucial aspect of crypto investing. Here are some tools to help you with tax compliance:

• CoinTracker: A crypto tax platform that integrates with TurboTax and other tax software. It supports a wide range of exchanges, wallets, NFTs, and cryptocurrencies.
• CoinTracking: A crypto portfolio tracker and tax calculator that supports a wide range of exchanges, wallets, and cryptocurrencies. It also offers tax reporting features for various countries.

Real-Time Market Data and Alerts

To make informed investment decisions, it's essential to stay on top of market data and be notified of significant price changes. Consider using platforms like Investing.com, which provide real-time and historical price data, news, and analysis for various cryptocurrencies. You can set up alerts to be notified when prices cross certain thresholds.

Security and Protection

When choosing a crypto portfolio tracker or exchange, prioritize security features like two-factor authentication and multi-layer encryption to protect your crypto assets from potential hacks or data breaches. Additionally, consider using a stand-alone crypto wallet, such as Electrum.org or LedgerWallet.com, for added security.

Frequently asked questions