Best Bitcoins To Invest: Top Crypto Picks

Bitcoin and Ethereum are the two most dominant cryptocurrencies in the market, but there are thousands of others to choose from.

If you're looking to invest in Bitcoins, you'll first need to open an exchange or platform that allows Bitcoin trading. Some of the most popular platforms include Coinbase, Gemini, Robinhood, Crypto.com, Binance, Kraken, and Uphold.

Each platform has its own unique features, fees, and level of security, so it's important to do your research before choosing one. Some platforms offer a wider range of cryptocurrencies to invest in, while others provide additional features such as crypto savings accounts or the ability to copy other traders' portfolios.

It's also worth noting that investing in cryptocurrencies is considered a high-risk investment due to the extreme volatility and unpredictability of the market.

How to buy Bitcoin

Bitcoin is a dominant force in the cryptocurrency market, and there are several ways to invest in it. Here is a step-by-step guide on how to buy Bitcoin:

Choose a Platform:

Select a cryptocurrency platform or exchange that suits your needs. Some popular options include Coinbase, Gemini, Kraken, Crypto.com, and Robinhood. These platforms offer different cryptocurrencies, fees, and consumer protections, so it is essential to research before choosing.

Create an Account:

Once you've chosen a platform, create an account by providing personal information such as your name and contact details. You may also need to provide proof of address and a copy of your ID to comply with anti-money laundering regulations.

Deposit Money:

Most platforms offer various ways to deposit money, such as bank transfers, credit cards, or debit cards. Bank transfers are usually the cheapest way to fund your account, while credit and debit card deposits often incur higher fees.

Buy Bitcoin:

Remember, you don't have to purchase a whole Bitcoin. You can choose the amount you want to spend. Some exchanges offer an instant convert function, while others may require you to place an order.

Store Your Bitcoin:

You can choose to store your Bitcoin in a custodial wallet on the exchange where you bought it, or you can move it to a non-custodial crypto wallet. Custodial wallets are convenient and easy to understand, but your assets could be at risk if the platform fails. Non-custodial wallets come in two forms:

• Hot Wallets: These are connected to the internet and are easy to set up and use. However, they are more susceptible to hacking. Examples include Metamask and other online or app-based wallets.
• Cold Wallets: These are physical devices, such as Ledger or Tezor, that are kept offline. Cold wallets provide more security, but you need to keep both the device and security codes safe.

When deciding where to store your Bitcoin, consider factors such as security, convenience, and control over your assets.

How to store Bitcoin

Storing Bitcoin safely is crucial, as losing access to your crypto means it's likely gone forever. Here are some detailed instructions on how to store your Bitcoin securely:

Understanding Wallets and Storage Options:

Before purchasing Bitcoin, it's essential to understand the different types of wallets available and the distinction between hot and cold wallets.

• Hot Wallets: Hot wallets are connected to the internet and allow for easy access to your Bitcoin. Examples include desktop, mobile, and web-based wallets. They are convenient for transactions but are more vulnerable to hacking.
• Cold Wallets: Cold wallets are offline storage methods, considered much safer than hot wallets. Examples include hardware wallets (like USB drives) and paper wallets (a physical piece of paper with your keys written on it).

Best Practices for Storing Bitcoin:

• Use a combination of hot and cold wallets. For example, you can use a hot wallet for a small amount of Bitcoin needed for transactions and a cold wallet for the bulk of your Bitcoin holdings.
• Always back up your Bitcoin wallet regularly to prevent loss due to computer failure. Ensure you back up all the necessary files and store them in multiple secure locations.
• Keep your software and operating systems up to date to patch security vulnerabilities.
• Use a strong password and two-factor authentication for added security.
• Consider a multi-signature wallet, which requires multiple keys to sign a transaction, adding an extra layer of security.
• Physically record your recovery phrases (also known as seed phrases) and store them in a secure location that only you can access.
• Never share your recovery phrases or private keys with anyone and avoid storing them on your computer or online.

Choosing a Reputable Exchange:

When selecting a cryptocurrency exchange to purchase Bitcoin, consider the following factors:

• Cold storage: Reputable exchanges will store most customer crypto assets in "cold storage," typically on servers disconnected from the internet to reduce hacking risks.
• Insurance: Look for exchanges that carry external insurance to protect against theft. Research the insurance provider, the amount insured, and the circumstances under which you would be compensated.
• Third-party audits: Choose an exchange that provides proof-of-reserves, ensuring they hold enough assets to cover client deposits. Prefer exchanges that undergo independent audits of their accounts.
• User-level security: Activate additional security features like two-factor authentication to protect your account.

Storing Bitcoin in a Wallet:

After purchasing Bitcoin, you can choose to leave it on the exchange (custodial wallet) or transfer it to your own hot or cold wallet. Here are some things to keep in mind:

• Custodial Wallets: If you decide to keep your Bitcoin on the exchange, ensure the platform has high security standards. While convenient, custodial wallets give a third party control over your crypto, and you rely on their security measures.
• Non-Custodial Wallets: If you opt for a non-custodial wallet, you'll have full ownership and control over your private keys. This can be a hot wallet (software-based) or a cold wallet (hardware or paper-based).
• Hardware Wallets: These are small, portable devices that allow you to store your Bitcoin offline. They are considered highly secure but come with the risk of losing the device or security codes. Examples include Ledger and Trezor.
• Hot Wallets: Online hot wallets are convenient and easy to use, especially for transactions. However, they are more vulnerable to hacking, so exercise caution when choosing this option.

Remember, there is no single "best" way to store Bitcoin, as it depends on your individual needs and risk tolerance. Always prioritize security and educate yourself on the various wallet options before making a decision.

Bitcoin wallets

There are two main types of wallets: custodial and non-custodial. Custodial wallets, also called online wallets, are hosted by a third party, such as a company that provides enterprise-level data security systems, or a cryptocurrency exchange. Non-custodial wallets, on the other hand, are those in which you take responsibility for securing your keys.

There are also two subcategories of wallets: hot and cold. Hot wallets are connected to the internet or to a device that has an internet connection. Cold wallets, on the other hand, have no connection.

• Hot Wallets:
• Software Wallets: These are applications for desktops or mobile devices, such as Trezor, Electrum, and Mycelium. They are generally free and easy to use, but they are potentially vulnerable to malware or computer viruses.
• Web Wallets: These are provided by a third party, typically a crypto exchange, and offer seamless access to your holdings using a web browser. Examples include Coinbase, Metamask, and Guarda.
• Mobile Wallets: These allow users to send or receive cryptocurrency on the go, anywhere they have an active internet connection. Examples include BitPay, Edge, Trust, Electrum, and Blockchain.com.
• Cold Wallets:
• Hardware Wallets: These are physical devices, often resembling a USB thumb drive, that store your private keys offline. Examples include Ledger Nano S, Trezor Model One, and Ledger Nano X.
• Paper Wallets: These are offline solutions where private keys are written down or printed and securely stored. You can create your own using websites such as WalletGenerator.net and BitcoinPaperWallet.com.

Bitcoin exchange-traded funds

ETFs are traded on stock exchanges, providing investors with diversified exposure to various asset classes and the flexibility to buy or sell shares throughout the trading day at market prices. Instead of holding a bunch of different stocks, an investor can simply own shares of one ETF that is invested in those companies.

A futures contract is a standardised contract where two parties agree to exchange a specific quantity of a standardised asset on a specific day for a particular price. Bitcoin futures contracts are traded on the Chicago Mercantile Exchange. So, a Bitcoin futures ETF is an exchange-traded fund that holds Bitcoin futures contracts and sells shares of the fund to investors. These shares are bought and sold on a mainstream exchange.

The first concept for an ETF that held Bitcoin emerged shortly after investors and brokers noticed that Bitcoin prices were trending upward and gaining popularity among investors. This signalled an opportunity to generate returns by trading Bitcoin. As Bitcoin's price rose to tens of thousands of dollars, retail and average investors lost the opportunity to invest directly in Bitcoin. Brokerages, responding to demand for investor access to Bitcoin, began to design Bitcoin exchange-traded funds.

The first official Bitcoin-linked ETF was the ProShares Bitcoin Strategy ETF (BITO), which mainly uses futures contracts. It was approved by the SEC in October 2021 and is listed on the New York Stock Exchange.

In many crypto fans' minds, a Bitcoin ETF would consist of Bitcoin purchased by a company, which would securitize them and offer shares to investors. However, the Security and Exchange Commission rejected these proposals until 2024.

A court order in August 2023 forced the SEC to reconsider these proposals, and on 10 January 2024, the Commission approved 11 Bitcoin spot ETFs. These spot ETFs, which hold Bitcoin as opposed to futures like the ProShares ETF, began trading in January 2024.

Bitcoin ATMs

• Get a Bitcoin wallet: When you purchase Bitcoin, you need a place to store it. A Bitcoin wallet is a digital tool that allows users to store, send, and receive Bitcoin securely.
• Find a Bitcoin ATM near you: There are tens of thousands of Bitcoin ATMs globally, most of them in the United States.
• Buy Bitcoin from the ATM: 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 with cash, credit card, or payment app. Receive the Bitcoin in your Bitcoin wallet, which usually takes a few minutes.

You can also sell Bitcoin at a Bitcoin ATM by following these 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 provided address and sending the Bitcoin using your Bitcoin wallet app.
• Take your cash. Once the ATM receives the Bitcoin, it will dispense your cash, which generally takes a few minutes. You can monitor the status of the transaction using your Bitcoin wallet app.

Benefits of using Bitcoin ATMs include ease of access, privacy, and the ability to sell Bitcoin. However, there are also some risks and considerations to keep in mind. Bitcoin ATMs typically only allow you to trade cash for Bitcoin, and they have been frequent targets for scams and fraud. Additionally, Bitcoin and other cryptocurrencies are not regulated by the federal government, so your digital assets are not insured by the FDIC.

It is important to research potential fees charged by Bitcoin ATM operators, as they can be high. Some operators may charge a variable miner fee in addition to transaction fees.

Frequently asked questions