How to buy Bitcoins? Does this question trouble you a lot? Well, don't worry. Just so you know, the process of buying bitcoins is much simpler and faster than mining one. If you think that crypto trading is banned entirely, you've been misled! In this article, you will understand how to buy bitcoins in India, even after the bill regarding the ban of cryptos was presented.
Before buying bitcoin, every aspiring investor should have the required KYC documents and a mode of payment. You should have a bank account. You cannot expect to buy bitcoin in cash, can you? Also, it is recommended to have a personal crypto wallet outside the crypto exchange account for the worst-case scenario.
How to Invest in Bitcions?
Let's look at the step-by-step procedure to buy bitcoins.
Step One: Selecting a Crypto Exchange
The first step to trade in bitcoins is to have an account on a crypto exchange. Some exchanges allow withdrawal to the investor's wallet for additional safety, which is icing on the cake. But this feature is irrelevant for traders. As they trade crypto daily, it becomes a hectic process to transfer the holdings every time to a personal wallet and vice versa.
In India, WazirX, CoinDCX, and BuyUCoin are some of the most popular crypto exchanges. To have a risk-free and better experience, it is advisable to use safe internet practices, such as two-factor authentication and unique and complex passwords. It leads to maximum security of the account and prevents hackers from hacking it. Putting easy passwords like 1234 means giving an open opportunity to hackers to take away your cryptos.
Step Two: KYC and Payment Option
After you open an account, it is necessary to do the KYC process by uploading the relevant documents, like PAN Card, address proof, etc. It ensures the legitimacy of identity. Then, a payment option is also required to purchase bitcoins. You can directly link your bank account or do transactions through a debit or a credit card. Now, UPI is also accepted as a mode of payment in crypto exchanges.
But before choosing any option, analyze the transaction fees involved in every case. Also, crypto exchanges levy fees on bitcoin withdrawals. So, be mindful of the total costs involved and select the exchange accordingly. Your ultimate goal is to earn magnificent returns, isn't it? It will be unwise if all the returns are snatched by the exchanges in the form of fees.
Step Three: Placing an Order
After fulfilling all the legal formalities, your account is ready to use. You have to place an order to buy bitcoins. Due to massive technological improvements, crypto exchanges have become similar to stock exchanges. Like stock markets, there are different types of orders available, such as Market Order, Limit Order, and Cover Order.
Besides these basic features, some crypto exchanges also offer more amazing facilities. Coinbase has an option to make recurring purchases automatically, which depends on the time which you have chosen. It helps in averaging the cost of investment to earn better returns.
Unlike stock markets, the crypto market remains open 24X7 across numerous exchanges. It helps to trade bitcoin anytime. But it is better to trade crypto during peak hours to get more volumes. It creates an opportunity for a day trader to earn significant profits in intraday transactions.
Step Four: Safe Storage
As mentioned above, personal crypto-wallets can be operated to get additional safety of your investments. It ensures that only you can access the holdings and avoids the risk of losing your precious investment to hackers. What's more, some wallets also give you the feature to swap one crypto for another!
There are two types of crypto wallets: Hot Wallets and Cold Wallets. Hot wallets are online wallets, which require an internet connection. Although they are more convenient to access and make transactions, they are more vulnerable to hack. Although cryptos are considered safer, they are not free from hacks. In 2020, criminals stole $2 Billion worth of cryptos. So, it is necessary to take adequate precautions while using hot wallets.
On the other hand, cold wallets don't require an internet connection. The private key of the user is stored physically or offline. So, there is a relatively lower risk of theft in these wallets.
Some people use a paper wallet. They print the keys on paper, and laminate them and store them in bank lockers! But liquidity is compromised as trading is not possible if you don't have that paper. Another common type of cold wallet is a portable wallet, where the keys are stored on a USB drive. It is secured and accessed from anywhere. But, they have their problems. There are many causes of the keys getting lost, which led to 20% of total bitcoins getting lost!
How to Buy Bitcoin After the Bill?
In the recent budget, the Finance Minister introduced a bill to ban all private cryptocurrencies. And what's more, the government will be launching its virtual currency. It has made crypto investors dazzled and tensed as the bitcoin fell over 4% on that day. But let's get one thing cleared: you can still buy bitcoins!
The bill is not implemented yet and will take some time as the government has other priorities due to the COVID pandemic. Moreover, there will be a time frame to cash out your bitcoins, just like it happened at the time of demonetization in 2016. So, keep calm and invest in crypto. You have sufficient time to earn lubricious returns for the time being.
The first step to buy bitcoins is to select a crypto exchange by analyzing various pros and cons. Subsequently, an account has to be opened and verified through KYC. Also, a payment method is required to add funds to your crypto account. After fulfilling the formalities, the account gets activated for trading. Firstly, the order is placed. When the execution is complete, bitcoins get credited to your account. You can keep it in the account itself. Or can withdraw it in a personal wallet also, which can be offline or online.
Also, the bill to ban cryptos isn't implemented yet. So, trading in bitcoins is still legal. In the end, remember that it's not exactly a cakewalk for everyone. Invest only if you're fully aware of what you might gain or lose out of it.
So, does your portfolio contain bitcoins? Let us know in the comments below