How to Invest in Virtual Currency, Bitcoin! Beginner's Guide and Hands-on

How to Invest in Virtual Currency, Bitcoin! Beginner's Guide and Hands-on

With the rise of virtual money, Bitcoin has become one of the most popular investment choices, but for many newbies, how to start investing is a big question. Today, I'm going to discuss how to start investing in Bitcoin and virtual currencies from scratch, and provide a practical guide on how to do it. Whether you want to learn about market trends or need to know how to choose a trading platform, this article will help you enter this volatile and opportunistic field with confidence.

1. Basics of virtual money investment

Understanding the basic concepts of virtual money is the first step before investing in it. Virtual money, also known as cryptocurrency, is a digital asset that uses cryptography to protect transactions and control the creation of new money. Bitcoin is the most iconic virtual currency, created in 2009, and is decentralized, eliminating the need to rely on third-party institutions such as banks.

Investing in virtual currencies requires an understanding of how the market works, which is somewhat different from the traditional stock market. The value of cryptocurrencies is volatile and susceptible to a wide range of factors such as market sentiment and policy regulation. Therefore, novice investors must be patient and learn to control their risks.

Market volatility:
The virtual currency market is highly volatile. The price of Bitcoin and other virtual currencies can fluctuate dramatically over a short period of time, and therefore requires a high level of mental fortitude on the part of the investor. Beginners should be aware of this and be prepared for possible ups and downs.

2. How to choose the right trading platform

Choosing a reliable and secure trading platform is the key to making a virtual currency investment. Many platforms offer trading services for Bitcoin and other virtual currencies, but they vary in terms of security, fee structure, and user experience. In the Taiwan market, well-known platforms such as OKX have a high level of trust and favorable user ratings.

Platform Selection Essentials:

1. Security: Ensure that the platform has advanced security measures such as two-step verification and cold wallet storage.
2. Transaction Handling Fee: Trading fee structures vary from platform to platform, and choosing a platform with lower fees can help minimize investment costs.
3. Supported currencies: Check whether the platform offers a wide range of virtual currency options to facilitate diversified investment.

For example, Euronext supports a variety of major cryptocurrencies such as Ether and Litecoin, in addition to Bitcoin, and offers an attractive rebate program, which makes it a good choice for newbies as well.

3. Common Ways to Invest in Bitcoin

For newbies, investing in Bitcoin is not difficult to understand. There are several common ways to invest in Bitcoin:

1. Buy Direct: This is the easiest way to buy Bitcoin directly through an exchange. Newbies can choose to buy Bitcoins on the platform in either NT or USD and hold or resell them.
2. Fixed-term: This approach reduces the risk of short-term fluctuations and is particularly suitable for investors with a low risk tolerance. Regularly investing a fixed amount of money each month, regardless of market price fluctuations, spreads risk and increases the chances of long-term profitability.
3. Held for the Long Term (HODL): Many Bitcoin investors choose a "long term hold" strategy, keeping Bitcoin as an asset. This approach is suitable for investors who are optimistic about the future value of Bitcoin.

Whichever method you choose, it is important to understand the market trends and fundamentals of the underlying investment (Bitcoin).

4. how to manage risk and diversify investments

Risk management is crucial when investing in virtual currencies, especially for newcomers. In this market, prices fluctuate dramatically and without an effective risk control strategy, it is easy to suffer huge losses due to market downturns.

Risk Management Strategies:

1. Set a stop-loss level: Set a stop-loss price, and when the price of the virtual currency falls to a certain level, actively sell it to avoid further losses.
2. Decentralized investment: Instead of investing all your money in a single currency, you can choose to invest in different types of virtual currencies such as Bitcoin and Ether to minimize the risk.
3. Funds Management: You should plan the amount of money you want to invest before investing, and not exceed the amount you can afford to lose.

It is also possible to take advantage of rebate programs offered by exchanges to reduce trading costs, which is also a good strategy for long-term investors.

5. Hands-on: How to Start Investing in Bitcoin

After understanding the basics of virtual currency investing, let's go through a practical procedure. Below are the steps to do so, using Euronext as an example:

1. Register for an account: First, go to the Euronext website or app and register for an account. Fill in the basic information and complete the identity verification.
2. Recharge funds: After completing the registration process, you will be able to top up your funds. You can use NTD, USD and other currencies to top up.
3. Select a currency pair: Select the currency pair to be traded on the platform, e.g. Bitcoin / NTD, and decide whether to buy or not based on the current price.
4. Place an order: Choose either a Market Order or a Limit Order to purchase according to your needs. A market order is a transaction at the current market price, while a limit order is a transaction at a price you are willing to accept and wait for the market to reach that price.
5. Withdrawal and storage: Once the transaction is complete, you can withdraw the Bitcoin to Cold Wallet for long term storage or choose to continue trading on the exchange.

Hands-on Tips:
If you are new to trading, it is recommended that you invest a small amount initially and familiarize yourself with the trading process through actual operations. You can also set a good stop-loss and take-profit level to ensure that the risk can be controlled.

Frequently Asked Questions Q&A

Q1: How to choose an exchange for newbies?
A1: Newbies should choose an exchange with high visibility and good security. For example, OKX has high security, supports multiple currencies, and provides an easy-to-use interface, which is very suitable for newbies.

Q2: How high are the transaction fees for virtual money?
A2: Exchange fees usually vary depending on the volume and type of trading. Generally, larger exchanges offer more favorable rates. For example, Euronext has lower fees and a rebate program to further reduce costs.

Q3: How to increase the return of virtual money investment?
A3: Returns can be enhanced through regular fixed investment, diversification, and setting profit and loss limits. Maintaining sensitivity to market dynamics and making timely adjustments to investment strategies can also help improve returns.

The purpose of this article is to help new investors better understand the virtual money market and how to start investing. We hope that you can apply this knowledge and use it to gain experience and achieve a good return on your investment!