Unless you're living under a rock, you've heard about crypto assets and Bitcoin. As a decade ago it was something only a few people did, now everyone is buying and selling virtual assets. Crypto assets' popularity surged back at the end of 2017 when Bitcoin reached its peak and was valued at 20,089 USD.
Lucky are those who got in on time to buy and sell Bitcoin, and no need to get upset if you weren't as successful. Bitcoin and other leading virtual assets are growing their prices back again and might be a great investment opportunity throughout 2019 – 2020. In 2018, the total value of crypto assets was 128.78 billion USD, and with more industries and famous brands implementing them to power up a business, the capitalization is estimated to grow.
So, whether you're considering to experiment and buy some crypto assets and virtual assets, or you already have some investments, it's helpful to know how to do it right. Such a dynamic market requires discipline and attention to make a profit, so to make it easier for you to start, we made a list of top 5 tips on how to buy Bitcoin.
5 Key Insights on Buying Bitcoin
What we've noticed over the years in the blockchain and crypto industry, that complexity of buying and safekeeping the assets scares off potential buyers. You have to create a specific wallet, then find a suitable exchange, and follow up with erratic market changes. It's challenging to start and maintain the profit, but our team gathered some valuable tips and tricks to make buying Bitcoin painless and enjoyable. Without further ado, here's how you can start to feel like a pro in virtual asset trading.
Never go all-in
The rule of thumb for any investment – be it currencies, stocks, or digital gold – is to never go 'waist-deep' in either of them. As said by Nicholas Nassim Taleb, a world-renowned statistics and risk analysis mastermind, and the author of the bestselling book The Black Swan – "You can never be absolutely sure about anything."
Overconfidence is one of the biggest reasons why traders lose their money, as it blurs the perception of risk and leads to disasters. That's why you shouldn’t spend more than 10% of your savings on a single asset, whether it is Bitcoin or US Government Bond. Diversification – a.k.a. splitting the capital across multiple cross-independent, and ideally, multinational types of assets – is the cornerstone of any legitimate investment portfolio. If you are just starting and not familiar with the risks crypto assets can undergo, starting with no more than 1% of all your liquid assets should be your rule of thumb.
Don't keep all your eggs in a single basket
As all crypto asset veterans know, you should never, under any circumstance, keep all your assets with a single exchange. Stories about MTGox or BTC-e are still haunting early Bitcoin adopters as well as newcomers, raising serious concern about whether any exchange can really be trusted to the depths of one's heart.
One of the options to distribute risks is to use more than one exchange for trading purposes. If you use, say, five different exchanges to buy and store crypto assets, in any critical scenario you're not exposing more than 20% of your portfolio to counterparty risk. (you might still lose all your money if the virtual assets all go to 0, but at least that won’t be the exchange’s fault). With apps like OSOM, you can easily manage funds on not just five, but up to twenty different exchanges at once. And store some of your funds, that you aren’t planning on trading anytime soon, in our own wallets.
The second best practice to feel confident about your funds' safety is to use a service which insures all deposits with a third-party company. This way, if all hell breaks loose, you'll always get your money back.
Trade using only credible exchanges
There are hundreds of exchanges that offer to trade an array of crypto and virtual assets. If you are absolutely new to this market, you may get quickly carried away by blasting banners, vague promises, and fake volumes, which in essence are shaped and sharpened to make you swipe your credit card without thinking twice.
The most credible exchanges, like Coinbase, never use their position to help new projects raise capital, but instead offer an environment for already existing projects with a proven history. Other popular exchanges, like Binance, use their market position to invite developing companies to promote and sell their virtual assets on their platform.
These exchanges put their reputation at stake for the promise of solid due diligence, but projects still get negative feedback and quality concerns. An exchange that wants to squeeze profits out of their customers will exploit every possible means of doing so. An exchange that puts the customer first, will most likely have a smaller choice of products, but also much higher standards of customer protection.
Get yourself a crypto wallet
While exchanges allow storing crypto assets, they never actually give you a wallet or act as storage. What you usually get is just a 'balance' number in your user dashboard, while you can never be 100% sure if all the balances are supported by real money. At the end of the day, you will either have to (a) trust that the exchange can cover every single withdrawal at any given moment, or to (b) store your funds elsewhere after every purchase.
On top of that, having a separate wallet allows you to have much faster transactions. Often exchanges take extra time to check outgoing transactions, add additional fees, and even avoid technical advancement (like implementing segwit). Sophisticated wallets, on the other hand, make their best to become a reliable instrument of remittance.
There is so much more beyond Bitcoin in the crypto market. Hundreds of projects rating from incredibly boring to amazingly awesome compete against each other for their place under the sun, with some of them, like Ethereum, already ahead of the race with previously unseen concepts. It is worth writing a dedicated article about some of them that stand out, like Polkadot, Telegram Open Network or Polybius, but you can always start with the Top 15 of Coinmarketcap.com – world’s first tracker of crypto assets.
Buy Bitcoin with OSOM
We hope you'll find these tips useful for your next purchase, but before you head to the crypto asset world, we want to give a bonus tip. Well, it's more of a suggestion. You need to find an exchange to buy Bitcoin, but there are so many different options, which makes it complicated to find the right one. At OSOM, we thought of this inconvenience and came up with a solution.
We allow our app users to link multiple exchange accounts to one OSOM platform. It's better to have everything in one app because trying to handle several different ones can cause you to lose track and thereby money. And you don't need that kind of struggle in your life.
Additionally, if you're still searching for that one perfect exchange, OSOM has your back. We offer an exchange feature on the app. It covers Euros to Bitcoin and Ethereum and back to Euros at no deposit or withdrawal fees - just a 1.5% conversion. You can try it today and buy Bitcoin with OSOM!
Buying and trading Bitcoin can be intimidating to start, but everything changes when you have something on the side to guide you. We hope our five tips helped you get more familiar with the virtual asset market, and remember:
- Don’t put more than 1% of your total liquid assets into crypto if you are just getting started
- Don’t spend more than 10% of your crypto allocation on a single asset
- Distribute your assets across exchanges and wallets
- Find one or more reliable exchange before starting to trade
- Pick the right virtual asset wallet to safeguard your holdings
- And don’t forget to explore!