If you started investing in Bitcoin a few years ago, you would have made a spectacular return. For example, if you'd invested a measly $100 in 2010 you would currently have over $19 million! And even if you'd invested later on, say 2016, you'd still have made over a 1000% return.
Many people believe that Bitcoin still has a lot more growing potential. It's an excellent store of wealth, and is currently only used by a very, very small % of the worlds population.
So I think it's worth having some skin in the game. Here is what I believe is the best way to invest in Bitcoin
Dollar Cost Averaging
Trying to pick the perfect time to buy Bitcoin is a fools game. The reality is that nobody knows what the price of Bitcoin is going to do. If you invested when Bitcoin was at peak hype, you probably would have lost money. But if you had invested a small amount at regular intervals, you'd be in profit.
Dollar cost averaging is all about making small investments over a long period of time. It is probably the only proven investment strategy that works over a long period of time. When you dollar cost average, sometimes you'll buy Bitcoin when the price is higher, and sometimes when the price is lower. But overtime as Bitcoin gains in popularity, becomes rarer and more valuable, you'll benefit as the price rises.
Investing using Coinbase and DCA
The good news is that investing in bitcoin using dollar cost averaging is super easy to do. My favourite platform for doing this is Coinbase. Here is why…
Why I like Coinbase
- Trusted Exchange – Coinbase is run by a proper company not some dodgy dude out of his shed. Coinbase are committed to being compliant with U.S and international laws and has developer a super reputation for both it's trustworthiness and security.
- Easy to Use – Some exchanges can be difficult to use and get your head around. Literally anyone can buy Bitcoin using Coinbase and that's the way it should be.
- Reasonable Fees – Fees on Coinbase are similar to other exchanges
- Good range of Cryptos to Invest in – they offer more than just Bitcoin. You can also invest in coins like Ethereum, Litecoin and Ripple.
- Control your own keys – for advanced users, and holders of larger amounts of crypto you easily transfer your Coins to “Wallet” which is an app built by Coinbase for controlling your own Bitcoin.
How to Get Started Investing in Bitcoin
Getting started investing in Bitcoin is super easy. Here is how to setup Dollar Cost Averaging investments with Coinbase:
- Sign up to Coinbase Here
- Verify your account – this process is usually pretty quick and I was able to complete it in 15 mins.
- Link a payment method – depending on your country this will be either credit card or bank account
- You're all set to start!
On Coinbase you can start investing in bitcoin with as little as $10. Remember that Bitcoin is still a speculative investment. I don't recommend betting the house on it. Invest what you can afford to lose.
Setup Recurring Buys
Coinbase offers a feature to setup automated recurring buys. While you could manually buy Bitcoin at set intervals, I find it works best when you automate the process. Once setup it's set and forget.
Here is how to setup recurring buys on Coinbase:
- Click the big blue “trade button”
- Enter the amount you'd like to invest (remember DCA works best with small amounts at regular intervals)
- Hover over the “recurring” icon (like shown below) and choose the frequency
I recommend setting up with a Weekly or Monthly buy. And don't worry about investing a huge amount to begin with. You can start with just $10 and then invest more as you go along. I've set myself a monthly reminder to increase my recurring investment. Although I don't increase it every month, it's a good reminder to see if I'm in a position to invest more.
Expand your portfolio
Once you've gotten familiar with Bitcoin you can expand into other coins. There are many to choose from. Just remember that alt coin investing can be extremely risky. So make sure you do your research and only invest in cryptos that you think have solid fundamentals.
Store your Bitcoin
Coinbase offers an online cloud wallet. This is suitable for storing smaller amounts of Bitcoin. But I would never recommend storing large amounts of cryptocurrency online. Remember with Bitcoin you are essentially your own bank – you can store it where and however you like. You could use the excellent “Wallet” app from Coinbase. This is a mobile based app and has automated backup. There are also a number of hardware wallets now available. These will set you back around $100 and offer enhanced security.
Get $10 Free to get started
How would you like a bonus $10 free bitcoin to get your portfolio started? Here is how to get a bitcoin bonus from Coinbase:
- Sign up to Coinbase using this unique link
- Buy $100 worth of Bitcoin
- You'll automatically get an extra $10 bonus added to your account
You can find out more about Coinbase here
