Getting Started with Bitcoin: A Beginner’s Guide

To start with Bitcoin, you need to know the basics of the cryptocurrency, its value, and the steps to creating a Bitcoin (BTC) wallet. Here’s everything you need to know about investing in BTC so you can make smart decisions and maximize your profits.

How to Start Investing in Bitcoin

BTC is the first and largest cryptocurrency to date. Introduced as an alternative to fiat currency, whose value is dependent on policies set by central authorities, BTC and other cryptocurrencies are free of any kind of central control from financial institutions.

Because it relies on blockchain technology – a digital ledger that records transactions across a peer-to-peer network – BTC has neither an intrinsic value nor a physical form. It is also created and used without the need for any intermediaries.

While BTC can be used to make purchases, many people around the world use it as an investment option, much in the same way they invest in stocks and bonds. It is considered by holders as a store of value and referred to by its backers as “digital gold.”

If you’re new to the world of crypto, it can be a little daunting to get started. But with a little guidance, it shouldn’t take you too long to figure out how to start with BTC. In this beginner’s guide, we’ll go over everything you need to know about investing in BTC. We’ll cover how to buy BTCs, how to store them safely, and how to invest in cryptocurrency.

How Much Is BTC Worth?

Since its introduction in 2009, BTC’s value has risen, fallen, and risen again, reaching a price peak in 2025 when it hit $109,114.88. As of writing, BTC’s value hovers around $97,000, with experts predicting it could test its all-time high again in the coming months.

More newcomers are looking into incorporating crypto into their portfolios. In 2025, approximately 28% of American adults, or about 65 million people, owned cryptocurrencies. This could signal a pivotal shift for crypto, which was perceived as a mere “fringe” investment just a few years ago.

What You Should Know Before Investing in BTC

Before diving into the particulars of investing in BTC, it’s crucial to understand what influences its value relative to other cryptocurrencies and the legal and tax implications you might encounter.

1. Cryptocurrency is a Volatile Investment

Volatility refers to the degree and frequency at which an asset’s or market’s value changes. The entire cryptocurrency market – not just BTC – remains incredibly volatile. BTC’s value can plummet by tens of thousands of dollars within a day or even minutes due to significant changes in the financial or global markets.

While stock markets also experience volatility influenced by interest rates, political instability, and inflation, crypto’s volatility is predominantly due to its lack of intrinsic value.

As a speculative asset, BTC’s value primarily depends on public sentiment. Even minor events (like tweets from Elon Musk) can cause significant price shifts.

Scarcity

Proponents argue BTC holds value because it is scarce. Currently, about 19.86 million BTCs circulate, and minting will stop once 21 million are mined. However, the issuance of new BTCs per mined block halves approximately every four years, delaying the end of minting until around 2140.

Regulation

Governments globally are starting to issue regulations on cryptocurrencies:

• In the U.S., a new infrastructure bill requires all cryptocurrency exchanges to notify the IRS of crypto transactions.
• Countries like China, Egypt, and Algeria have rendered the use and exchange of crypto illegal.

Mainstream Use

As previously mentioned, public opinion and increased adoption can drive BTC’s price up. With an estimated 659 million global cryptocurrency users in 2025, accounting for roughly 8.3% of the world’s population, BTC’s value is expected to rise further.

2. BTC Is Just One of Many Digital Currencies

Though BTC pioneered the cryptocurrency landscape, it’s far from the only player. Currently, there are over 37 million cryptocurrencies, with BTC, Ethereum, Tether, XRP, and BNB leading by market cap.

Ethereum (ETH) poses a threat to BTC’s dominance with its broader application as a decentralized computing network, supporting smart contracts and NFTs. Even so, BTC maintains the highest market cap at over $1.92 trillion, significantly overshadowing ETH at $222.2 billion.

Investment advisors agree on one principle: don’t put all your eggs in one basket when managing volatile assets like crypto.

3. Know What You’re Investing In

Prior to investing, familiarize yourself with the pros and cons of popular cryptocurrencies. Conducting thorough research and understanding risk management are crucial when dealing with volatile assets like BTC and ETH.

Given that cryptocurrency and blockchain technology are still developing, predicting market evolution is challenging. Presently, only a select few companies accept BTC for legitimate transactions, including Xbox, Burger King, Starbucks, Whole Foods, and luxury vehicle distributor BitCars. Moreover, many only accept BTC through gift card purchases on third-party sites.

Investing in cryptocurrency does not shield you from theft risks, either. While genuine crypto exchanges experience few security breaches, there have been reputable reports of fake exchanges that defraud investors. Be wary of scam “investment managers” promising easy wealth growth.

What You Need to Start Investing in Crypto

To begin investing in BTC, you’ll need several essentials:

• Identification documents for verification purposes
• A bank account and relevant information (note that most exchanges do not accept credit card payments)
• A stable and secure internet connection
• An account at a legitimate cryptocurrency exchange
• A cryptocurrency wallet

We’ll explain how to set up the last two items below.

A Step-by-Step Guide to Investing in BTC

Follow these steps to start buying and selling BTC:

Step 1: Choose a Cryptocurrency Exchange

As BTC is open-source technology, there isn’t a single official platform to buy and sell virtual money. Instead, you can purchase BTC through a crypto exchange, which operates like an online stock brokerage.

With around 600 crypto exchanges globally, you can use fiat currency to buy crypto, trade one cryptocurrency for another, or convert crypto coins back to cash.

When selecting a crypto exchange, consider:

• Available coins: This is less of an issue for BTC but may pose challenges with newer, less popular coins.
• Storage options: A heated debate exists over keeping coins in a hosted wallet on exchanges versus a personal digital wallet due to hack risks.
• Security: Cryptocurrency lacks central backing, meaning your funds aren’t as protected as regular bank assets. Larger exchanges often have insurance against fraud and cyber threats.
• Liquidity: Higher trade volumes on an exchange increase your chances of favorable buying and selling.
• Fees: Exchanges charge fees for transactions like trades, deposits, and withdrawals.

Popular BTC exchanges include:

• Coinbase
• Bitstamp
• KuCoin
• OKX

Once you’ve picked an exchange, the account setup is straightforward. You’ll verify your identity using an ID copy and link your bank account or crypto wallet.

Step 2: Set Up Your Cryptocurrency Wallet

A crypto wallet serves as a digital storage container for your digital currency, akin to a bank account. While users can store their coins on the exchange, opting for a more flexible and secure option is advisable:

• Hot wallet: Software-based and accessible online through programs, web extensions, or mobile apps.
• Cold wallet: Hardware wallets that connect to computers, usually via USB, offering enhanced security through encryption.

Accessing crypto wallets involves using public and private keys:

• Public keys: Similar to email addresses, needed for receiving cryptocurrency.
• Private keys: Function as passwords for the wallet holder, usually presented as numerical codes or seed phrases. Store your private key securely, as losing it can lead to irretrievable loss of assets.

After setting up the wallet, link a payment method, such as a bank account or Apple Pay. Notably, credit card payments are generally not accepted for crypto purchases.

Step 3: Make Your First Purchase

Congratulations, you’re ready to buy your first BTC! The process is similar to purchasing stocks through an online broker. You’ll select the coin, indicate your spending amount, and proceed with the transaction.

The purchasing process may vary by exchange, with some allowing various order types, including:

• Market order: Buy BTC immediately at the best available market price.
• Limit order: Buy or sell BTC at a specified price, aiming to mitigate price risks.
• Stop order: A market order triggered when a price condition is met.

Step 4: Manage Your BTC Investments

You have several strategies for managing your cryptocurrency investments:

• Buy and hold: A common approach, involving holding onto your BTC while waiting for appreciation. Many investors allocate only a small portfolio percentage to crypto.
• Participate in day trading: A high-risk strategy where investors buy and sell crypto within the same day for profit. Extensive market knowledge and trading tools are essential for this approach.
• Purchase other digital assets: With NFTs gaining traction, some investors consider trading BTC for ETH to enter the NFT market, as most NFTs are based on the Ethereum network.

The Pros and Cons of Investing in BTC

To sum up our guide, let’s review the advantages and disadvantages of investing in BTC:

BTC Investing Pros

• Trading BTC requires no licenses or certificates; joining a crypto exchange is simple with ID documents and a bank account.
• As a decentralized digital currency, BTC is less susceptible to inflation, geopolitical instability, and policy changes.
• Properly managed BTC trading can yield substantial returns.
• As the leading coin, BTC’s market price is projected to reach $100,000 soon, with mainstream adoption increasing its value.

BTC Investing Cons

• BTC’s high volatility introduces significant risks; its speculative nature means public sentiment heavily influences value.
• Cybersecurity threats such as hacks and online fraud present inherent risks.
• Competition from other cryptocurrencies offering innovative technologies and functionalities continues to rise.
• Governments worldwide are imposing regulatory policies and capital gains taxes on crypto transactions.

Is BTC a Good Investment?

Whether BTC is a good investment is subjective. Some view it as a speculative bubble on the verge of bursting, while others believe its value will continue to ascend.

The Bottom Line

It’s vital to recognize that, like any investment, BTC carries risks, and returns are not guaranteed. However, understanding BTC and its operational mechanics can reveal its potential in diversifying your portfolio and offering protection against economic downturns.

There you have it – a comprehensive guide on how to start with BTC. If you’re interested in other comprehensive guides like this, be sure to follow crypto.news for more resources and tools to help you in your crypto journey.