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How to invest in Bitcoin

The first step to buying bitcoin is choosing a legitimate, registered cryptocurrency exchange. There are plenty of scam trading websites out there, so make sure to do your research.

Coinbase, Kraken, and Gemini are probably among the most popular platforms for Americans looking to buy bitcoin. You can also use the Cash App which helped Beckham receive his bitcoin payment in 2021. You can also buy bitcoin at Bitcoin ATMs but using these comes with a lot of security risks.

Once you select a cryptocurrency platform, you can connect your bank or payment card to fund the account before placing an order to purchase bitcoin. Financial experts recommend bitcoin accounting for no more than 5% of your portfolio.

Once you’ve purchased the asset, you could choose to store it in an online wallet provided by the crypto platform, but this makes you vulnerable to hackers and scammers. The safer option is to save your private key offline on a secure physical device. You can sign up for a software wallet, such as the Coinbase Wallet, or buy a hardware wallet such as the Ledger.

Beckham's decision to convert his paycheck into bitcoin instantly is a move many successful investors and entrepreneurs make. They invest first and spend what’s left over. Credit reporting giant Experian calls this “reverse budgeting.” You can use a strategy called dollar-cost averaging and buy a fixed amount at regular intervals to minimize the impact of volatility.

If you sell, convert, or spend bitcoin, remember you may owe capital gains taxes since the IRS treats virtual currencies as property for federal income tax purposes.

If you prefer not to own bitcoins directly but you do want exposure to the cryptocurrency, you can consider spot bitcoin ETFs and bitcoin futures ETFs.

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