5 Ways to Add Bitcoin to Your Portfolio

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Investing in Bitcoin is frequently the initial venture investors embark on within cryptocurrency. This can be a novel experience for those accustomed to conventional financial products. There's a multitude of avenues to purchase Bitcoin and other cryptocurrencies, ranging from stockbrokers to specialized exchanges, and even in-app purchases within certain applications linked to crypto.

However, evaluating your risk tolerance is advisable before plunging into this space. Like all cryptocurrencies, Bitcoin is speculative and experiences greater volatility than many established investments like stocks, bonds, and mutual funds.

Exchange-traded Funds or Trusts

In October 2021, ProShares, a financial company, introduced the first ETF linked to Bitcoin. This fund, known by its ticker symbol BITO, doesn't directly invest in Bitcoin. Instead, it puts money into Bitcoin futures contracts.

Grayscale Investments, a manager of digital currency assets, also provides trust funds for Bitcoin. Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Classic Trust (ETCG) are both publicly traded, allowing them to be purchased via numerous discount brokers.
However, there are associated fees, and GBTC often trades at a premium, meaning that the cost of GBTC shares is frequently higher than the value of Bitcoin, despite Bitcoin being its sole holding. Some investors pay this additional cost to acquire Bitcoin through a conventional exchange, thus avoiding concerns about wallets and storage.

Bitcoin ATMs

Bitcoin ATMs, available in diverse parts of the world, provide a platform for users to trade Bitcoin. Like regular ATMs, these machines require you to know your wallet number to start. If you use this method to incorporate Bitcoin into your portfolio, scrutinize the details to evade hidden charges. When converting BTC to USD using these machines, you should anticipate a charge to cater for the machine's maintenance.

Crypto Exchange

Crypto exchanges are a common method for acquiring Bitcoin, offering numerous benefits to traders. With many Bitcoin exchanges available, sift through and find the one that provides the most needed features. The advantage of buying Bitcoin through an exchange is they generally offer the lowest prices for trading Bitcoins,.This makes them an ideal choice if your goal is to trade them.
Another bonus is that many Bitcoin exchanges typically do not levy spread markups, meaning there are no hidden costs associated with trading prices. A third and notable benefit is that many Bitcoin exchanges provide Bitcoin wallets, allowing for secure storage of your Bitcoins directly within the exchange. However, remember that the pricing strategies can vary among Bitcoin exchanges, so choosing one that offers the best balance of fees, services, and customer support is recommended.

Wallet Software

Before initiating the purchase of cryptocurrency, you would require a digital wallet to store your assets. Often, digital wallet applications enable users to acquire Bitcoin within the app itself. To make this possible, wallet providers such as MetaMask collaborate with on-ramp services like Topper by Uphold, allowing users to purchase crypto using their debit or credit card. Opting for in-app Bitcoin purchases is often more cost-effective, as it eliminates the need to pay network fees for sending crypto off-exchange.

Peer-to-Peer Apps

A multitude of financial applications now offer the functionality to purchase Bitcoin. PayPal and Venmo are among the top-ranked financial apps that have made buying or selling Bitcoin straightforward through their platforms. A small fee of $0.50 is charged per trade.
While there are spread markups on Bitcoin transactions, you're not burdened with any fees for keeping Bitcoins in your PayPal account. One remarkable feature is the ability to engage in trades as low as a dollar on these apps. The fee structures are similar across both platforms, allowing you to choose the platform that best fits your needs.

Endnote

Whether you're new to investing or a veteran of the markets, adding some BTC to your portfolio might just be the push you need to hit your 2023 goals. Start exploring these options and get ready for the next step in crypto investing.

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