If you’re starting to get interested in Bitcoin but don’t know where to begin, this guide will clearly explain how to purchase Bitcoin.
Buying for the first time can be intimidating, but by reading this guide, you’ll be able to take your first step with confidence!
- What is Bitcoin?
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Bitcoin is a digital currency that operates without the oversight of central banks or governments. It can be bought, sold, and transferred through exchanges. In cryptocurrency trading, the aim is to profit from price fluctuations.
- Preparation Before Trading
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Acquiring basic knowledge is crucial. Understand blockchain technology and major cryptocurrencies, and set clear investment goals.
- Choosing a Reliable Exchange
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To purchase Bitcoin, it’s essential to choose a reliable exchange. Compare security features, fees, and ease of use to select an exchange that suits your needs.
- How to Purchase Bitcoin
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Log in to the exchange and purchase the desired amount of Bitcoin. Beginners are advised to start with a small amount.
- Precautions and Risk Management When Buying
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Bitcoin prices are highly volatile, so it’s important to time your purchases wisely and maintain a long-term perspective. Additionally, implement security measures such as two-factor authentication and strong passwords, and establish rules to trade without letting emotions take over.
- User-friendly interface
- Wide range of trading pairs
- Leverage trading options
- Robust security measures
- Various trading features
1. What is Bitcoin?
Bitcoin is a type of digital currency known as cryptocurrency (crypto asset). Its distinctive feature is that it operates without the oversight of central banks or governments, allowing users to trade through cryptocurrency exchanges and send or receive funds directly between individuals.
Bitcoin has experienced significant value fluctuations since its inception in 2009, yet it remains supported by many people and is used as an investment and payment method.
Bitcoin is often referred to as digital gold!
Cryptocurrency trading involves buying and selling cryptocurrencies like Bitcoin and Ethereum to profit from price fluctuations. Trading strategies can be short-term (day trading or swing trading) or long-term (holding), each requiring different approaches.
Basically, you buy (sell) cryptocurrency and sell (buy) when the price fluctuates. You predict trends based on the latest information to aim for profit.
2. Preparation Before Trading
2.1 Acquiring Basic Knowledge
The cryptocurrency market is highly volatile, so having a solid foundation is important. Understand the following points:
- Blockchain Technology: The underlying technology of cryptocurrencies.
- Major Cryptocurrencies: Bitcoin, Ethereum, Ripple, etc.
- How Trading Works: Order types and price determination mechanisms on exchanges.
*High volatility means that prices fluctuate significantly.
There are many unfamiliar terms, aren’t there? Let’s learn them together little by little.
2.2 Setting Goals
Clearly define what you aim to achieve through trading.
Your strategy will differ depending on whether you’re pursuing short-term profits or long-term asset growth.
3. Choosing a Reliable Exchange
3.1 Selecting a Trustworthy Exchange
To purchase Bitcoin, you need to register with a cryptocurrency exchange. Think of exchanges as “marketplaces for Bitcoin,” where you can buy and sell Bitcoin. Key points to consider when choosing an exchange include security measures, fees, and usability.
For cryptocurrency exchanges, Bybit and Bitget are recommended.
3.2 Key Points for Selection
Here are the key points to consider when choosing an exchange:
- Security Measures: Two-factor authentication and the presence of cold wallets.
- Fees: Compare trading fees and deposit/withdrawal fees.
- Usability: Ease of interface and customer support.
- Available Cryptocurrencies: Ensure the exchange supports the cryptocurrencies you wish to invest in.
Start by using the exchange and researching anything you don’t understand. You’ll encounter various unfamiliar terms, but understanding them will make the process enjoyable.
3.3 Identity Verification and Deposits
When registering with an exchange, you will often need to complete Identity Verification (KYC: Know Your Customer). This is a crucial step to maintain security. Once verification is complete, you can deposit fiat currency (JPY, USD, etc.) via bank transfer or credit card and use these funds to purchase Bitcoin.
4. How to Purchase Bitcoin
It’s time to purchase Bitcoin. Log in to the exchange and buy the desired amount of Bitcoin. For beginners, it’s advisable to start with a small amount.
- Log in to the exchange.
- Click the “Buy Bitcoin” button.
- Specify the amount and make the purchase.
Once the purchase is complete, Bitcoin will be reflected in your wallet.
This is the basic process. In reality, there may be variations in account types, and sometimes you cannot purchase Bitcoin directly with fiat currency.
That’s right. Often, purchasing Bitcoin requires USDT (a cryptocurrency pegged to the USD).
5. Precautions When Purchasing Bitcoin
Like any investment, Bitcoin carries risks. Keep the following points in mind:
5.1 Be Aware of Price Volatility
Bitcoin is a highly volatile asset. Prices can surge significantly in a short period or drop just as dramatically.
Timing your purchases is crucial, but maintaining a long-term perspective is key to success.
5.2 Security Measures
To protect your account, implement the following measures:
- Set Up Two-Factor Authentication (2FA): Require additional verification during login and withdrawals.
- Use Strong Passwords: Create complex passwords using a combination of letters, numbers, and symbols.
- Beware of Phishing Scams: Do not click on links from unofficial websites.
Considering security is extremely important in the world of cryptocurrencies!
6. Basic Trading Concepts
6.1 Buying and Selling
- Buying (Long Position): Purchasing cryptocurrency with the expectation that its price will rise.
- Selling (Short Position): Selling cryptocurrency with the expectation that its price will fall.
6.2 Order Types
The main order types include:
- Market Order: Buying or selling immediately at the current market price.
- Limit Order: Setting a specific price at which to buy or sell.
- Stop Order: Placing an order to minimize losses by selling or buying when a certain price is reached.
The basics are to buy and sell! Trading seems simple but is actually quite complex.
7. Analysis Methods
7.1 Technical Analysis
A method of predicting future prices based on past price trends and trading volumes. Key tools include:
- Moving Averages (MA): Calculating the average price to determine trends.
- RSI (Relative Strength Index): An indicator showing overbought or oversold conditions.
- MACD: An indicator used to assess the strength of a trend and identify potential reversal points.
7.2 Fundamental Analysis
A method of analyzing the intrinsic value and market environment of a cryptocurrency. Consider the following elements:
- Project Background: Development team, technical capabilities, and objectives.
- Market Demand: Number of users and adoption status.
- Regulatory Trends: Impact of regulations in different countries.
By conducting technical and fundamental analysis, you can predict trends. Always keep up with the latest information, which is very important.
8. Risk Management
The cryptocurrency market is characterized by high risk and high return. Manage risks by considering the following points:
8.1 Setting Investment Amounts
Invest with disposable funds and avoid investing large amounts at once. Utilize a “portfolio strategy” by allocating a portion of your funds to risk assets.
Always invest with surplus funds!
8.2 Stop-Loss Rules
Set rules to automatically sell if losses exceed a certain limit, allowing you to trade without being swayed by emotions.
You can set the price to ensure you don’t incur further losses.
9. Continuous Learning and Information Gathering
The cryptocurrency market is constantly changing, so it’s necessary to keep up with the latest information and trends.
- News Sites and Blogs: Specialized sites like Crypto AI News, CoinDesk, and CryptoSlate.
- SNS and Communities: Collect real-time information from platforms like Twitter, Reddit, and Telegram.
- Specialized Books and Online Courses: Utilize educational materials that cover basics to advanced topics.
It’s important to know various sources of information.
Summary
Bitcoin is an asset that has the potential to significantly impact our lives and economy in the future. Purchasing for the first time may seem daunting, but use this guide as a reference and gradually gain experience. Most importantly, ensure you manage risks effectively without overextending yourself.
We hope that as you dive into the world of Bitcoin, you can trade enjoyably and safely. Take this opportunity to challenge yourself while learning about Bitcoin step by step!
Glossary
The following are key terms and their explanations used in this beginner’s guide to cryptocurrency trading. Use them to help understand cryptocurrency trading better.
1. Blockchain Technology
The decentralized ledger technology that underpins cryptocurrencies. By bundling transaction data into “blocks” and linking them in a “chain,” it achieves high transparency and security.
2. Cryptocurrency Exchange
An online platform where you can buy and sell cryptocurrencies like Bitcoin and Ethereum. There are numerous exchanges both domestically and internationally, each with different fees and supported cryptocurrencies.
3. Day Trading
A trading strategy that involves frequent buying and selling within a single day to profit from short-term price movements.
4. Swing Trading
A trading strategy that captures price swings over several days to weeks, taking a medium-term perspective.
5. Hold
A long-term investment style where you hold onto cryptocurrencies, waiting for their prices to increase. This approach avoids being influenced by short-term market fluctuations.
6. Two-Factor Authentication (2FA)
An authentication method that enhances account security by requiring an additional verification step, such as a smartphone app or SMS, in addition to a password.
7. Strong Password
A complex password combining letters, numbers, and symbols to prevent unauthorized access to your account.
8. Phishing
A scam where fraudulent websites or emails attempt to steal personal or account information. Always handle links from official sites with caution.
9. Market Order
An order to buy or sell immediately at the current market price. Used when you want to execute a trade quickly without specifying a price.
10. Limit Order
An order to buy or sell at a specific price. The trade only executes if the market reaches your specified price.
11. Stop Order
An order to automatically buy or sell when the price reaches a certain level, used to minimize losses by setting a stop-loss point.
12. Technical Analysis
A method of predicting future prices based on past price movements and trading volumes, using chart patterns and various indicators.
13. Fundamental Analysis
A method of analyzing the intrinsic value and market environment of a cryptocurrency, considering factors like project background, market demand, and regulatory trends.
14. Moving Average (MA)
A technical indicator that calculates the average price over a specific period to determine trends. Crosses between short-term and long-term moving averages can signal trend reversals.
15. Relative Strength Index (RSI)
An indicator ranging from 0 to 100, where values above 70 indicate “overbought” conditions and values below 30 indicate “oversold” conditions.
16. MACD (Moving Average Convergence Divergence)
A technical indicator used to assess the strength and potential reversal points of a trend by analyzing the difference between short-term and long-term moving averages.
17. Portfolio Strategy
An investment strategy that involves diversifying across multiple assets to manage risk while maximizing returns. This typically includes a mix of cryptocurrencies and other asset classes.
18. Stop Loss
A rule to automatically close a position when losses exceed a certain threshold, helping to limit losses without being influenced by emotions.
19. Volatility
An indicator of how much and how quickly the price of an asset can change. The cryptocurrency market is known for its high volatility, with frequent large price swings.
20. Cold Wallet
A wallet that stores cryptocurrencies offline, reducing the risk of hacking and unauthorized access.
21. Fiat Currency
Government-issued currency recognized as legal tender, such as the Japanese Yen or US Dollar, which serves as the base currency for exchanging cryptocurrencies.
22. Ripple (XRP)
A cryptocurrency developed by Ripple Labs aimed at enabling fast and low-cost international money transfers.
23. Security Measures
Methods to safely store and trade cryptocurrencies, including two-factor authentication, strong passwords, and phishing prevention measures.
24. User Base
The number of people using a particular cryptocurrency or exchange. It serves as an indicator of market demand and reliability.
25. Regulatory Trends
Movements in laws and regulations regarding cryptocurrencies by governments and international bodies. Changes in regulations can significantly impact the market.
