It is a rarity not to see the mention of Bitcoin in every news cycle. But this sensation around cryptocurrency lives up to its hype, bit by bit, having intense fluctuations throughout the year. The year 2020 also experienced its price undulations, witnessing a dip around Thanksgiving and surging up to $19,857, an all-time high, in November.

This surge was like a moth to the flame but for investors who justifiably paid more attention to Bitcoin. You can too be a part of the hype by investing in the bitcoin system. But the location of Bitcoin’s influence is such that it also draws in novice or casual investors alike. It seems that there’s hardly anyone who can resist its discreet charm.

Here’s a brief overview of Bitcoin and how you can invest in it.

Defining Bitcoin

Bitcoin is a type of cryptocurrency, a digital form of money where each transaction is verified via cryptography. As explained by educator Jimmy Song, Bitcoin is “decentralized, digital, and scarce money.” Bitcoin is also abbreviated by its ticker symbol that spells BTC. It is also one of the best instances of cryptocurrencies.

There are several such cryptocurrencies, a growing asset, sharing some traditional aspects with currencies but digital.

By Bitcoin, it can mean these two following things:

  • It can mean the token, keys to a unit of the digital currency that is traded and owned. A BTC token is stored inside a bitcoin wallet identified by a series of numbers and letters like “1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.” If someone wants to direct you to bitcoin, they can send it to your wallet address and access it with private keys.
  • It can also mean the protocol, i.e., a distributed ledger that records all the balances of token traded. These ledgers have massive files stored in them, spread across the world, and the network stores respective transactions unto the ledger, which is then propagated to the other ledgers present on the same network.

Bitcoin is mined, not like ores or natural resources, but drilled across a virtual system where people solve complex mathematical problems to create bitcoins. If you succeed in solving the problem, then you earn 12.5 bitcoins. This occurs at an interval of every 10 minutes.

Every single bitcoin is not immune to tracking since they exist on the blockchain system. Despite the monitoring, there’s no fixed requirement to divulge your identity. The transaction occurs via addresses; the amount sent or received is then tracked based on the address created. These transactions’ anonymous flavour makes the investors and government remain sceptical since there is no centralized surveillance for every transaction taking place.

In late 2020, Bitcoin was trading at $18,000, with predictions of its upward trend in 2021. However, these estimations might not be conducive given the market volatility and the recurrent price fluctuations that bitcoins experience.

Despite its volatility, Bitcoin saw many investors in 2020 as opposed to the traditional form of investment. It instead had an upward performance amid the pandemic, creating a haven for old and new investors alike.

Suppose you are also one of these enthusiasts who feel an added advantage in buying Bitcoin. In that case, the following paragraphs will elucidate on the topic of investment and how you can, too, be an investor.

Everything you need to know about Bitcoin investment

Bitcoin investments sound like an alternative realm for those who are acquainted with traditional forms of investment. Although it has a recurring reputation for being untrustworthy, it must carry a similar weightage of risks as any other investment venture out there.

The Bitcoin figures rose in December 2018, hitting a whopping $3237, recording an all-time high and drawing in a lot of attention. It reached its record high at $41,946.74 in January 2021. At the time of writing this article, 1 BTC was 46,431 US dollars. (This data will vary, you can check the current evaluation on Google Finance)

Moving on, you can buy Bitcoin in these four easy steps.

  • Choose an exchange: Exchanges like Coinbase are amongst the well-known BTC brokers who can give you a headstart in your first investment.
  • Choose a storage option: Do you plan on storing your Bitcoin in a hot or cold wallet?
  • Choose the amount you’d want to buy: You would need to fix an amount that is feasible for you to invest.
  • Choose your investment timeline: Are you planning for a long-term investment or a short one?

Cryptocurrency Exchanges

Cryptocurrency exchanges, for new investors, a diligent decision to choose from. Generally, these exchanges would charge a small percentage for your respective price. Here’s a list of popular deals that you can look into:


  • When it comes to its volume, Binance is the world’s largest cryptocurrency exchange.
  • They charge a nominal fee of 0.1% for your trades; you can avail discounts too.
  •  You can use cryptocurrency to confirm your purchase but expand their investor demographic; they have also added credit cards as a payment option but incur an additional fee.
  • The Binance API empowers its users with the ability to connect to the Binance servers via Python or several other 3rd party platforms to create and automate trading bots.


  • Coinbase has been a synonymous name as a crypto exchange platform. A popular choice for traders based in the U.S., it charges 0.5% of the purchase or the selling price of your asset alongside a fee.
  • Coinbase also allows you to link your bank account, which also explains its widespread popularity.
  • Apart from Bitcoin, you can also trade litecoin, altcoin, and etherium.


  • They trade eight cryptocurrencies, including BTC.
  • Coinmama charges a fee of 5.9% and an additional 5% if you are using a credit card.
  • If you are using this exchange, then you need to make a minimum purchase of $60.


  • Gemini is a U.S. based exchange, trading BTC, litecoin, zcash, and bitcoin cash.
  • Their transaction fee typically ranges between $0.99 to 1.49% of your purchase, plus a 0.5% fee.
  • The transaction fee will depend on your purchase volume.

Miscellaneous ways to invest in Bitcoin

  • Peer-to-peer Bitcoin Owners:  If someone you know owns bitcoin, you can directly buy it from them. The concept here is very similar to how you’d place an order or buy an item on Craiglist. It can use tools like, Bitquick, and Bisq for the peer-to-peer investment of Bitcoin. But be advised not to trade with sources you feel might not be trustworthy.
  • Grayscale Funds: It is an asset manager for digital currency; Grayscale Bitcoin Trust to GBTC is one of its two investment trusts, the other being Grayscale Ethereum Classic Trust to ETCG. You can publicly trade via discount brokers with fees, of course. GBTC shares cost more than the bitcoin itself, but its functionality solely relies on it being a form of traditional avenue for investors to buy BTC.
  • Bitcoin ATMs: As a regular ATM, you can use a Bitcoin ATM, except that you can use the latter to trade the digital currency. You can use Coin ATM Radar to see all the Bitcoin ATMs nearby.
  • Traditional Stockbrokers: eToro and Robinhood are amongst the two mainstream brokers to offer bitcoin. eToro is unique, featuring its social trading ecosystem, which allows its user to follow famous traders. Robinhood, a mainstream investment broker, started offering BTC with no fees for trades.

Storing Bitcoin

Much like your cold hard cash, it can store bitcoin too. There are two kinds of BTC wallets, a hot wallet, and a cold wallet, that digitally store your BTC asset with an added security layer.

Hot Wallet

  • These are usually offered by exchanges where you trade your BTC assets.
  • It can access Hot Wallets via apps or browsers on the internet.
  • You can get them for free from your trusted exchange, where it will store your purchase automatically.
  • Third-party hot wallets are typically preferred by investors, which are also free to download.

Examples: Coinbase, Electrum, Mycelium.

Cold Wallet

  • Cold wallets are portable and encrypted devices that you can carry around, allowing you to store Bitcoin in offline mode.
  • Unlike hot wallets, they are not free, costing as high as $100.
  • Cold Wallets are pondered to be more stable.

Examples: Trezor Pay, Ledger Nano.

Note: Always use a strong password and two-step authentication for your accounts in digital wallets and exchange platforms.

Final Takeaways

No one knows what Bitcoin has in store in the next five years. With the scale at which Bitcoin operates, decentralizing the banking role, it’s doubtful that Bitcoin will be replacing dollar bills or euros. However, 2020 witnessed a few encouraging changes in the way Bitcoin is perceived. For instance, PayPal launched its very own crypto trading service to democratize the use of Bitcoin trading.

So, to subscribe to any optimistic forecast might not be conducive for many but feasible for those strategically inclined to invest in Bitcoins. But historically, bitcoin has performed well over the years, rarely suffering dips, recording an all-time high in the last financial year. All in all, it can be quite conducive for you to go ahead and check Bitcoins as an alternative investment opportunity.