Ok, now how do you purchase Bitcoin. There are a lot of ways, but pay attention to the fees. I have used these products and can recommend them. One thing to consider as you are evaluating the services is their withdrawal limits. If you plan on making large trades/buys/moves, make sure you can get your cryptocurrency off the exchange without hitting limits. This is the place on my blog where I have a chance to get paid for writing it. If you join through these links, or input my code, we both get a small payment after you satisfy the criteria to join these services. Join them all!
Gemini - Gemini was one of the first exchanges to have KYC and AML (know your customer and anti-money-laundering) requirements. I believe all the US exchanges require this today. Gemini was started by the Winklevoss Twins, who you may know were early in Facebook. Gemini is domiciled in New York and is highly regulatory compliant. New York is known for having some of the most strict regulations for banking and investments. Gemini created the Gemini US Dollar Stable Coin - GUSD. You can ACH or wire money from your bank into Gemini. We both receive $10 in Bitcoin if you buy or sell $100. Referral Code: 6nd9azce
Coinbase - The gorilla in the US market. High fees, and so I don’t recommend them for this reason. However, it is easy to move your assets to Coinbase Pro, for better trading fees. I would suggest that Coinbase Pro is intimidating to the novice trader. Also, Coinbase does have a lot of tutorials that will teach you about many of the cryptocurrencies. You get rewarded a small amount of that currency for watching the tutorials. You have surely heard that Coinbase recently went public via direct listing instead of a traditional IPO in April 2021. They have around $100B AUM. We both get $10 in bitcoin if you sign up through my link.
*** For transparency, this page is edited, and I previously personally had assets and suggested using Voyager and Celsius and BlockFi, but no longer. Please beware counter-party risk and custody your own crypto. I do believe Gemini and Coinbase are safe, but you should buy there and then move the crypto to your own wallet ASAP.
Those are ways to buy bitcoin (and other crypto) in an exchange. It is currently not possible to buy bitcoin at your traditional brokerage houses. You can buy shares in a trust. There are two US bitcoin trusts: Grayscale Bitcoin Trust (GBTC) and Osprey Bitcoin Trust (OBTC). There are some important differences. They have different management fees (2% for GBTC and 0.5% for OBTC). They also have different Net Asset Value. GBTC is 0.000937093 OBTC is .00034. Be aware that you may be buying these shares at a discount or a premium to the Net Asset Value. OBTC is very new (Jan or Feb 2021 launch), and Grayscale has been around since 2017.
I suspect we are only weeks away from a US Bitcoin ETF. Canada has recently allowed one called Purpose Investment that trades on the Toronto Stock Exchange under ticker BTCC. There are also Bitcoin ETFs in European Markets. It is unclear to me why the SEC has postponed decisions on all the ETF proposals submitted by US entities.
Now that you have read all of this, you are probably ready to see the data available at Bitbo.io. There is a LOT of information on this page. Bookmark it and come back to it. The current premiums for those publicly traded funds are posted here in real time. Please buy at a discount if possible! I believe these premiums will eventually fade as the ETFs come online. However, the market is not always rational in the short term.
I have mentioned, but not really discussed the altcoins. There are essentially 5 types of cryptocurrencies. Here are some examples of each:
Blockchain Protocol - Bitcoin, Bitcoin Cash, Litecoin. These are proof of concept and currency.
Smart Contract - Ethereum, Cardano, Polkadot, Solano. These want to be the global computer of the internet.
Utility Token - CEL token (Celsius Network), BAT Basic Attention Token, FIL Filecoin. VET VeChain. These have specific uses within a network or program.
Stablecoin - USDC, GUSD, Tether. These are tied to the value 1:1 of the fiat currency.
Scam - Dogecoin falls under this category, it doesn’t do anything, and is only started as a meme joke about the Shiba Inu dog. There are a lot of people in on the joke. It’s kind of like RickRolling. Doge is fun and silly and you might make some money on a trade that you could convert to BTC. There are other outright scams, masquerading as one of the other 4 types of tokens. These are also ‘rug pulls,’ where the people that sold the coin simply disappear with your money. Be wary of any low market cap coin. I suggest you wait until a coin has actual use before buying anything.
How much should you buy? That is up to your own risk tolerance. I do think there is an urgency to this, so you can beat the big institutions before they start buying up the bitcoin. Over the last year, I have primarily purchased Bitcoin and Ethereum at about 60% to 30% ratio and bought ADA 7% and Dot 3%. Ethereum has done much better than Bitcoin over the last 12 months, and my holdings are nearly 50:50 now. I don’t plan to sell any Eth yet. I definitely will not until the position is long, for capital gains tax reasons.
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