Okay, so you have heard enough about the world of cryptocurrency and bitcoin, and you want to be a part of it now. You have some money you want to put into the endeavor, but it’s difficult to know where to even begin. You have the question, “can I buy $100 of Bitcoin?”
While it is possible to invest $100 into bitcoin, and then own as much bitcoin as the $100 could purchase at the time, the value quickly changes. As its own currency, bitcoin experiences fluctuating value. Rather than always having $100 of bitcoin, the buyer would then have a small amount of bitcoin.
If you want to dive further into this question and know why bitcoin is the thing to invest in, how to spend your $100, where to spend it, and how to protect it, this is the article for you.
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A Quick Explanation of Bitcoin
Bitcoin is currently the most popular format of what is called cryptocurrency. You can trade different kinds of currencies for it. When you hear people talking about investing in bitcoin, it means they are going to trade ‘real money’ for a certain amount of crypto. In other words, they are going to buy an amount of bitcoin.
The quickest explanation for its recent attraction over the last decade is its fluctuating value within the markets—thousands of people have made millions and even billions of dollars based on their investments in this new form of money flow.
Bitcoin is not an official currency, however, and it’s a bit of a gamble to invest in. Just as the bitcoin market has risen, it has also fallen and while a person can make tons of money, this constant fluctuation in value can also cause someone to lose their entire savings. The gains are much higher, but the losses are still a significant risk.
Can I Buy $100 of Bitcoin?
To get back to the original question, “can I buy $100 of bitcoin?”, the answer is yes and no. You aren’t exactly buying it, you are exchanging it.
So let’s say you have one hundred American dollars, right? Right now, that money is in American currency. If you want to invest it in bitcoin, you’ll have to convert that into cryptocurrency, meaning it won’t be worth the same amount anymore, it won’t be worth the US dollar amount. Most people who invest in bitcoin do so in hopes that their money will grow in worth.
The amount of bitcoin you can buy fluctuates based on the market value of bitcoin at the time. Taking a look at the name, bitcoin is a type of cryptocurrency, which means it’s pretty much a digital form of money.
Much like how the US dollar is dependent on the economy and fluctuates in worth in comparison to the European Euro, the American dollar (and other currencies across the world) fluctuates in its comparative worth to the bitcoin.
So, yes, you can invest $100 into bitcoin, but you cannot have $100 of bitcoin, because it is its own currency, and it’s all digital. With that said, there really is no limit to how much bitcoin you can buy, but like any investment, you should invest wisely.
Identify Your Reason Why
Before you buy your share of bitcoin, it is important to identify the reason why you are interested in doing so. The reason behind this is that it will affect the way you approach your purchase. You have one hundred dollars, what is your goal for it once it is converted into cryptocurrency? Why do you want in on the world of bitcoin?
Bitcoin as an investment:
Do you want your money to grow? As you are likely very aware, many people invest in various markets with the objective of sacrificing a small amount of money which will increase in value over a given amount of time. Bitcoin has proven itself to be unstable, yet exciting in the possibilities of what it can do with even a small amount of cash. It should be noted that the market truly is unstable and any investment is a risk. It is wise to consider the possibility that any investment could be completely lost, while it is also possible that the investment will pay off in an increase in value.
Currently, one hundred American dollars is not worth very much in cryptocurrency, but the crypto world changes very quickly and is fairly unpredictable. Over time, your one hundred dollars could grow into a quite large amount. While it is a risk, it is also an investment.
Bitcoin as a currency:
Lots of places actually accept bitcoin as a form of cash or currency. One way to access your bitcoin and withdraw it as cash is through a cryptocurrency ATM that exchanges bitcoin for cash. You can find bitcoin or cryptocurrency ATMs in various locations around cities.
Many use bitcoin as a way to purchase things much like they would buy items or products with regular money. Why? There are a lot of reasons, but one that may be of interest is that there is a huge movement of people who believe that cryptocurrency is the future of money transactions, especially given that it is globally accessible and not controlled by a single governmental entity. With bitcoin slowly becoming the future of currency, this is the main reason the market value of bitcoin fluctuates so much.
When the value is high, it means there are larger groups (or groups of people with power) who believe that bitcoin has a high value. Those who influence the market are those who influence the value of what the bitcoin is worth in international currencies, including the American dollar.
When you invest your one hundred dollars into bitcoin, in a small way, you are increasing the value of what the bitcoin is worth. The more people do this, the more value it holds. If bitcoin became an official currency, its market would become more stable and would fluctuate less.
Selling your bitcoin:
Say your one hundred dollars goes up in monetary value. There are people and groups called buyers; what they do is in their name. They buy, or trade, your bitcoin for government-recognized currency like American dollars. This can be a great option for getting in and out of the market and can be repeated over and over, assuming the odds are in your favor.
The point of selling is buying bitcoin for a low price and selling it for much more than you paid. The reason buyers are willing to do this is that they believe your share is a good investment. You can sell your bitcoin by working through groups called brokers, or you can interface with the buyers themselves.
Another option, should you be prosperous enough, is to become a buyer yourself.
All the above:
Maybe you want to do a little bit of everything. Well, there are exchanges that are set up just for that, which is what we’ll get into next.
Choose Your Exchange
Exchanges are kind of like platforms. Knowing which you will be using is a game changer in the way your bitcoin journey will play out. Different exchanges have various strengths and weaknesses, and some are better for certain tactics than others, so it is important to do your research on which one you will be using when buying your share of crypto.
Comparatively, $100 is a relatively low amount to convert into cryptocurrency, so it is wise to choose only one exchange when investing. A few exchanges have been listed below, but it will be important to do some more research once you have decided why you are getting into this new market.
Once you have decided which approach you’ll be taking, you should also look out for the transaction and conversion fees of various exchange platforms and compare them to each other.
Here is a list of some of the best cryptocurrency exchanges out there, in no particular order, so keep in mind that there are many other exchanges in addition to those which have been listed below, some in desktop format and others in a mobile application form. Each exchange has different fees associated with them.
The basics
- Coinbase: most userfriendly, most popular (they charge a revenue fee)
- Binance: is user-friendly and cheaper than Coinbase
- Crypto.com: best for the experienced crypto investor
Store Your Bitcoin
Okay, so now you have your reason why, and you have chosen your exchange. Great work. Once you have converted your $100 into bitcoins, it’s time to choose a place to store your cryptocurrency. Just like you need a place to keep your credit and debit cards and physical money, you need a place to keep your cyber money. You have a few options and they all have their advantages as well as their setbacks. All of these choices are important to understand before you invest your one hundred dollars.
Where you store your bitcoin won’t affect if its value increases or decreases, as that is completely dependent on the market, it will only influence how secure it is.
You have various options to choose from for storing your crypto including your exchange of choice or something called a digital wallet. Many crypto exchanges use a digital wallet to hold onto users’ cryptocurrency. There are two types of wallets to choose from; hot wallets and cold wallets. Hot wallets store currency through the internet, which is what most exchanges use. Cold wallets store your currency offline. If you don’t end up using an exchange to keep your money, you’ll need to use a digital wallet of some sort.
In the exchange:
You can actually store your money in the exchange itself. What this entails is buying your share of bitcoin and leaving your new money in the app or whatever platform you choose, typically in a hot wallet that is housed and operated by the app. It will sit there until acted upon.
The advantage of this is that your crypto is liquid. You won’t have to take any extra steps to sell or move your money. The money is just there. Additionally, the exchange is free. What this means is that storing the money there does not cost anything.
The disadvantage, in large part, to storing your bitcoin in the exchange itself is that it is a less secure location. Exchanges are riskier places to keep your cryptocurrencies as they are more prone to get hacked and your money can get stolen easier because the currency is stored on the web in a hot wallet.
If you decide to keep your investment in your exchange, there are many advantages, but be aware that it is not necessarily the safest place to store your crypto. We recommend looking into the safety features of different exchanges before you decide on one.
One more disadvantage to exchanges is that if you want to use your bitcoins as a currency, to buy anything, you would need to transfer it to a wallet, either one provided by the exchange, in another software, or in a hardware device. So, it’s a good place for investing and trading, but not for making purchases.
Hot wallets:
Hot wallets are virtual. They are basically online storage units where you keep your bitcoin or other forms of cryptocurrency. An advantage of a hot wallet is that the wallet itself is free. With it, you can store your crypto, scan it, and buy things virtually, and the value will transfer to the seller much like a credit card.
Something that compels people to get a personal hot wallet is that it is more secure than holding your currency in a crypto exchange.
Somewhat of a disadvantage, however, is that even though the wallet itself is free in most places you can access one, you have to pay for any transfer exchanges. To give an explanation of what that means; if you were to do any trades, or even to get the money from the exchange into your wallet, there is a fee.
Something else to note is that all fees vary depending on the amount of currency you are transferring.
Cold Wallets:
Cold wallets are your most secure option. They are the most reliable choice for keeping your bitcoins safe, which is a great advantage. They are physical hardware devices that you wire your computer to and download your bitcoin or other cryptocurrencies onto; they are not online like a hot wallet.
Cold wallets are much more difficult for hackers to get access to and therefore they keep your funds more secure. With these advantages, however, come a few disadvantages of cold wallets to take into consideration.
One disadvantage of a cold wallet is that the wallet itself is not free. These wallets can range from around $50-$250. If you are putting $100 into your bitcoin endeavors initially, it probably isn’t worth getting a cold wallet. If you are planning on doing more with cryptocurrency in the future, though, it might be something to look into.
The hardware device that acts as a cold wallet will also take some effort to install and learn how to install, as well as to learn how to transfer your funds onto the device.
Just like the hot wallet, you’ll have to pay for any transfer fees that you wish to make. Once again, all transfer fees vary depending on how much currency is being exchanged.
Your Money, Your Way
So, let’s review:
- You can buy $100 worth of bitcoin but they are separate currency forms, and therefore you cannot buy $100 of bitcoin.
- Bitcoin is its own currency form. You can convert dollars into it as an investment. The market fluctuates a lot so it has a chance of increasing in value as well as a risk of depreciating.
- You need to identify why you are investing $100 into bitcoin:
- Are you wanting to use it as a currency?
- Are you wanting to invest in it?
- Are you wanting to sell it eventually?
- You’ll need to choose your exchange, which is basically the platform where you will store your $100 worth of bitcoin. We recommend binance.us.
- You’ll need to select a place to store your cryptocurrency and a program for exchanging and investing in bitcoin. Your options include the following:
- The exchange of choice
- A hot wallet
- A cold wallet
