Buying Bitcoin Is Easier Than Ever. Read This Before Taking the Plunge

Looking to buy bitcoin, ether or other cryptocurrencies? Here's what to know.

During and after this year's Super Bowl, cryptocurrency ads have flooded TV screens. And with bitcoin attracting the attention of finance, art, seemingly unrelated businesses and politicians and regulators, investors are also looking for ways to get in on the action.

 If all this made you interested in buying bitcoin or any other cryptocurrency, take some time to learn the ropes first. The industry is complex, and you can lose money fast.

Though in recent years it's become much easier to invest in the industry, the long-term utility of bitcoin and its cohort of virtual tokens remains unproven. 

The largest cryptocurrencies by market cap have taken a nosedive since their peak in November 2021, underscoring the sharp volatility that's typical in cryptocurrency markets. Due to this unpredictability, here's a good rule of thumb: Don't invest more than you're ready to lose. 

While buying bitcoin today can be as simple as logging into PayPal, where you buy cryptocurrency makes a difference.

 Some exchanges charge higher fees than others, and not every company selling crypto will transfer the assets to a crypto wallet under your own control. Instead, the company could hold it for you -- which may or may not be something you want. 

Here's what to keep in mind before buying cryptocurrency for the first time.

Where can I buy bitcoin? The two buying options for beginners are crypto exchanges, such as Coinbase, or money apps, such as PayPal or Venmo.

 Exchanges require more know-how than money apps, but often charge lower fees and give you more control over your assets. If you don't want to take the time to learn about how to use a cryptocurrency exchange, you can just buy bitcoin on PayPal or Venmo. 

Cryptocurrency exchanges generally provide more options than a money app. For example, with exchanges like Coinbase and FTX US, you'll be able to choose between dozens of crypto assets.

 However, more isn't always better, as many of the lesser-known crypto assets are highly volatile and rife with scams. 

With money apps like PayPal and Venmo, you can choose to buy only a few cryptocurrencies, such as bitcoin and ether. These assets are definitely more acceptable investments in the arena of mainstream finance -- but remember that almost all crypto comes with significant risk.

When deciding between a money app and an exchange, consider the type of wallet that will store your cryptocurrency. Crypto wallets are kept secure through private keys -- usually a series of passwords.

 Money apps like PayPal generally keep your cryptocurrency in a "custodial" wallet, meaning the company controls the private keys that access it. Exchanges often let you move your crypto to your own "noncustodial" wallet, giving you more control over your assets.

Can I play the bitcoin market without buying bitcoin? The financial industry continues to search for ways to integrate crypto into conventional investments. If you want exposure to the cryptocurrency market without immediately buying bitcoin, you have a couple options. 

You can buy a bitcoin futures contract, which is an agreement to buy a set amount of bitcoin for a set price at a future date. You might also be able to buy into a few exchange-traded funds, or ETFs, that include bitcoin futures contracts. 

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