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Buying bitcoin or other cryptocurrencies can be a fun way to explore an experimental new investment. But it’s also true that any investment in cryptocurrency should carry a warning label like cigarettes: “This product may be harmful to the health of your finances. Never buy more than you can afford to lose.”
The value of Bitcoin — — has risen from $3,237 in December 2018 and is now breaking new record highs (see price below). Like all cryptocurrencies, bitcoin is experimental and subject to much more volatility than many tried-and-true investments, such as stocks, bonds and mutual funds.
One rule of thumb is to invest no more than 10% of your portfolio in individual stocks or risky assets like bitcoin. If you're new to investing, find out more about .
The spot price for Bitcoin broke $50,000 for the first time on Feb. 16, 2021. Here's the price in U.S. dollars to buy one bitcoin today:
Data is pulled from Google Finance and may be delayed up to 20 minutes. Information is solely for informational purposes and not for trading purposes or advice.
» Ready to invest?
There are a few different ways to buy bitcoin and other cryptocurrencies, including exchanges and traditional brokers.
You can purchase bitcoin from several cryptocurrency exchanges. Many charge a percentage of the purchase price. Do your due diligence to find the right one for you. Some of the more popular exchanges include:
» Learn more:
The choices among traditional brokers that give customers a way to buy and sell bitcoin are few right now — was the first mainstream investment broker to offer bitcoin (Robinhood Crypto is available in most, but not all, U.S. states). Like its stock-trading platform, Robinhood charges no fees for bitcoin trades. TradeStation also offers crypto trading, including bitcoin, as does — which also features a unique social trading platform, allowing users to match the moves of popular traders.
Other brokers have announced plans to offer cryptocurrency trading in the near future.
Have information you may need handy. Setting up a cryptocurrency account takes minutes, but you'll need to provide some information, including your Social Security number and the number to your bank account, debit card or credit card to fund your bitcoin account. Some providers also may require you to have a picture ID. Record and safeguard any new passwords for your crypto account or digital wallet (more on those below).
Don’t use a credit card. Although some providers allow you to purchase bitcoin by credit card, making investments by borrowing from a high-interest product like a credit card is never a good idea.
» Learn more:
Bitcoin and other cryptocurrency investments are for exchange failures or theft, a protection that traditional stock brokerage accounts enjoy up to $500,000. Some exchanges like Coinbase provide private insurance, but that doesn’t protect against individual online breaches like someone stealing your password.
Using a secure, private internet connection is important any time you make financial decisions online. Buying bitcoin while at the coffee shop, in your hotel room or using other public internet connections is not advised.
» Dive deeper:
Bitcoins can be stored in two kinds of digital wallets: a hot wallet or a cold wallet. With a hot wallet, transactions generally are faster, while a cold wallet often incorporates extra security steps that help to keep your assets safe but also take longer.
With a hot wallet, bitcoin is stored by a trusted exchange or provider in the cloud and accessed through an app or computer browser on the internet. Any trading exchange you join will offer a free bitcoin hot wallet where your purchases will automatically be stored. But many users prefer to transfer and store their bitcoin with a third-party hot wallet provider, also typically free to download and use.
Why choose a wallet from a provider other than an exchange? While advocates say the blockchain technology behind bitcoin is even more secure than traditional electronic money transfers, bitcoin hot wallets are an attractive target for hackers. As : “Many exchanges and online wallets suffered from security breaches in the past and such services generally still do not provide enough insurance and security to be used to store money like a bank.”
There are many hot wallet providers, offering a range of wallet types. Here are a few:
Although some hot wallet providers offer insurance for large-scale hack attacks, that insurance may not cover one-off cases of unauthorized access to your account.
» Learn more:
A cold wallet is a small, encrypted portable device that allows you to download and carry your bitcoin. Cold wallets can cost as much as $100 but are considered much more secure than hot wallets.
Cold wallet providers include:
When creating accounts for your digital wallets and currency exchange, use a strong password and two-factor authentication.
After linking your bitcoin wallet to the bitcoin exchange of your choice, the last step is the easiest — deciding how much bitcoin you want to buy. While bitcoin made news in January by cresting past $40,000 for the first time, bitcoin (trading symbol BTC or XBT) can be bought and sold for fractional shares, so your initial investment could be as low as, say, $25.
If you like the idea of , one option is to buy bitcoin now and then sell it if and when its value moves higher. But if you see a future for bitcoin as a digital currency, perhaps your investment plan is to buy and hold for the long haul.
Whatever your plan, know that .
Bitcoin is an incredibly speculative and volatile buy. Stock trading can give you a similar thrill — and picking stocks of established companies is generally less risky than investing in bitcoin.
» Beyond Bitcoin:
Of the online brokerages and cryptocurrency exchanges that NerdWallet reviews, the following currently offer bitcoin.
* These providers are NerdWallet advertising partners.