Buy Bitcoin? Bitcoin (BTC) is today by far the world’s largest and most popular and well-known cryptocurrency.
During 2020, the Bitcoin price was extremely volatile.
The price of Bitcoin continued to accelerate and reached several new all-time highs during 2021, and the Bitcoin price is today (14 December 2021) trading at around USD 48,000.
At its peak in 2021, the Bitcoin price reached as high as USD 69,000, so it looks like we’re in for yet another very interesting year with respect to the development of cryptocurrencies…
In this article, you can read how to buy Bitcoin without the use of complicated solutions.
Why invest and buy Bitcoin (BTC)?
There are many reasons to buy Bitcoin:
- The price of Bitcoin is very volatile
- The Crypto currency market is young and undeveloped
- Bitcoin is by far the largest of all cryptocurrencies
- Very many are expecting a massive increase in the Bitcoin price.
- Could Bitcoin be a new “safe haven”…?
There are many ways in which you can invest in, -and buy Bitcoin
Your best choice of method is dependent on what your purpose of buying Bitcoin is.
In this article, you can read all about how you can buy Bitcoin for both investment purposes and, -or for trading purposes.
We are not going to elaborate upon how you can buy Bitcoin as a means of payment for goods and services as this in practice is to a very little degree applicable to the vast majority of those buying Bitcoin.
How to buy and actively trade Bitcoin?
If you want to buy and/or actively trade Bitcoin, we recommend the Nordic fin-tech broker Skilling.
With this easy-to-use Scandinavian broker, you can buy Bitcoin and more than 35 other cryptocurrencies in the shape of CFDs.
Using CFDs as your cryptocurrency investment vehicle is easy, safe, and extremely flexible.
Skilling offers lightning-fast registration and funding of your account so that you will be able to buy Bitcoin almost instantly.
You can both buy and, -or short sell Bitcoin more than 35 other popular cryptocurrencies with Skilling.
Short selling Bitcoin means that you will profit from the price of Bitcoin falling.
Further, you can also take advantage of leveraging your Bitcoin investments up to 2 times, meaning you’ll only have to provide 50 % of the equity to buy or short sell Bitcoin.
Skilling also offers 5x leverage when buying Bitcoin and other cryptocurrencies if you make use of their so-called ‘non-EU account’.
In practice, this is pretty much the same as an EU account, but the allowed leverage is higher as there are other rules and regulations that apply outside the EU.
To open a non-EU account all you must do is to select the FSA as the supervisory authority upon opening the account, -or use this link directly.
Buy other cryptos at Skilling
Skilling is probably the CFD broker that offers the most tradable cryptocurrencies in their multitude of trading platforms.
In addition to buying Bitcoin, you can also trade all of the most popular cryptocurrencies such as;
Ethereum, Ripple, Litecoin, Chainlink, EOS, IOTA, NEO, Monero, Dogecoin, VeChain, Stellar, Bitcoin Cash SV, Uniswap, Tron, Cardano, Aave, Theta, Polkadot, Link and BitcoinMini, Terra, Solana, Tezos, BinanceCoin, Chiliz, ETHBTC, DASH, and Shiba Inu and many more.
Skilling is making new cryptocurrencies available in their trading platforms on an ongoing basis.
Here you can have a look at our comprehensive Skilling Review.
To buy Bitcoin at Skilling:
Step 1: Register your account with Skilling
Step 2: Make a deposit to your Skilling account
Bank cards and bank transfer are mostly used, but Skilling offers very many methods of payment so that everyone typically will use whatever is most suitable for themselves.
Step 3: Select Bitcoin (BTC) in the trading platform and you are ready to buy Bitcoin
Upon trading with Skilling you do not need a so-called crypto wallet to invest and buy Bitcoin or any other cryptocurrencies.
What is Bitcoin?
In short; Bitcoin is a cryptocurrency (also often referred to as a digital currency) that enables transactions between two parties without an official intermediary such as banks and other financial institutions.
All transactions carried out using Bitcoin are documented in a blockchain that is available to the public.
The blockchain can be seen as a kind of digital ledger where all transactions are logged.
The blockchain is anonymous unless you know who owns the actual Bitcoin addresses to were Bitcoins are sent and received.
Unfortunately, the anonymity offered by Bitcoin and many other cryptocurrencies has made Bitcoin quite popular among criminals…
The video below provides a brief explanation of how Bitcoin works:
What influences the price of Bitcoin?
There are many factors that influence the Bitcoin price.
Fundamentally, the price of Bitcoin increases when there are more buyers of Bitcoin than sellers of Bitcoin.
As there is no government backing of any sort to support the Bitcoin currency, it all comes down to the ratio between supply and demand.
As more and more people adopt various Bitcoin payment solutions and as the cryptocurrency achieves a somewhat more generic day-to-day usability it is likely that the demand may again supersede the offerings of Bitcoin causing the Bitcoin price to follow suit.
In addition, the price of Bitcoin will often rise if / when larger institutional investors choose to buy Bitcoin.
This typically as they tend to hold Bitcoin more as a long-term investment, rather than trading it in a more short-term perspective.
As the supply of Bitcoin is limited to around 21 000 000 Bitcoins, effectively taking larger chunks of Bitcoin out of circulation this way will naturally have a positive effect on the Bitcoin price.
Bitcoin and institutional FOMO
The recent upturn in the Bitcoin price can also very much be linked to so-called Institutional FOMO (Fear of missing out).
This is manifested by a large number of professional investors that lately have chosen to buy Bitcoin in fear of missing out of a potential further rise in the Bitcoin price..
MassMutual Buying Bitcoin
On December 10th, 2020, The Wall Street Journal, among others, wrote that the American insurance company MassMutual had bought Bitcoin for USD 100 million.
MassMutual choosing to buy Bitcoin at that time sent the Bitcoin price up to around USD 18 000 shortly after.
Tesla Buying USD 1,5 billion worth of Bitcoin
On February 9th, 2021, Tesla announced that the car company had bought Bitcoin for approximately USD 1,5 billion.
This news story quickly led Bitcoin’s price to its (then) all-time highest at just more than USD 63,000.
The Bitcoin’s price has as we know later reached an all-time high of USD 69,000.
First Bitcoin ETF launched on the New York Stock Exchange!
On October 19th, 2021, the world’s first Bitcoin ETF (Exchange traded fund) was opened for trading on the New York Stock Exchange.
Exchange traded funds typically track the performance of indices, such as the S&P 500, or a sector (such as health or technology), and -or commodities such as silver, gold or oil.
Anyway. The first Bitcoin ETF became a reality!
The ETF, which has been given the ticker BITO, will mirror developments in the Bitcoin price (BTCUSD) based on the price of the Bitcoin future contracts traded on the Chicago Mercantile Exchange (CME).
The Bitcoin ETF will thus mirror the price development in Bitcoin futures, and it’s the first Bitcoin future that the SEC (U.S. Securities and Exchange Commission) allowe to trade in this heavily regulated market.
So, what does it mean that the SEC now allows Bitcoin ETFs to be listed and traded on the New York Stock Exchange?
Futures contracts, which are commonly referred to as Futures, are in practice agreements to buy or sell an asset sometime in the future at a before pre-agreed upon price.
In this case, it is this future price of Bitcoin (BTC) that makes up the grounds for this speculative ETF.
A great milestone for cryptocurrency!
The launch of this Bitcoin ETF is nothing more than a major milestone for the crypto industry, and for Bitcoin in particular…
By being formally accepted into the trading community, and this way gain access and acceptance in this strictly regulated market, Bitcoin has taken what must be considered as nothing less than a leap-frogging step on the road to further formal and informal acceptance…
Today, approximately 14 % of Americans hold cryptocurrency (this is mostly men with relatively high income), and with the availability of Bitcoin futures we believe that Bitcoin now have become much more accessible to a type of customers who may not have invested or considered cryptocurrency as an investment before this.
Bitcoin exposure, minus Bitcoin….
A Bitcoin ETF gives investors exposure to the price movements of Bitcoin without having to physically take delivery of the cryptocurrency itself.
In other words, you don’t need a Bitcoin wallet, just like with CFD trading Bitcoin and, -or other cryptocurrencies today.
A Regulated Option…
The fact that Bitcoin futures are now traded on a regulated exchange will surely cause more investors to invest, or at least consider this type of investment in Bitcoin in the future.
The Bitcoin ETF, and future cryptocurrency ETFs will provide investors with regular brokerage accounts access to Bitcoin ETFs without having to buy Bitcoin using a so-called crypto-wallet.
Apparently, it is another 3 Bitcoin ETFs to be allowed for public trading shortly, so we can clearly expect to hear more about these Bitcoin investment vehicles and those wanting to buy Bitcoin using these soon.
Yet another very interesting ‘crypto-autumn’ in store…?
Bitcoin ETF vs Bitcoin CFD
In practice, what will be the difference for clients?
Since this is a Bitcoin ETF traded on the New York Stock Exchange, it will typically only be open for trading during exchange opening hours (8 hours a day).
Furthermore, the Bitcoin ETF mirrors the future price of Bitcoin which can deviate a good deal from the current Bitcoin (spot) price at any given time.
For clients who are concerned with the security that it provides trading Bitcoin and other cryptocurrencies in a regulated and licensed environment, and not are comfortable with the uncertainty of crypto-wallets, today’s regulated CFD trading will probably still be far preferable to the vast majority…
Also, using CFDs to buy Bitcoin you will be able to trade 24/7 at the actual Bitcoin price, not the derived price of Bitcoin futures as in the Bitcoin ETFs.
Why did Tesla buy Bitcoin for $13 billion…?
On February 9th, 2021, the news broke that Tesla had chosen to buy Bitcoin with worth of approximately USD 1.5 billion.
This news accelerated the Bitcoin price at the time which at its highest right after this press release was published reached just over USD 48,000.
Was this a case of Elon Musk and Tesla really investing seriously in Bitcoin?
Tesla at the same time announced that they were considering allowing car buyers pay for their cars in Bitcoin.
But if this was the case, – why would Tesla buy Bitcoin?
Was this to have some Bitcoin change lying around….?
It is of course very possible that Tesla are both brave and innovative enough to think in these terms…
But in this case, we have more faith in this being a very well-staged cover up
Bitcoin is about having faith in faith itself……
On Friday, 8th of January 2021, Bitcoin’s price peaked at about USD 42,000.
While Bitcoin’s price on Monday 11th of January, – a mere 3 days later was down to USD 30,342 at its lowest
Bitcoin price had a drop in value of almost 28 percent in just 3 days!
This certainly shows how volatile the Bitcoin price development has been and should be a good reminder of what price fluctuations to expect when you buy Bitcoin.
It is also very interesting to observe the way Bitcoin has changed the structure from what was the stated original concept to the anonymous creator;
(The pseudonym Satoshi Nakamoto), which explained the purpose of the Bitcoin cryptocurrency as follows;
“What is needed is an electronic payment system based on cryptographic verification rather than trust, which allows two willing parties to conduct a transaction directly among themselves without the need for a third party they trust.”
Nowadays, it seems that most people do not think of Bitcoin as an actual payment solution when they choose to buy Bitcoin.
In practice, it is not decentralized cryptographic payment transactions that are highlighted with those who buy Bitcoin today
It is the actual investment in Bitcoin and the belief of Bitcoin appreciating in value that is the most common factor.
Bitcoin & Gold
Today, Bitcoin is also being compared to gold to a much larger extent, and also as an alternative investment to equities and bonds…
The logic behind this is that Bitcoin is constructed so that at most only 21 million Bitcoins can be produced.
Hence, Bitcoin in this way is a bit comparable with gold, – of which there is also (by all accounts) only a limited amount available.
But that logic isn’t just straightforward to acknowledge.
Even though there is only a limited amount of Bitcoin, there are more than 15,000 other cryptocurrencies, and in theory it is also possible to create an infinite number of new cryptocurrencies going forward…
In other words, enough people must persistently believe that it is precisely Bitcoin, and only Bitcoin that ‘is the new digital gold’ in order for Bitcoin to remain as the ‘gold standard’ of cryptocurrencies.
When the Bitcoin price rose in value from around USD 5,000 in March last year (2020) to more than USD 40,000 in January 2021, this can easily be interpreted as, -or misinterpreted for that matter as Bitcoin now being the ‘one chosen cryptocurrency to achieve this digital gold status’.
Hence, when you buy Bitcoin, it is therefore very much also about having faith in that enough others also believe that Bitcoin is the ‘chosen cryptocurrency’ and therefore also go on to buy Bitcoin, and that this ‘loop’ will be able to maintain (and increase) the long term Bitcoin price.
Almost every day lately we have been able to read about how many people choose to compare buying Bitcoin to buying gold (‘digital gold’), and then often as a hedge against inflation and todays massive printing of money (quantitative easing and the likes thereof)
However, this is not an argument we buy unconditionally.
The Bitcoin price does not correlate significantly with the development in the gold price, and if one is to actually compare the Bitcoin price this way, it would have made more sense to have a look at the price of copper…
Copper is commonly known as a “risk-on” commodity that typically increases in value as generic market risk willingness is high (such as with Bitcoin).
It has therefore often been stated that copper is the only commodity that has both a Ph.D., -and a black belt in market economics…
Bitcoin and regulation?
There is currently not much that indicates that the increase in the Bitcoin price has peaked out.
For that to be the case, perhaps more strict governmental regulations need to be put in place, and that we then will see how well the Bitcoin price is able to cope…
Before actual regulations are enforced it seems somewhat naive to believe that Bitcoin, or any other cryptocurrency for that matter, will be able to take the massive leap into being commonly accepted, and used as an everyday means of payment.
If the Bitcoin price developments is mainly driven by the ‘speculative greed’ of non-professional investors, and as long as this has no real impact on current payment services, savings and/or the traditional storage of values (gold), it seems that most authorities still do not care too much.
More recent Bitcoin purchases from institutional investors, and large publicly traded companies that also buy Bitcoin will perhaps be harder for regulators to swallow…
But this won’t necessarily continue…
We all remember the outcome with Libra (Facebook’s own cryptocurrency), –it was rapidly shut down by the regulatory authorities as it was seen as an actual threat against today’s government-backed monetary system(s).
Risks of Buying Bitcoin?
Cryptocurrencies in general are very volatile and are not regulated by any supervisory authority.
Hence, to buy Bitcoin or any other cryptocurrency will entail a high level of risk.
If you want to buy Bitcoin, you must be prepared to withstand relatively large fluctuations in the Bitcoin price. For example, it is not uncommon for Bitcoin prices to fluctuate as much as 10+ percent during a single day…
Do I have to pay taxes on Bitcoin winnings?
Yes. When you buy Bitcoin, and make profits from holding Bitcoin and, -or other cryptocurrencies this is usually taxable, and you should consult your local tax authorities to ensure yourself that you report your capital gains correctly.