Cryptocurrency & Bitcoin

Cryptocurrencies like Bitcoin and digital assets like NFTs are new ways to invest. Learn how cryptocurrencies work and what you need to invest in them.

Frequently Asked Questions

  • How to buy cryptocurrency?

    Once you’ve decided to buy cryptocurrency, you need an account with an exchange, such as Coinbase, that supports that token. The next step is to verify your account and connect it to a payment method like cash, Paypal or even credit cards. You’ll need a crypto wallet, a storage for your keys or crypto passwords, compatible with the token you’re buying. Once you have all those, just place an order.

  • How to invest in bitcoin?

    There are many ways to invest in Bitcoin (BTC). You could buy the cryptocurrency on an exchange. You could consider bitcoin mining to earn BTC as a reward. While no Bitcoin ETFs exist you could consider investing indirectly through ETF-like funds such as the Grayscale Bitcoin Trust and the Bitwise 10 Crypto Index Fund. These may require investment minimums as high as $25,000.

  • How does bitcoin work?

    Bitcoin (BTC) is powered by blockchain technology, which is a ledger that records every transaction. To transact BTC, you need a wallet that has an address. You can send, receive or buy BTC using this address. Every time a Bitcoin transaction occurs, the transaction is verified by miners and recorded. This prevents fraud and double use of the same BTCs.

  • What is bitcoin mining?

    Every bitcoin (BTC) transaction is broadcast on the network and is required to be verified. Computers around the world compete to verify BTC transactions by solving, in the simplest terms, complex mathematical problems. This process is called mining. Miners first to verify a group of transactions are rewarded with BTC. But bitcoin mining requires specialized equipment and consumes a lot of energy.

  • How much is bitcoin worth?

    Just like stocks Bitcoin’s price fluctuates on exchanges based on supply and demand. BTC price is highly volatile and is partly also driven by a limited supply of 21 million BTC. However, there is some debate if BTC, despite high prices, has value. Skeptics believe it doesn’t as it does not meet value requirements that other currencies or assets do, while BTC supporters disagree.

  • How is cryptocurrency taxed?

    For tax purposes, the IRS has ruled that Bitcoin and other virtual currencies be treated as property not currency. That means, not only will you be liable to pay capital gains tax on any profit from the sale of cryptocurrency, but also if you use your crypto to buy goods and services. You will also need to report it as income if you receive crypto in exchange for goods or services. If you meet the threshold, you may also face a 3.8% net investment income tax

  • Which cryptocurrency should I invest in?

    There are more than 9,500 cryptocurrencies. Bitcoin is the oldest cryptocurrency and has the highest market cap. While the market cap may give you some idea of the reputation of the crypto, it may see big swings with price volatility. It also tells you nothing of the underlying technology or governance. Start by reading the crypto’s whitepaper to understand how it works better and watch out for executive or regulatory actions.

  • What can you buy with cryptocurrency?

    Adoption of cryptocurrency as a medium exchange is picking up. A number of retailers such as Overstock and Newegg accept Bitcoin as payment, and so do many stores on Etsy. You could also use payment networks such as PayPal, Flexa. PayPal converts your crypto to U.S. dollars so it may be used at merchants who don’t otherwise accept crypto. Shopping with crypto may not be that hard but remember spending cryptocurrency can trigger a tax liability.

Key Terms

A stablecoin owner makes a trade.
Stablecoin
Young man sitting on living room floor working on laptop
What You Need To Know About Litecoin (LTC)
Person in yellow sweatshirt using a mobile device
What You Need To Know About Ether (ETH)
FTX Review
FTX Review
How Does a Blockchain Work?
What Is Blockchain?
Professional busy working on laptop computer at office.
How Is Bitcoin Valued?
An investor makes a crypto purchase.
What Are the Laws for Cryptocurrency?
Person working on a laptop
What Is Etherscan and How Do You Use It?
eToro
eToro Review
Image shows a woman putting bitcoins in her wallet. Next to her is her computer  where she is making a purchase; indicating she was online shopping with bitcoins. Above the computer are the logos for Coinbase, Trezor, and Robinhood
Best Bitcoin Wallets of 2022
Young woman wearing spectacles working on her laptop
Non Fungible Tokens (NFTs)
Crypto.com Review
Crypto.com Review
Binance Review
Binance Review
Person using mobile device on an urban rooftop
What You Need To Know About Solana
Person standing over a laptop wearing a striped dress
Ethereum vs. Bitcoin: How Do ETH and BTC Compare?
Coinbase Review
Coinbase Review
Man with laptop uses earbuds and cellphone in cafe
Monero (XMR) Explained
KuCoin
KuCoin Review
Block Fi
BlockFi Review
A man looks at his cryptocurrency wallet
Proof of Stake (PoS)
Person looking away while holding a mobile device
What You Need To Know About Elrond
Man talking on phone with a laptop in his lap
What You Need to Know About Zcash
Largest Professional Bitcoin Exchange is Coinbase Pro
Person smiling and looking at a smartphone
What You Need To Know About Polkadot
Woman reading folder at desk in living room
The Best Bitcoin IRA Companies of 2022
Person using mobile device in front of a tall building
Cryptocurrency Wallet
Person working on a laptop
What You Need To Know About DigiByte
BitMart Review
BitMart Review
Woman working on laptop
What You Need To Know About Hedera (HBAR)
Couple sitting on couch using laptop
What You Need To Know About Cardano (ADA)
Woman working on laptop
What You Need to Know About Chainlink (LINK)
Woman sitting on couch with laptop open
Which Cryptocurrency Should You Invest In?
Poloniex Review
Poloniex Review
Kraken Review
Kraken Review
A woman looks at her phone.
What You Need To Know About Neo Coin
A man claps with joy at an image displayed on his laptop screen.
Meme Coin
Person looking at data on a large computer monitor
Smart Contracts
CEX.IO
CEX.IO Review
Woman working on laptop.
Gwei
Uphold Review
Uphold Review
Young Asian businesswoman checking financial stock market analysis with mobile app on smartphone
Trezor vs. Ledger: How Do They Compare?
how to start investing in bitcoin: open a cryptocurrency exchange account, make your first transaction by entering the amount of Bitcoin (BTC) you wish to purchase in your exchange's trading tool, to buy bitcoin using a third party, you can take advantage of a growing number of alternative investment options
How To Invest in Bitcoin
 Person using laptop while holding a pen
Dogecoin vs. Bitcoin: How Do They Compare?
Coinmama
Coinmama Review
Woman sitting on couch with dog, working on laptop
What You Need To Know About USD Coin (USDC)
Bittrex
Bittrex Review
Young Woman Using Stock Trading App On Smart Phone At Cafe
Coinbase vs. Coinbase Pro: How do they compare?
Gemini Review
Gemini Review
Person using a laptop while sipping a drink
Cryptocurrency Airdrop
Binance.us
Binance.us Review
Man and woman sitting on a sofa working on a laptop
What You Need to Know About Dash Coin
Person using smartphone by a pool
How to Use Bitcoin
Person wearing headphones using multiple computers
How Does Bitcoin Work?
Bitfinex Review
Bitfinex Review
OKX logo
OKX Review
Person on a phone while sitting in front of a laptop
Central Bank Digital Currency
Woman working on laptop
What You Need To Know About Tether
Man working on his laptop
Investing in NFTs: Is It Worth It?
An young investor looks over her portfolio.
Should You Invest in Stocks or Bitcoin?
Woman typing on laptop at desk.
What You Need To Know About EOS
 
 
 
 

More in Trading: