If you’re new to cryptocurrency, you may be curious about how much is a good amount to invest in bitcoin, especially for your first time. It can be nerve-racking to invest a large portion of your savings into it, but investing a small sum of money may seem like it isn’t worth it. Luckily, we’ll answer your questions on how much bitcoin you should buy and why you should invest that much.
The best starting investment for first-time buyers of bitcoin is between $5 and $10. This way, they can see how the digital wallet works and gain an understanding of how bitcoin values fluctuate over time and determine if making a larger investment is worth it.
To learn how you can buy bitcoin and more about how that process works, as well as why you should invest a small sum of money first, continue reading.
Why You Should Start Out Small
When you buy bitcoin for the first time, we recommend starting out small, investing about $5 to $10, or between 5% and 15% of your investment capital. Your investment capital is how much of your budget you set aside for investing into your future self, such as your retirement or your life savings. This is not to say you should invest 15% of what you’ve already saved throughout your life, but rather, you should invest a percentage of your income that you set aside each month to go toward your future self, starting with your next paycheck.
That small percentage or that $5 to $10 will help you to better understand how investing in bitcoin works before you commit to investing a larger sum of money. This will give you an idea of how your digital wallet will work and how that invested money can change in value over time so that you can better make a decision of whether or not investing a larger sum of money will be worth it. Investing a small amount is also good because it doesn’t take too much of a blow to your paycheck, but rather a small dent, an amount equivalent to that which you would probably use to buy a coffee or something for lunch.
Many people will start out investing small because it’s less of a risk and it helps them get the hang of the process of buying bitcoin. This way, they can be more prepared when they do decide to invest a larger amount of money in bitcoin. Once they see how it works and decide that they want to keep investing in bitcoin, they can try again by investing a large amount of money.
After You’ve Invested Small, Divide Your Next Investment Budget
Once you’ve decided that investing in bitcoin is something you want to continue doing after seeing all the ins and outs of it firsthand, you can now invest a larger sum of money. We recommend putting about $100 toward your second investment. This way, you’re not taking a big chunk of your paycheck, it’s less of a risk than $1000, and it’s still enough to accumulate and increase in value over time, so long as the crypto market goes up.
You’ll probably want to pay attention to the bitcoin price market summary graphs to determine the ideal time to invest, keeping in mind that fluctuations in value can be unpredictable, but generally follow the patterns on the graphs.
If you want to invest an amount of money that is 15% to 30% or more of your investment capital, we recommend dividing that money and investing portions of it over time. For example, if you want to invest $1000, we recommend dividing that amount into 3 months, investing $400 per month rather than $1000 all at once.
You can also divide this amount into 10 months, investing $100 per month instead, or you can invest a larger portion of your money into bitcoin over a longer span of time. This will help prevent you from investing too much all at once. How much you decide to invest and how you want to divide that up so that you’re not investing all of it at once is up to you. Just be mindful of how much you would be willing or not willing to lose all at once, similarly to how one would approach gambling.
The Best Method of Buying Bitcoin for Beginners
To buy bitcoin for the first time, we recommend using a cryptocurrency exchange website. These are digital marketplaces where you can buy and exchange cryptocurrency using U.S. dollars or another government currency.
Many offer bitcoin, which can be bought with fiat money or with other digital currency, using a credit card, wire transfer, or a digital wallet. Some cryptocurrency exchanges, such as Binance and Coinbase, allow cryptocurrency withdrawals to cryptocurrency wallets, while others do not.
Those that do not allow cryptocurrency withdrawals to cryptocurrency wallets include Robinhood and eToro. Many of these cryptocurrency exchanges will send the account holder a prepaid debit-like card that holds those funds and can be used to withdraw those funds at various ATMs around the world.
Click here to become a member the world's largest bitcoin exchange Binance.
We recommend you try Binance.US, which you can use to buy, sell, and trade over 130 different cryptocurrencies, including bitcoin. While many other cryptocurrency exchange companies require high fees for trading, Binance charges very low fees in comparison, which is great for new investors who only want to try out the bitcoin buying and trading process without sacrificing more money than necessary. It’s also great for new investors because you can set up an investment schedule, in which a set amount will automatically be taken out of your account as frequently as you set it up and invested directly into your preferred cryptocurrency, such as bitcoin.
You can also keep track of your balances, increases and decreases, transaction history, and more in your digital wallet and portfolio, which you can view on the Binance site after you’ve created an account. Binance also has a mobile app for even easier tracking, buying, selling, and trading of cryptocurrency.
Some other cryptocurrency exchanges we would also like to recommend include these reputable companies: Kucoin, Gate.io, Gemini, Coinbase, Kraken, Robinhood, Webull, and Public. We recommend looking into these companies and what services they offer and how much their trading fees will cost.
Things to Consider Before Choosing How Much Money to Invest
Before investing in bitcoin, we would suggest you research how bitcoin works through websites and digital videos that help to explain the basics of bitcoin. This way, you can have a greater understanding of bitcoin itself as well as how it fluctuates in value over time, providing you with a better assessment of whether it will or will not be worth it regarding your personal financial situation. Regardless of where you get information about bitcoin, it’s important to know that investing in bitcoin is a risk.
There’s only a slight chance that things will turn out great and that you’ll earn significantly way more than what you put into it, or you could earn none of the money you invested back or even break even.
Similarly to how you might go into the casino to spend money, you should go into your bitcoin investment with the expectation that whatever you spend, you are going to lose, and that there is only a small chance that you’ll earn more than what you spend. Many experienced bitcoin investors recommend that you should only invest however much money you’re willing to lose. If you go into it expecting that you’ll turn a profit from what you spend, you’ll likely wind up disappointed that it doesn’t bring you as much profit as you expect.
Because cryptocurrency as a whole is unstable and could be banned by our government at any time, all cryptocurrency value could become obsolete. Otherwise, if it continues to live, you may have $10,000 worth of bitcoin one year, and then only $1,000 the next year.
What’s a Good Amount of Money to Invest?
You don’t have to break the bank to make a good investment in bitcoin. Many people think that the more money you put in, the more you’re going to get back in the future, but as long as you have patience, your investment can go a long way and bring you a lot of profit if you invest as little as $100. If you invest a small amount of money that is still a good chunk of your paycheck, it’s still going to be a bit of a sacrifice that is more likely to have a greater payoff in the future, but it’s not going to be too much of a sacrifice that you have to go without other important investments.
You can also choose to donate this amount once per month or once every paycheck so that the amount accumulates over time and thus you’ll be more likely to receive an even greater return on investment.
$100 is a good amount of money to spend on bitcoin because those who bought $100 worth of bitcoin in 2013, which was enough for 1.47 BTC at the time, were able to see that cost accumulate to $101,500 over time and then back down to about $32,582 in 2022. Those who invested this much back in 2013 probably had no idea that 9 years later their $100 investment would be worth 320 times that amount.
Some Risks and Rewards of Buying Bitcoin
We’ve talked about how buying bitcoin is risky and how you should only consider investing an amount of money that you’re willing to lose completely. But there are some other risks to consider, which as that you may invest in bitcoin at the wrong time.
Timing is everything when you choose to invest, so make sure you choose an ideal time to buy bitcoin: when the global market chart is close to an all-time high. Remember that the market repeats its pattern on a 1 to 2-year cycle. You can look at last year’s graph and compare it to this year and choose a time of the year when it’s about to experience an all-time high. If you’ve never invested in bitcoin before, we suggest that any time of the year is a good time to invest $5 to $10.
You may also want to look at the price surge timeline for the previous 9 years. You can find a total cryptocurrency market cap, which includes bitcoin, and see where the price surge is projected in the next couple of years, considering that price surges follow a 1 to 2-year pattern.
You can also view a bitcoin dominance chart on this webpage, which will show you price surges in bitcoin compared to other cryptocurrencies, and find a good time to invest when bitcoin prices are significantly higher than others. Keep in mind that some years are worse than others when it comes to bitcoin prices.
For example, in 2022, the price of bitcoin plunged down to 52% of the value it was last year, which was more than most previous plummets in price.
Even with the risk of losing your money or not investing at an ideal time, which can have a huge impact on your profits, there are many reasons why people choose to invest in bitcoin. The main reason is that the reward can often significantly outweigh the cost or the sacrifice.
You often hear about how bitcoin price surges are doing when they are at their highs, and you’ve probably heard countless stories of people tripling or quadrupling their money by investing in bitcoin. This is why many people choose to invest their own money, as there is a small chance you’ll hit the lottery (or at least a small jackpot) with bitcoin.
It also has a strong community on online forums where people discuss all the ins and outs of bitcoin and cryptocurrency. Many people invest simply because of this community and because it makes for an interesting hobby, especially because the bitcoin market is constantly changing and evolving.
People also love to think about what they would do if they become rich off of bitcoin. Would they buy a brand-new car or put it all in their retirement savings? Rent a larger apartment or pay off their student loans? Investing in bitcoin, despite the risk, can add a bit of excitement to life.