Bitcoin (BTC) is by far the largest cryptocurrency token in terms of market capitalization and value. There is even consistent speculation that one day, the token has the potential to even reach $100,000 or above throughout the following decade. With that in mind, for someone who has not been in the cryptocurrency industry at all, it might seem a bit intimidating to jump into it.
There is a question on every crypto investment beginner out there, and that question is, can you buy part of a bitcoin? To help newcomers solve this issue, we’ll go over just about everything they should know about buying, just a part of Bitcoin.
A Brief Overview of Bitcoin
Bitcoin is a digital currency, otherwise referred to as a cryptocurrency which is intended to allow users to pay for a service or product virtually. The currency initially made its debut in 2009 and broke into the mainstream in 2017 with its rapid increase in value throughout the year.
The BTC cryptocurrency tokens can be created or mined when computers, otherwise referred to as miners, contribute processing power and other resources as a means of solving cryptographic puzzles, where they essentially validate transactions that get recorded on the public ledger known as the blockchain network.
The blockchain is a huge public record of every transaction that has occurred within the network. The network monitors everything, which ensures that the currency’s integrity is in check. Each miner is spread out across the globe, and as such, this is a fully decentralized network where no one single entity can control or compromise it.
Buying a Part of a Bitcoin
The Bitcoin network is powered by BTC tokens, and the highest-ever recorded value of the BTC token was on November 10, 2021, when the token could be bought for $69,044.77. As of January 14, 2022, the token has a value of $42,957.99. That’s still a huge number, and as such, a lot of people could be intimidated by spending that much on a cryptocurrency token, especially if it is their first time buying crypto.
However, the beautiful part about the cryptocurrency sector is the fact that you do not have to buy Bitcoin as a whole but can buy shares of it. This is known as a fractional purchase of a BTC token.
Many cryptocurrency exchanges, or brokerages, will allow you to purchase fractional shares, and each of them will have its own minimums. This means that you can buy $20 worth of BTC, for example, which is a much better entry point within the world of crypto investing, especially for newcomers who might otherwise not feel as comfortable purchasing crypto at the start. This does not have to be limited to $20. However, you can spend as much as you want above that on most platforms.
How to Buy a Part of a Bitcoin
Let’s assume for a second that you are interested in buying Bitcoin (BTC) at a point in time where 1 BTC token is worth approximately $50,000. You have a budget of $1,000 to invest, and you decide to do so within the BTC cryptocurrency token. If you purchase it through fractional shares, you can use those $1,000 and get yourself 0.02 Bitcoin (BTC). Now, as the value of the BTC token increases as a whole, the value of your proportional share of that BTC token increases as well.
PayPal launched a specific service for buying cryptocurrencies and makes it extremely easy for users to buy or sell parts of Bitcoin using the same application. They have a $0.50 fee for trades less than $250, and from there, PayPal has a sliding commission scale that starts at 2.30% for trades over $25, which decreases to 1.50% for trades over $1,000. The main point of appeal here is that you can begin buying at just $1.
- Cryptocurrency Exchange
There are many exchanges out there that you can sign up for, all of which will provide you with specific means through which you can buy parts of a Bitcoin token. These can range from as low as $10 or $20, and you can make a deposit on most of these exchanges through e-wallets, credit cards, debit cards, or direct bank transfers. You can also use a Bitcoin OTC broker.
- Trading Application
There are also specific trading applications developed for both iOS and Android devices, which will allow you to purchase Bitcoin directly. Additionally, most of these apps will also allow you to buy stocks, ETFs, CFDs, and other options.
- Bitcoin ATM
Assuming that you live in a part of the world that provides you with access to Bitcoin ATMs, you can always use them as a means to directly buy a part of a BTC token with the usage of cash. All you need is a bitcoin wallet to make the transaction. However, this is one of the most expensive options as some ATMs might charge you up to 7% per transaction.
Buying Part of a Bitcoin is Easier than It Seems
Once you evaluate the upsides, downsides, costs, and security of each method and make your selection, you will realize that buying Bitcoin through fractional shares, or in other words, buying a part of a BTC token, is actually quite easy. Of course, things can get more complicated when you start asking “what time do Bitcoin options expire?” but that’s a more advanced problem.
While the price of Bitcoin can increase in value quickly, always remember that it also carries a high level of risk. Make sure to initially make conservative investments and only use the money you can afford to lose. Bitcoin has shown significant signs of growth throughout the past few years, but there is never any guarantee that this is a trend that will go on forever.