I Bought My First Bitcoin. Here Are 3 Surprising Things I Learned
You learn something new every day -- and every trade.
- Crypto requires a separate investment account.
- New account bonuses can mean free Bitcoin.
- Buying and selling Bitcoin often comes with a fee.
I've been in the financial world for many years, writing about everything from credit cards and loans to budgeting and retirement. But, while I've done a fair bit of writing about the topic of cryptocurrency, I only recently took the plunge and bought my first Bitcoin.
Alright -- given the current per-coin price, I didn't buy a full Bitcoin. I bought a small fraction of a coin. My goal isn't to get rich on crypto -- though that would certainly be lovely -- but to get a better feel for how crypto trading works.
The whole process, while simple, was educational. I learned several things that I wouldn't have necessarily discovered without going through the process. Here are three surprising things I learned about buying Bitcoin.
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1. You need a separate account for your crypto
In retrospect, this one seems kind of obvious. But before I started trading crypto myself, it had never really sunk in.
When you trade stock, you deal with two types of accounts: retirement accounts -- think IRA and 401(k) -- and standard investment accounts. But neither of these account types can trade crypto.
Basically, that's because crypto isn't a part of the regular stock exchange. So, to trade crypto, you open a dedicated account with a cryptocurrency broker. In my case, I used SoFi to make my Bitcoin purchase. I opened a SoFi Invest account, then a SoFi Crypto account.
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2. You may get free Bitcoin with a new account bonus
Credit cards have had sign-up bonuses for years, as have bank accounts. Even regular investment accounts can come with sign-up bonuses. So it should have been my first thought when I opened a crypto account. Instead, it was a happy surprise.
My new SoFi Crypto account came with $10 in free Bitcoin when I invested at least $10 of my own. This seems to be their standard offer. The free Bitcoin didn't hit my account immediately, but I did receive it the same day I made my first purchase. Of course, your mileage may vary.
Other crypto brokers tend to offer new account bonuses, too. However, some exchanges have higher minimum order amounts to score free Bitcoin, so read the fine print.
3. No-commission trading doesn't include crypto
Another thing I didn't think about much beforehand is that crypto brokers charge fees for trading Bitcoin and other cryptocurrencies. Even top brokers that have no-commission trading for stocks and ETFs typically charge fees for crypto trades.
With this in mind, it makes sense to hunt for a broker with the lowest fees if you plan to do a lot of trading. Robinhood advertises $0 trading fees for crypto, but you may find more options.
Perhaps the best way to get around trading fees is to use one of the many credit cards that offer rewards you can redeem for crypto without trading fees. Several crypto brokers now offer these cards. For example, the Coinbase debit card earns 4% back in crypto rewards.
Hop on the Bitcoin bandwagon
As a financial expert, I'm still kicking myself for not buying Bitcoin years ago. But I'm on the bandwagon now -- and I don't regret it.
Do I think I'll retire on my Bitcoin earnings? Hardly. It's a highly volatile kind of investing, and you should only invest money you can afford to lose. Do I have fun watching the market move and trying to guess how it'll go? Absolutely.
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