Bitcoin (BTC) is the world's largest -- and most expensive -- cryptocurrency. If you wanted to buy a whole Bitcoin, at time of writing, it would cost $57,401, according to CoinMarketCap data. But you don't have to buy a whole coin. In fact, you can invest in Bitcoin with less than a dollar.
If that comes as a surprise, you're not alone. Almost 40% of Americans didn't know they could buy a part of a cryptocurrency, according to a recent survey by digital payment company Bakkt. A further 12% didn't understand the question.
The good news is that every major cryptocurrency app and exchange will allow you to buy a fraction of a Bitcoin, or any other cryptocurrency it trades. But you need to watch out for any account minimums and factor in any fees you'll be charged.
Crypto minimum spend and minimum deposit requirements
Cryptocurrency exchanges make it easy to buy as much or as little crypto as you would like. You simply specify the dollar value of your trade, and it will use current market prices to calculate the corresponding amount of crypto. For example, on the Coinbase app, I select Bitcoin, enter the amount of money I want to spend, and it tells me how much Bitcoin I will get.
However, if you only want to invest a small amount, you need to pay attention to the minimum spend and minimum deposit requirements on the crypto platform you plan to use.
Different platforms have different requirements. To give you an idea:
- Coinbase has a minimum spend of $2 and the minimum deposit depends on how you transfer money.
- Gemini's trading minimums depend on the individual crypto -- its minimum for Bitcoin is 0.00001 BTC (about $0.60) and it doesn't have a minimum deposit.
- eToro has a minimum deposit of $50 and a minimum trade size of $25.
Watch out for fees when buying Bitcoin or other cryptocurrencies
Another consideration if you're only buying a small amount of cryptocurrency is the fees. It doesn't make the most sense to buy $50 of Bitcoin only to lose $10 in exchange fees. Different exchanges have different fee structures -- but all of them make money in some way. Some charge when you deposit money into your account, while others charge higher trading or withdrawal fees.
Check the following fees when deciding the best places to buy Bitcoin:
- Deposit fees. Fees change depending on the way you plan to deposit money. Bank transfers are often free of charge, while credit or debit card payments often come with a fee around 3%.
- Trading fees. Some exchanges publish their trading fees while others give you a quote at time of trading. You may be able to get a discount by paying in the exchange's own token -- such as Binance's BNB.
- Withdrawal fees. Make sure you are aware of any withdrawal fees before you make a deposit. You may need to pay a percentage of the withdrawal or a set fee that varies by crypto.
Don't judge cryptos by price alone
The fact you can buy a fraction of a Bitcoin means you don't need to turn to the low price cryptos if you want to invest. Indeed, buying low price cryptocurrencies is much more risky than buying more established coins which have solid business plans and reputable teams.
Just because a coin is cheap, does not make it a bargain. Some meme coins produce trillions of tokens, all worth a fraction of a cent. The creators hope people will be tempted by the low price tag. But if those coins don't have any fundamental utility, there's no guarantee the price will go up. Indeed, there's a good chance the coin will fail altogether.
For example, let's say I had $100 to invest in cryptocurrency.
- Based on today's prices, I could buy 0.00175 BTC. I would only own a fraction of a coin, but if Bitcoin's price rose in value, so would my investment.
- Based on today's prices, I could also become a FLOKI millionaire with 1,368,831 Floki Inu (FLOKI). This is one of the latest pet coins that sprung up after Elon Musk tweeted about his puppy (who's called Floki). I would own a lot of coins, but there is a good chance I would lose all of my investment as the coin has no fundamental value.
If you're investing in cryptocurrencies for the first time, buying a small amount of Bitcoin is an excellent way to start. Make sure you don't spend money you can't afford to lose, as even Bitcoin is still a relatively untested investment and there are still many things we don't know about how the market will develop.
Buy and sell cryptocurrencies on an expert-picked exchange
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that's right for you, you'll need to decide what features matter most to you.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.
Emma Newbery owns Bitcoin.
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