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Ask CryptoVantage: Is it Worth Buying Bitcoin if I Only Have $10?
If you are just getting started with bitcoin, buying $10 can be a great first step to learning about bitcoin and how to use it. By starting with a small amount, you do not have to worry about making costly mistakes. Once you are comfortable with bitcoin you can always buy more.
If your reason for buying bitcoin is solely as an investment, then it probably does not make sense to buy just $10 worth. This is because there is a steep learning curve (and some other costs) which must be considered when buying bitcoin.
Why it Might Make Sense to Buy $10 Worth of Bitcoin
Satoshi Nakamoto, the mysterious creator of bitcoin, wrote the following within the first weeks of bitcoin’s release in January 2009:
“It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy. Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine.”
Back then bitcoins had no value, but Satoshi could see the potential for bitcoin’s rise in popularity. And with the increase in popularity, he correctly predicted it would have a corresponding rise in price. Because bitcoin is still early in terms of user adoption, it is still true that “it might make sense just to get some in case it catches on.”
If you are new to bitcoin, it can be a great idea to buy just a small amount initially. Your potential profits will be lower in this case, but it gives you the opportunity to learn about bitcoin and use it without worrying about making mistakes and losing a bunch of money. Once you become more comfortable using bitcoin, you always have the option of buying more down the road.
Reasons Not to Buy
Buying $10 of bitcoin can be a good idea if your intention is to learn and use bitcoin, but it’s probably not worth buying $10 of bitcoin if you are only treating it as an investment.
To put things in perspective $10 worth of Bitcoin at the time this article was published was worth 0.000033 BTC. Not exactly a king’s ransom.
The days of turning $10 into $10,000 by buying bitcoin are probably behind us. This was much more likely to happen when the total value of bitcoin was only a million dollars, but now that bitcoin has a market capitalization of nearly a trillion dollars it is far less likely to happen. Read our article “What’s the Realistic Ceiling for Bitcoin Price?” on why we believe this is the case. This doesn’t mean bitcoin’s price won’t continue to rise, but it cannot rise exponentially forever.
The price of Bitcoin over the last 10 years of Bitcoin. Courtesy: CoinMarketCap.
There are other reasons it probably does not make sense to buy only $10 worth of bitcoin as an investment:
- Transaction fees typically cost $0.50 to $5 to send bitcoin to your own wallet.
- The most common methods of buying bitcoin require you to prove your identity, which puts your information at risk of being hacked or sold.
- Buying bitcoin on exchanges can also incur extra fees
- The learning curve to understanding how to properly store bitcoin is quite steep – the most common method of storing bitcoin securely involves buying a hardware wallet, which can cost over $100.
Takeaways
Finally, let’s recap what we’ve learned about investing very small amounts in Bitcoin:
- Starting with $10 can be a great way to learn how to use bitcoin safely, without the risk of losing too much money.
- Once you are more comfortable using bitcoin and know how to store it safely, you can add to your holdings.
- $10 of bitcoin is not likely to increase to $10,000 as it has in the past (although it still has a lot of room for growth).
- If you plan to buy bitcoin solely as an investment, it is probably not worth buying only $10 worth.
- A better idea might be investing $10 into Bitcoin every month. This is called Dollar Cost Averaging (DCA) and it works surprisingly well.
Kraken
Want to invest your first $10? Kraken offers some of the lowest crypto exchange fees
