Bitcoin 101
Easy Guide to Get Started With Bitcoin
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What Is Bitcoin?
Put simply, bitcoin is digital money.
Bitcoin is the first internet-native monetary instrument to gain broad global adoption. It is a global, private, digital, and rules-based system with a supply cap of 21 million units.
More Info From Leading Financial Institutions:
BlackRock — Bitcoin: A Unique Diversifier
Fidelity — The case for bitcoin
Why Bitcoin?
Bitcoin is financial optionality.
With a finite supply cap and predictable monetary policy, bitcoin is not prone to monetary debasement so it can be seen as an inflation hedge or store of value asset that may become more valuable as it becomes more scarce. Because bitcoin is digitally-native, it is borderless and can be transferred or held anywhere in the world at any time, at near-zero cost. Bitcoin is decentralized and permissionless, meaning no central authority or third party is needed to facilitate use of the network. Anyone can use bitcoin and everyone using bitcoin does so within the same rules.
Owning Bitcoin
Anyone can own bitcoin in a variety of ways. Two common ways:
Self-custody bitcoin wallets
Custodial bitcoin or cryptocurrency exchanges
A custodial cryptocurrency exchange is similar to a bank or traditional brokerage platform. The user sacrifices privacy and trusts the platform to hold their assets and operate fairly. Holding bitcoin on an exchange is a way to own a claim to bitcoin via a trusted third party. Many exchanges allow users to transfer their bitcoin off of the exchange to any bitcoin wallet, including self-custody bitcoin wallets.
Self-custody bitcoin wallets provide the user with complete ownership over his or her bitcoin. These types of wallets are often standalone mobile or desktop apps or apps tied to a hardware device where you, the owner of the wallet, use a private key, similar to a password, to send and receive funds.
More Info on Bitcoin Wallets and Exchanges:
From My Blog, Bitcoin Binge — An Easy Guide to Bitcoin Storage
Bitcoin Exposure
Individuals and institutions may be interested in gaining exposure to bitcoin markets or the price of bitcoin without owning bitcoin outright. One example of this could be as a way for an individual or household to add bitcoin exposure to a retirement or brokerage account where you cannot own bitcoin. Large institutions may have regulatory requirements or restrictions around owning bitcoin outright so traditional financial products can offer an alternative solution.
Bitcoin ETFs
In the United States, a variety of bitcoin exchange-traded funds are available to provide investors with exposure to the asset class. Examples of ETFs that hold bitcoin as the underlying asset and that seek to track the performance of price of bitcoin include:
ARKB — The Ark 21Shares Bitcoin ETF
Other Equity Alternatives
A variety of other ETFs, mutual funds, and publicly-traded companies are also available to investors that provide exposure to bitcoin and cryptocurrency industries or markets.
These can include equities that deal in bitcoin mining, digital payments, cryptocurrency exchanges, or even companies who hold bitcoin on their balance sheets as a capital or reserve asset alternative to something like cash.
One example of an alternative equity to the bitcoin ETFs is the Fidelity Crypto Industry Digital Payments ETF, ticker symbol FDIG. The ETF has holdings that include Coinbase, a leading cryptocurrency exchange, the largest publicly-traded bitcoin mining companies such as MARA Holdings and Riot Platforms, traditional payments companies such as Visa and Mastercard, and newer financial, payments, and technology companies like Robinhood and PayPal. It’s a diverse alternative to owning bitcoin outright or investing in the bitcoin ETFs.
Bitcoin mining companies are another way to gain bitcoin exposure. Bitcoin miners process transactions on the bitcoin network and earn a bitcoin reward for their efforts. They are a key part of the bitcoin network and mining is highly competitive. Several publicly-traded mining companies are now accessible to investors such as the ones mentioned above, MARA Holdings (MARA) and Riot Platforms (RIOT). Smaller mining companies, such as IREN Limited (IREN), are more speculative but differentiate themselves through their operational strategies. For example, IREN’s operations are 100% powered by renewable energy. Many miners diversify their business lines by offering broader data center needs as the infrastructure required for bitcoin mining is similar to that needed for other high-performance computing needs such as gaming and artificial intelligence. Others still, such as Bit Digital (BTBT), deal in all of this and hold or stake altcoins, offering exposure to other cryptocurrencies.
MicroStrategy (MSTR) is a software company that now operates primarily as a bitcoin development and holding business, holding more than 450,000 BTC as of the end of 2024. The significant amount of bitcoin on their balance sheet makes them another way to gain bitcoin exposure via traditional equities. Other companies mentioned above such as COIN, MARA and RIOT all hold bitcoin on their balance sheets.
To see other public and private companies that hold bitcoin along with which ETFs, funds, and even governments hold bitcoin, visit BitcoinTreasuries.net.
Now what?
If you’re looking to explore buying and holding bitcoin outright, visit the blog post mentioned earlier — An Easy Guide to Bitcoin Storage. If you’re interested in learning more about alternative ways of gaining bitcoin exposure in your financial portfolio via the bitcoin ETFs or other equity products, look further into the ones mentioned above and research their peer sets.
A Bit About Me:
I’m just a regular guy who happens to be a bitcoiner too. I’ve been following bitcoin for more than a decade. I have a family and a traditional career. I also mine bitcoin and have mined other cryptocurrencies at home as a hobby. Over the years, I’ve learned to view bitcoin as digital gold and believe it provides financial optionality, especially to those living in places outside of the United States. I believe bitcoin is an overwhelming net positive for the world.
Short term, bitcoin’s price is volatile. Long term, however, bitcoin has appreciated in value. It’s also only 16 years old as of January 2025. Greater bitcoin adoption by traditional finance and even governments is occurring and signals that bitcoin isn’t going anywhere anytime soon.
Bitcoin is different from other cryptocurrencies. I no longer actively buy, sell, or hold other cryptocurrencies. Unlike most cryptocurrencies, bitcoin is grounded in the real world via bitcoin miners and other small and industrial scale operations. In retirement accounts, I have bitcoin exposure through the types of equity products mentioned above. I also hold bitcoin outright in self-custody.
For More Info:
Read my blog! There’s a new post about bitcoin every Friday. There are free posts and previews for everyone. You can upgrade to paid to support the blog and connect more.
Keep learning. Ask questions. Join the bitcoin community. There are resources available for all kinds of bitcoiners. I’m happy to share more info. Just get in touch.
This is the tip of the iceberg. It’s a high-level guide to get you started.
I hope you find it useful.
#HODL
I am not an investment or financial advisor. This is not financial advice. All opinions expressed are mine alone. There are risks involved in placing any investments in securities, Bitcoin, cryptocurrencies, or in anything. Any information presented is just that and is for informational and entertainment purposes only.
