Buying Bitcoin with Coinbase: How much have I made?
Wondering what Bitcoin is, where you can buy it from and whether it can make you any money?
Bitcoin has been hitting the headlines more and more recently.
It remains a high risk investment according to the FSA, but its high rewards for investors over recent years coupled with endorsements from companies such as Tesla and PayPal have helped to boost its reputation.
I purchased £100 of Bitcoin in November 2020 and this post is all about my experience of buying my first stash of cryptocurrency, AND how much I’ve made.
Just a reminder this website does not offer financial advice, this is just me sharing my personal experience. You should always remember that Bitcoin is a high risk investment and anything you put in, you should be prepared to lose.
Bitcoin has courted controversy and made people millions in recent years.
The cryptocurrency was labelled “ghost money” by billionaire Elon Musk, but in recent months it’s seen a huge surge in value. That’s thanks in a large part to Musk changing his mind and instead deciding to invest big in the cryptocurrency. His company Tesla is also now set to accept Bitcoin as payment for its products.
I’ve been curious about Bitcoin for a while as a friend had invested in it a few years ago, but as I didn’t really understand how it worked I was hesitant to put my own cash into it.
I’m also someone who had not until recently invested in stocks and shares at all (apart from my pension), so the idea of putting money into something that may immediately depreciate in value felt scary to say the least.
A good old-fashioned bank account or ISA is something that I know I can rely on – my money is safe and I’m not going to lose it.
But having read more about Bitcoin, I decided to invest as an experiment to see how much I could potentially make. It’s seen more huge gains in the last few months. I wondered if I invested in it I might actually be able to beat the bank’s tumbling interest rates.
I went small to start with, investing £100 via the website (referral link) Coinbase. So how much did I actually make? You may be surprised.
What is Bitcoin?
Bitcoin is a digital currency created by a person unknown and is the world’s largest cryptocurrency.
It is completely virtual and while it can be used to purchase products and services, there aren’t many shops that accept Bitcoin.
At the time of writing this one Bitcoin was worth £19,880.
Bitcoin got a huge boost in October this year when PayPal announced it will allow customers will be able to buy and sell Bitcoin via their PayPal accounts.
You will be able to use Bitcoin held in your PayPal account to pay for products from merchants. PayPal will convert the currency for you, so the company you are dealing with will not receive Bitcoin as payment.
This move has done wonders for Bitcoin’s reputation, making it appear like a more legitimate currency in the eyes of people who have been sceptical in the past. This is partly why the value of Bitcoin is soaring right now.
But putting your money into Bitcoin remains a big gamble. Its value could be zero within a day.
The Financial Services Authority has even warned people to be cautious when investing in Bitcoin.
Buying Bitcoin through Coinbase
My experience with buying Bitcoin with Coinbase is positive, although it took several days for my account to be set up.
I invested through Coinbase because my friend already has an account with Bitcoin with this site, and he was able to send a referral link to me that meant we both got rewards for my purchase.
After giving the site my personal details I then had to upload some photo ID – they accept your passport or driving licence. After that I waited four or five days for my account to be approved.
Once it was given the OK I could begin trading immediately so I put through a transaction for £100 of Bitcoin. I was charged a £3.84 fee by the website for the transaction.
I then received £7.54 worth of additional Bitcoin for using my friend’s referral link (if you use my referral link you can do the same).
So I started off with just over £100 of Bitcoin.
How much did I make with £100 of Bitcoin?
Obviously this experiment isn’t over just yet, but I can tell you how much I made just over one month after investing in Bitcoin.
At its peak in late December my Bitcoin value soared to £158. When I first published this post my Bitcoin balance was £150.24.
That’s equivalent to 0.00753741 of Bitcoin – not even one whole Bitcoin! That just shows you how insane the value of Bitcoin is right now.
So that means I saw a return of around 50% in a little over a month – extraordinarily higher than you may get at any bank in interest right now.
But of course there is a but.
The Bitcoin bubble could burst at any time. Putting your money in Bitcoin is not a “safe” place to leave it. Not by a long shot.
I’ve come to consider my Bitcoin investment as a bit of a punt. It’s an experiment that may well net me a good return – relative to the amount I’ve invested – or I may lose the entire £100 investment tomorrow.
Had I used £100 to purchase Bitcoin back at the beginning of the cryptocurrency, I would be a multi-millionaire today. As it stands today you are unlikely to make a fortune on Bitcoin unless you put a lot of money into it, and there are no guarantees. You could lose it all.
UPDATE: As of March 2021 my Bitcoin is now worth £359.
My thoughts on buying Bitcoin
I made £50 with £100 of Bitcoin in five weeks BUT I bought at a time when Bitcoin was on an upward swing.
Check in with me in a month’s time and it may be that I lost half of this. Maybe I will have made a little more. The point is right now no-one knows what the future of Bitcoin is.
For now I am doing what’s known as “HODling” in the Bitcoin world – that means I’m holding onto my cryptocurrency rather than selling it, hoping for it to shoot “to the moon”. I’ll let you know how I get on.
If you do fancy giving Bitcoin a try I recommend you only invest money you’re prepared to lose, or are happy to leave in the portfolio for a few years to see how the currency value evolves.
The Bitcoin bubble may burst tomorrow, although there are signs that it’s gaining more confidence from the financial market which can only legitimise it further.
If you fancy purchasing your own Bitcoin you can use my referral link to gain you £7.41 in Bitcoin if you buy more than £74.11 via Coinbase. By using this link I would also get £7.41 for referring you.
