Yes, buying Bitcoin for $5 or any other small amount is still a good idea.
However, even though most people can afford to buy $5 of Bitcoin, most shy away due to FOMO.
Most newcomers to the world of cryptocurrency will likely experience a fear of missing out (FOMO) when they see Bitcoin’s current price in the tens of thousands. It’s easy to feel like you’ve missed the boat if you don’t have a lot of money to invest.
The good news, however, is that it’s still possible to purchase Bitcoin for as little as $5, and it can be a worthwhile investment even at this seemingly small amount.
In this article, we’ll take a closer look at whether it’s worth buying $5 worth of Bitcoin, given the current price of Bitcoin.
Common Misconceptions of Bitcoin’s Price
There is a common misconception about Bitcoin’s market price, especially among people new to the world of cryptocurrencies, particularly Bitcoin. Most people often feel deterred by its seemingly high price. The notion that Bitcoin is too expensive for ordinary investors is a common misconception, and it’s important to understand why this belief is flawed.
Bitcoin is divisible into smaller units called Satoshis, named after its pseudonymous creator, Satoshi Nakamoto. One Bitcoin is equivalent to 100 million Satoshis, which means that even if the price of a single Bitcoin is in the tens of thousands of dollars, you can still invest in smaller, more affordable fractions. This divisibility allows individuals to enter the market at a comfortable investment level, making Bitcoin accessible to investors with varying budgets.
Another misconception stems from comparing Bitcoin’s price to traditional assets like stocks. In the stock market, a high-priced stock may indeed be less accessible to the average investor. However, Bitcoin operates differently. Its divisibility ensures that the price of a single Bitcoin is not a barrier to entry. Instead, investors should focus on the percentage gains or losses they may experience rather than the nominal price change.
It is important to note, however, that while it is possible to buy $5 worth of BTC, there are network and exchange fees that you should account for in your purchase. Be sure to find low-fee exchanges or deposit methods to make it worth buying just $5 of BTC. Many exchanges charge a fee of $1.99 to $2.99 to use a credit card to buy crypto, which doesn’t make sense for buying such a low amount. If you only have $5 to spend, the best move would be to save up a bit and try to buy a larger chunk if the fees make it unprofitable to buy a small amount.
Also, remember that the current price of Bitcoin is just a snapshot in time. Like any investment, the value of Bitcoin fluctuates greatly, and past performance doesn’t guarantee future results.
However, the long-term growth potential of Bitcoin, coupled with increasing mainstream adoption and other factors, suggests that the current price may not be as prohibitive as it seems at first glance.
Why Satoshis are Better than Bitcoins
Now that you understand why the price is not a barrier to buying Bitcoin let’s take a closer look at why accumulating satoshis is much cheaper and faster than buying an entire Bitcoin.
At the moment, you will need about $28,000 to get your hands on a single Bitcoin. However, fees associated with Bitcoin transactions are based on the size of the transaction in bytes and the level of congestion on the network at the time of the transaction.
Making micro Satoshi transactions which are typically smaller in size, may actually result in lower fees compared to transactions involving larger amounts of Bitcoin.
According to the Bitcoin whitepaper, the transaction fees associated with Bitcoin transactions are optional. Instead, these fees are designed as a tip to the miner for processing the transaction.
However, miners may prioritize transactions with higher fees or higher tips, so network fees can go up. In contrast, Satoshis transactions may not always require a fee, especially if the transaction is not time-sensitive or if the network is not congested.
In terms of transaction speed, the whitepaper states that Bitcoin transactions are processed every 10 minutes on average. However, the actual transaction confirmation time may vary depending on the level of network congestion and the fees paid for the transaction.
Satoshis transactions may be processed faster than Bitcoin transactions due to their smaller size, and these transactions come at much lower fees. This means you can accumulate Satoshis and even get enough over time to have several Bitcoins while paying negligible network fees.
Risks of Buying Bitcoin with Just $5
Buying Bitcoin for just $5 may seem like a low-risk investment, but there are a number of potential risks to consider before taking the plunge.
Volatility of the Bitcoin market
Bitcoin is well-known for its extreme volatility, with prices fluctuating wildly from day to day and even hour to hour. While this volatility can be a good thing for traders looking to make quick profits, it can be a major risk for long-term investors. If you invest $5 in Bitcoin and the price drops suddenly, you could lose a significant portion of your investment.
Lack of regulation in the Bitcoin market
Another risk associated with buying Bitcoin for any amount is the lack of regulation in the market. Unlike traditional investments like stocks or bonds, there is no governing body that oversees Bitcoin transactions. This lack of oversight can make it difficult to know whether your investment is safe or not and can leave you vulnerable to fraud or other illegal activities.
Possibility of losing the entire investment
Perhaps the biggest risk associated with buying Bitcoin for any amount is the possibility of losing your entire investment. As mentioned earlier, Bitcoin is an extremely volatile asset, and the price can drop suddenly and unexpectedly. If this happens, your $5 investment could quickly be cut in half. However, if you continue to hold onto your Satoshi, the market can recover and even perform much better.
Conclusion: Start Accumulating Today
In closing, we are still in the early days of Bitcoin, as the technology has only existed for about 14 years as of 2023.
There are wild predictions hitting the headlines on a daily basis, with some predicting a bear market while other foreseeing a market bull rally. However, it is important to do your own research and make decisions that will benefit your future. Even if you start accumulating Bitcoin with just $5, with time, you can accumulate enough satoshis to own a couple of Bitcoins. One of the proven strategies for this approach is dollar cost averaging. You can learn more here about how to invest in Bitcoin.