A Step-by-Step Guide to Investing in Bitcoin & Cryptocurrencies in the Philippines
If you’re reading this article, you’ve probably seen a video or article about Bitcoin at least once. That’s because it’s the hottest thing to talk about right now, and so many people are making great returns from investing in Bitcoin.
But chances are, you’re either skeptical about it, or don’t know what it is at all. Or you’re interested in it, but don’t know how to invest in it.
Well that’s why I wrote this guide for you. I started investing in Bitcoin and cryptocurrencies only 7 weeks ago, but I’ve already made great returns. And I’ve been reading and studying Bitcoin and cryptocurrencies obsessively over the past few weeks.
I’m writing this guide not as financial advice, but as a way to help people interested in Bitcoin and cryptocurrencies save time and know the exact steps to investing.
I remember what it felt like to know nothing about Bitcoin. It took me quite a while before learning what Bitcoin and cryptocurrencies are and how to invest in them, and I’d love to help others save time and learn faster.
But before I go on, I should remind you — you should only invest money you’re okay with losing in Bitcoin/cryptocurrencies, because this is a high-risk, high-reward investment.
Nevertheless, if you still want to invest in Bitcoin and cryptocurrencies, then you must first do step 1:
Step 1: Know and understand what Bitcoin, the blockchain, and what cryptocurrencies are, and why they’re going to be important in the future
Before investing in Bitcoin and cryptocurrencies, you should definitely understand what they are first. This is so that:
- You know what you’re getting yourself into and can explain to others what you invested in.
- You can see for yourself if you believe in the future of Bitcoin/cryptocurrencies, rather than just buying into hype, and
- You know the risks involved with investing in Bitcoin/cryptocurrencies.
As such, I’ll explain what Bitcoin and cryptocurrency is for you below, so you can understand it more:
What is Bitcoin?
Here’s the definition of Bitcoin straight from the creator (Satoshi Nakamoto):
“A purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution”
So basically, Bitcoin is a digital currency that could be exchanged from one person to another person, where that payment doesn’t go through a bank or any intermediary.
There are four main benefits to using Bitcoin, and these are:
- If you’re sending money to people overseas, it would usually be cheaper for you to send them money using Bitcoin rather than using a wire transfer or bank transfer.
- Bitcoin currently takes about 20 minutes to an hour (usually) to process a payment, whereas international wire transfers or bank transfers can take longer to process
- You can store your money in Bitcoin and treat it as “digital gold”. If you own a hardware wallet for your Bitcoin, this can be more secure than leaving your money in a bank (i.e. if you think that banks can be hacked or stolen from, then it might be better to store your money as Bitcoin)
- You can buy Bitcoin as an investment and hope that the value of it goes up
So right now, most people who are buying Bitcoin are using it for reason #4. They’re treating it as an investment, because there’s a limited amount of Bitcoin that will be available (21 million), so if more people want to buy and own Bitcoin in the future than those who do today, the price will naturally be higher than what it is today.
What are cryptocurrencies?
Meanwhile, cryptocurrencies are the broader family of what Bitcoin is. Bitcoin is a type of cryptocurrency (and it was the first one), but now there are hundreds of other cryptocurrencies.
Basically, as said by Investopedia, a cryptocurrency is a “digital or virtual currency that uses cryptography for security.” Cryptography is the art of codes that make something hard to hack/decode. As such, transactions using cryptocurrencies are usually more secure than normal bank transactions, because they are irreversible and untamperable.
These are quite basic definitions of Bitcoin and cryptocurrencies, but I believe I gave you enough to start with.
If you’d like to know more about what Bitcoin and cryptocurrencies are, you can watch the documentary entitled “Banking on Bitcoin”. It’s the best resource that explains everything about Bitcoin, the blockchain, and it’s history, and it’s only 1.5 hours. It’s available for Netflix, so you can take a free trial to watch it!
Other than that, there’s also a lot of other good articles/resources about cryptocurrencies written by Taylor Pearson here:
Now that you know what Bitcoin and cryptocurrencies are, I’ll show you first how to invest in Bitcoin in the next steps below. If you want to invest in other cryptocurrencies though (which are also called ‘altcoins’ — alternative coins to Bitcoin), you should still read until the end here. This is because in most cases, you have to buy Bitcoin first in order to buy other altcoins.
Step 2: Compute how much your total savings are, and see if 10% of that is at least P5,000 ($100).
P5,000 ($100 USD) is the minimum I’d recommend to people when first investing in Bitcoin/altcoins.
I’m writing this guide mainly with students in the Philippines as my main audience (people like me), so that’s why the minimum is P5,000. It’s definitely better to invest more money since there are fixed fees involved, but you can still make a profit over your fees with just a minimum of P5,000.
Since Bitcoin and cryptocurrencies are a high-risk/high-reward asset class, it’s recommended that you only invest 10% of your total savings/net worth in it. As such, I’d only recommend investing in it if you have around P50,000 worth of savings/investments, and have P5,000 that you’re willing to invest.
And when you invest that P5,000, you should think that you’re okay with losing around 50–90% of that money, because that does happen when investing in Bitcoin/altcoins.
However, there’s also potential of making >20% or even 2x returns in just a few days/weeks. Prices are volatile, so they change every day. If you buy Bitcoin and the price goes down 20% or 40% suddenly, don’t panic sell. It’s still possible (and likely) for Bitcoin to go back up and make you a profit.
Step 3: Make a coins.ph account, and get yourself verified
There’s only three ways of getting Bitcoin — you either buy it from someone, or you buy it at an online platform, or you mine it.
Now mining Bitcoin is something I’m not familiar with, but from what I know, you’d need at least P200,000 to buy GPUs/mining rigs to mine Bitcoin. And there’s a lot more research involved in that, so I wouldn’t recommend doing that if you’re a beginner.
So the way most people get Bitcoin is buying it from some company, which is usually an online platform. In the Philippines, the most popular (and what I use) to buy Bitcoin is coins.ph. Coins.ph is like a digital wallet that you can load up with pesos and then convert those pesos into bitcoin.
There’s also a few other places to buy Bitcoin, such as Abra. It’s usually a bit cheaper to buy Bitcoin with Abra, but the only bank they support currently is Unionbank (apart from pawnshops like Tambunting, etc.). I haven’t tried buying Bitcoin on Abra either. So for now, I’d recommend you use coins.ph.
You can make a coins.ph account and get yourself verified first. You can do so through my referral link to get a free 50 pesos to start: https://coins.ph/m/join/o8l3gi.
After getting verified, you can press ‘Cash In’, then click any of their available options. Your best option is probably to click “Over-The-Counter Banking”, and select “BPI (via Dragonpay)”. Don’t worry if you don’t have a BPI account or don’t want to go to a BPI branch, because after you enter your amount and confirm your payment, you can click “Pay with Dragonpay”. After clicking pay with Dragonpay, you can select any of the options below.
You can deposit any amount of money in PHP (the minimum is P20 I believe, but again you’ll want to deposit a minimum of P5,000) through one of the options above. Then they’ll load up your coins.ph wallet with that money. You can also deposit at a 7/11, but this has a 100 peso fee.
If you’re a student in UP or Ateneo, there’s a RobinsonsBank across Ateneo that lets you deposit to your coins.ph wallet, and they charge you 0 fees. China Bank and East West Bank also let you deposit with 0 fees. Other banks like BPI and Security Bank let you deposit too, but with a fee of P25 or P50.
Step 4: Convert your pesos into Bitcoin
After depositing money into your coins.ph wallet, you can then convert those pesos into Bitcoin anytime you want to on coins.ph. Also, something to take note of is that you don’t have to buy whole numbers of Bitcoin. You can buy 0.0001 even.
Then, you can follow the price of Bitcoin on coins.ph, and if you feel like it’s going too high, or you’ve made enough returns (like a 20% return), and you’re happy with that, then you can convert back your Bitcoin into pesos easily.
But don’t keep converting it back, because the sell rate is always lower than the buy rate. This is why the peso value of your Bitcoin will always be lower than what you invested at the start.
The difference between the two rates fluctuates, and I’ve seen it fluctuate as a 3–6% difference. So to ensure profit, make sure your gain is at least 10% before you convert back your BTC into pesos.
Step 5: Download the coins.ph mobile app and check it to track the price of your Bitcoin
Now that you’ve invested in Bitcoin, you probably want to know how your investment is doing regularly. One way to do this is to download and use the coins.ph mobile app. You can see how much your BTC would be in pesos if you converted it back on the app, and it updates quite often.
That’s it!
So there you have it, these are the 5 steps to getting started on investing in Bitcoin! Of course there are other things you can research on before investing, but it’s okay to just invest a bit first, then read and understand more on it later on.
That’s what I did, and investing early helped me learn a lot about how volatile Bitcoin is, and it motivated me to research more on when to buy more or sell my Bitcoin.
However, now that you’ve invested in Bitcoin, it’s important that you now read up more on how to be a good investor, and read up on other altcoins that you could invest on. Bitcoin is only one of hundreds of cryptocurrencies, and there are a lot of altcoins that have even more potential for growth than Bitcoin.
As such, if you want to get started on investing in altcoins, I’ve written a part 2 to this guide, and it’s linked here. Hope you find it useful too!
Also, if you have any questions, feel free to email them to me at brian.tan@obf.ateneo.edu.
Want some free Bitcoin?
One way to earn a few dollars of Bitcoin regularly is by signing up on Earn.com. Earn.com lets you earn anywhere from $1-$20 in Bitcoin every time you reply to a message or complete a task that a person or company sends you.
I’ve earned about $20 in Bitcoin just from replying to messages and doing tasks, which is pretty amazing, so try it out! Don’t forget to get verified and join some lists (like the Bitcoin and Ethereum lists) to make sure you’ll get as many messages as possible. Then just wait for a company to give you a task or message.
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Brian Tan is a 20-year-old writer, UI/UX designer and front-end web developer from the Philippines. He’s also the co-creator of HangTime — a web app built to help students create and share class schedules with each other. Get in touch with him at brian@hangtimeapp.com.
