How to buy cryptocurrency
If you are new to the crypto world, figuring out how to buy Bitcoin, Dogecoin, Ethereum and other cryptocurrencies can be confusing at first. Thankfully, the strings are very easy to learn. You can start investing in cryptocurrencies by following these five easy steps.
1. Choose a broker or crypto exchange
To purchase cryptocurrency, you must first select a broker or cryptocurrency exchange. Even if you buy crypto, there are some important differences to keep in mind.
What is a cryptocurrency exchange?
A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies. Exchanges often have lower fees, but they also have more complex interfaces with multiple business types and sophisticated performance charts, all of which can be intimidating to new crypto investors.
Some of the most popular cryptocurrency exchanges are CoinBase, Gemini, and Binance. America. The standard trading interface of these companies overwhelms beginners, especially those who do not have background trading stocks, they also offer user-friendly easy buying options.
Start investing in cryptocurrency today with these select partners
However, since beginner-friendly options charge significantly more than the cost of purchasing the same crypto through the standard trading interface of each platform, convenience comes at a price. To save costs, you will learn enough about using the standard trading platform before or long after you buy your first crypto.
An important note: As a newcomer to crypto, you should make sure that your exchange or brokerage allows fiat currency transfers and purchases made in US dollars. Some exchanges only allow you to buy crypto using another crypto, which means that before you can start trading crypto on that platform you will need to find another exchange to buy tokens approved by the preferred exchange.
What is a cryptocurrency broker?
Cryptocurrency brokers eliminate the complexity of purchasing crypto, providing easy interfaces that allow you to interact with exchanges. Some exchanges charge more than that. Others refer to you as “free” when you and other traders make money by buying and selling large brokerages or funds or by selling information that does not execute your trades at the best possible market price. Robinhood and SoFi are two of the most well-known crypto brokers.
Although they are undeniably convenient because you have to be careful with brokers
You may face restrictions on removing your cryptocurrency holdings from the platform. For example, in Robinhood and SoFi, you cannot transfer your crypto holdings from your account. This may not seem like a big deal, but sophisticated crypto investors prefer to keep their coins in a crypto wallet for extra security. Some people even opt for non-Internet hardware crypto wallets for added security.
2. Create and verify your account
Once you have decided on a cryptocurrency broker or exchange, you can sign up to open an account. Depending on the platform and the amount you are buying, you may need to verify your identity. This is an important step in preventing fraud and meeting federal regulatory requirements.
You can not buy or sell cryptocurrency until you have completed the verification process. The platform may also ask you to submit a copy of your driving license or passport and to upload a selfie to prove that your appearance fits the documents you submitted.
3. Deposit cash to invest
To purchase crypto, you need to make sure you have funds in your account. You can also deposit money into your crypto account by linking your bank account, authenticating wire transfers, or even paying by debit or credit card. Depending on the exchange or broker and your funding method you may have to wait a few days before using the money deposited to buy cryptocurrency.
Beware of a big buyer here: Although some exchanges or brokers allow you to deposit money with a credit card, doing so can be very risky and expensive. Credit card companies process cryptocurrency purchases with credit cards in the form of cash advances. This means they are subject to higher interest rates than regular purchases and you may also have to pay an additional cash advance fee. For example, you may have to pay 5% of the transaction amount when you make a cash advance. This is in addition to any fees charged by your crypto exchange or brokerage; These can run up to 5%, which means you will lose up to 10% of the fees on your crypto purchases.
cryptocurrencyryptocurrency order
Once the money has entered your account, you are ready to place your first crypto currency order. There are hundreds of cryptocurrencies to choose from, from popular names like Bitcoin and Ethereum to obscure cryptos like Theta Fuel or Hollow.
When you decide which cryptocurrency to buy, you can enter its ticker symbol — Bitcoin, for example, BTC- and how many coins you would like to buy. Like most exchanges and brokers, you can buy partial shares of cryptocurrency, allowing you to buy high-priced tokens such as Bitcoin or Ethereum, otherwise, it will take thousands to protect themselves.
Symbols of the 10 largest cryptocurrencies by market capitalization are as follows:
Bitcoin (BTC)
Ethereum
Tether (USDT)
Binance Coin (BNB)
Cardano (ADA)
Dogecoin (DOGE)
XRP (XRP)
USD Coin (USDC)
Polkadot (dot)
UNISWAP (UNI)
Based on market capitalization as of June 28, 2021
5. Select the storage method
Cryptocurrency exchanges are not supported by protections such as the Federal Deposit Insurance Corp (FDIC) and are at risk of theft or hacking. If you forget or lose the code to access your account, you may also lose your investment as millions of dollars worth of Bitcoin is already done. That is why it is so important to have a secure storage location for your cryptocurrencies.
As mentioned above, if you are buying cryptocurrencies through a broker, you can There is very little or no choice on how your cryptocurrency will be stored. If you buy cryptocurrency through the exchange, you have more options:
Leave the crypto in the exchange. When you buy cryptocurrency, it is usually stored in so-called crypto wallets that are connected to the exchange. If you do not like the provider with your exchange partner or you want to move it to a more secure location, you can move it from the exchange to another hot or cold wallet. Depending on the size of the exchange and your transfer, you may have to pay a small fee to do so.
Hot purse. These are crypto wallets, which are stored online and run on the Internet-
Connected devices such as tablets, computers, or phones. Hot wallets are convenient, but they are still more likely to be stolen because they are connected to the internet.
Cool purse
Cold cryptocurrencies are not connected to the Internet, making it your most secure choice to have cryptocurrencies. They take the form of external devices such as USB drives or hard drives. You should be careful with cold wallets, however — if you lose the keycode associated with them or the device breaks or fails, you will not be able to recover your cryptocurrency. The same thing happens with some hot wallets, some are handled by security guards who help you recover your account when you are locked up.
Alternative ways to buy cryptocurrency
While buying cryptocurrency is the main trend right now, it is a volatile and risky investment option. If investing in crypto on the exchange or through a broker does not seem like the right choice for you, here are some options for indirect investing in Bitcoin and other cryptocurrencies:
1. Wait for crypto exchange-traded funds (ETFs)
ETFs are the most popular investment tools that allow you to buy hundreds of personal investments at once. This means they provide instant diversification and are less risky than investing in personal investments.
There is a tremendous appetite for cryptocurrency ETFs, which allows you to invest in multiple cryptocurrencies at once. Cryptocurrency ETFs are not yet available to everyday investors, but some may come soon. As of June 2021, U.S. Securities and
And the Exchange Commission (SEC) is reviewing three cryptocurrency ETF applications from CryptoCoin, VanEck, and WisdomTree.
2. Invest in cryptocurrency-related companies
If you want to invest in companies with direct products or services subject to regulatory oversight — but still want to expose the cryptocurrency market — you can buy stocks of companies that use cryptocurrencies or blockchain or blockchain. Empower them. You will need an online brokerage account to purchase shares of public companies:
This technology company designs and sells graphics processing units that are at the heart of the systems used for cryptocurrencies.
PayPal (PYPL). Already a popular choice for people looking to buy goods online or transfer money to family and friends, this payment platform has recently expanded to allow customers to buy and sell selected cryptocurrencies with their PayPal and Venmo accounts. To adapt.
Square (SQ). This payment service provider for small businesses has made over $ 220 million in bitcoin purchases since October 2020. In February 2021, the company revealed that Bitcoin had 5% cash on its balance sheet. Additionally, Square’s Cash app allows people to buy, sell and store cryptocurrencies.
As with any investment, make sure you consider your investment goals and current financial situation before investing in cryptocurrencies or private companies that have a large stake in them. Cryptocurrency is very volatile – a single tweet can lower its price – and it is still a very speculative investment. This means you need to invest carefully and cautiously.