If you’re a newbie who’s looking to get into the crypto space, finding your way around the whole buying of Bitcoin, Ethereum and other cryptocurrencies can be very confusing. But you’re in luck because it is quite simple to learn the crypto way.
with the steps listed below, you can start buying and selling crypto coins in less than you think.
How To Buy Crypto
1. Choose a Crypto Exchange or Broker
Before you can start buying any crypto assets, you’ll need to first get yourself a Crypto Exchange or Broker. Although both do allow you to buy crypto, they still have their key differences you should know.
What Exactly is a Cryptocurrency Exchange?
In simple terms, a crypto exchange is just a platform like a market where crypto buyers and sellers come to trade their currencies. The good side of trading with exchange platforms is that they offer very low fees.
On the other side navigating through these platforms can be very tricky due to the complex charts, multiple trading options, and other advanced features.
Binance, Coinbase, and Gemini are some of the very popular exchanges out there. Of course, these platforms’ interfaces are not so beginner friendly, but they still offer an easy-to-use purchase option.
But you should know that these conveniences come at a cost compared to the standard complex interface. I mean that simply doesn’t just go for free. But if you feel you can’t afford the cost for simplicity, then you can take your time to learn to navigate the standard trading platforms.
S/N: As a newcomer to the crypto trading game, it advised you to make your broker or exchange support Fiat currency purchase via U.S dollars. Why am I saying this? well, most exchanges would only allow you to buy Cryptocurrency using another crypto. This implies that to buy a coin/currency, you’ll have to first buy another crypto that is acceptable for exchange before you can go on with your trade.
What Exactly Is a Cryptocurrency Broker?
Brokers on the other hand take out the stress and complexity in trading, making the entire process seamlessly easy even for beginners. As you would expect though, these brokers charge a fee for this simplicity too,
Yes I know, some platforms might claim to be offering these services for free but they don’t do. what they do is make money from you. how do you May ask?
They do this by selling your transactional info between you and other traders to large cooperations. Or sometimes they might not even execute your trades at all. some of the popular crypto brokers out there are Rabbit and SoFi.
Whilst enjoying the goodness of brokers, you should keep in mind that these guys might place some restrictions on you if you attempt moving your crypto assets outta your account. you might be asking, why even move my crypto in the first place? well, professional traders sometimes prefer hoarding their cryptocurrencies in something called a crypto wallet for extra security.
2. Create an Account and Verify
At this point you should have agreed on a crypto exchange or broker, the next thing is to sign-up for an account. most platforms don’t let you buy or sell until you verify your identity. and yes you must verify your identity as this would help in preventing any fraudulent activity.
Credentials used for this verification process include maybe your driver’s license or passport. they might even ask you to upload a selfie to prove you’re human.
3. Deposit some money in your account
Now before you can buy any crypto assets, you’ll need to have some cash in your account first. There are a couple of ways you could deposit money into your broker account. you could link your bank card to your account or just do a direct transfer, it all depends on the broker you’re using.
S/N: Most of these brokers and crypto exchanges will offer an option to pay directly from your credit card. Beware, as this can be very risky and expensive. this is because credit card companies consider crypto transactions as cash advances.
What does this ash advance mean? it means that these crypto transactions would be subject to a higher interest rate along with the advance fee. To put this in perspective, you’re going to be paying 5% of any transaction you make. This is minus other additional fees that going to be charged by your broker.
4. Try Buying your Choice of Cryptocurrency
As long as you have some cash in your account, you’re good to place your order for cryptocurrency. There are lots of crypto assets out there you could choose from but the most popular ones have been listed below for you.
When that is done and you’ve gotten an idea of the coin you would love to purchase, all that is left to do is type in the ticker symbol of that cryptocurrency – For example BTC for Bitcoin alongside the amount you want to purchase.
Below are some of the biggest cryptocurrencies in the market right now along with their ticker symbols;
Binance Coin (BNB)
USD Coin (USDC)
5. Choose a Crypto Storage Method
For those who don’t know, cryptocurrency is not protected by any organizational body like say the Federal Deposit Insurance Corp (FIDC). Therefore it means they’re at risk of being hacked by hackers leading to you losing your investment. Even losing your password can result in millions of dollars being lost. All these reasons are why it is important to store your assets in a secure place.
Those buying crypto via a broker have little to no choice available to them in choosing a storage method. But if you go the crypto exchange route, then you might just have some options at your disposal.
Here’s what you’ll want to do, buy the cryptocurrency through an exchange and leave it there as they automatically store all assets in something called a crypto wallet for you. But if you think the storage provider used by the exchange is not visible to you, you’re free to transfer your cryptocurrency to another wallet.
There are different types of wallets you should know about before transferring your funds. mainly Hot and Cold wallets.
- Hot Wallet
These type of wallet are used to store cryptocurrencies online and is being operated online via internet-connected devices. This type of wallet is usually the best one because they’re dynamic and can be operated on the go. But as everything has an advantage, there’s a disadvantage. These hot wallets are at risk of being attacked by hackers since it runs online.
- Cold Wallet
Cold wallets as you would expect are not connected to the internet, which makes it kinda the best way to store cryptocurrencies. As with any other external offline storage unit, cold wallets are usually in the form of hard drives or USB drives. What are the cons of using a cold wallet? well if you by any chance lose the keycodes associated with the wallet, it’s a big problem. or if the storage device gets cracked or something, you might end up losing your assets.
Alternatives Ways to Buy Cryptocurrency
While buying cryptocurrency is a major trend right now, it’s a volatile and risky investment choice. If investing in crypto on an exchange or via a broker doesn’t feel like the right choice for you, here are a few options to indirectly invest in Bitcoin and other cryptocurrencies:
Having some crypto assets has seem to be kinda the trend right now as everyone who is anyone wants to own some certain amount of the digital currency. But if using a broker or an exchange to buy cryptocurrencies does not seem like the right way for you then below are some other options you could consider for your next purchase.
1. Use Crypto Exchange-Traded Funds (ETFs)
ETFs are this investment tools that allow you the privilege of buying lots of individual investments in a single fell swoop. What does that mean? it means they offer you a wide variety of diversification.
2. Invest your money in companies linked with cryptocurrency
Investing in companies that are connected to cryptocurrency is another smart way to go as you’ll get exposure to the crypto market, and still have the ability to buy stocks of that company that runs on cryptocurrency. That way you’ll need a Crypto exchange or broker to buy these stocks.
PayPal, Square, and Nvidia are examples of companies that are linked to crypto and is highly advised you invest in them.
As any professional investor would advise, always be sure you have your goals in sight and know what your current financial capabilities are like. The crypto game is a very volatile one, one moment it could be up here and the next moment it is down there.