How to Buy Cryptocurrency – Investing in cryptocurrency is a lot like buying assets such as mutual funds or stocks. Although buying cryptocurrency is a good idea, you need to be familiar with the basics of crypto and how it fits into your investment plan.
In this digital age, it is possible to make an impressive amount of money from investing in cryptocurrencies such as Bitcoin and Ethereum; however, how do you go about it? You need to have a basic knowledge of cryptocurrency and how to properly invest.
Thankfully, this is the aim of this blog post. The step-by-step process on how to invest in cryptocurrency will be provided for you.
Furthermore, it might seem like investing in cryptocurrency is difficult, but once you are familiar with the process, it is quite simple. All you just need to do is register for an account, then find a cryptocurrency broker or exchange and find a way to safely store your purchase.
How to Buy Cryptocurrency
If you are a beginner in crypto, you might find the process of buying cryptocurrencies such as Dogecoin, Bitcoin, and Ethereum quite confusing. But the opposite is the case, as it isn’t.
The process is pretty straightforward once you get the hang of it. The steps listed below will guide you on how to start investing in cryptocurrency.
Step 1: Choose a Crypto-Exchange
One of the major steps to take before deciding to buy a cryptocurrency is to choose a crypto exchange or broker. Crypto-exchange is an appropriate option because it provides a wide range of features and lots of cryptocurrencies for trading.
In other words, crypto-exchange is also known as a platform where sellers and buyers meet for a common goal, which is to trade currencies.
On the platform, they have lower fees, which tend to have a more difficult interface with several types of trades and professional performance charts. All this can be quite intimidating for beginners in cryptocurrency.
However, some famous cryptocurrency exchanges include Binance.US, Coinbase, and Gemini. These companies have user-friendly purchase options.
Furthermore, crypto-exchange also allows investors to buy, sell, and hold crypto, enabling them to transfer crypto to their online wallet.
There are several types of cryptocurrency exchanges, and some of them enable users to stay anonymous. These cryptocurrency exchanges provide easy purchase options.
However, this comes with a cost. The beginner option costs more than it would cost to buy cryptocurrency through each platform’s trading interface.
So, if you want to save some money, you can try learning how to use the standard trading platform before buying your first cryptocurrency.
Step 2: Create And Verify Your Account
After choosing the cryptocurrency exchange you want to trade with, you can then register for an account with them. You may also be required to verify your identity, depending on the amount you want to buy and the platform.
Creating and verifying your account is an important step to avoid any fraud and also to meet federal regulatory standards. Therefore, ensure that you complete the verification process, or you might not be able to buy or sell cryptocurrency.
In addition, the platform might also request that you submit a copy of your driver’s license or your passport.
Step 3: Deposit Cash to Start Investing
After creating an account and verifying your identity, the next step is for you to deposit cash and start investing. Yes, you need to have enough funds in your account to be able to buy crypto.
To have enough funds, you will also need to deposit money into your crypto account by making payments with a credit or debit card, linking your bank account, or even by wire transfer.
After depositing money into your crypt account, you might have to wait a few days before you can use the money to buy cryptocurrency.
Also, note that depositing money into your cryptocurrency account with your credit card is both expensive and risky. This is because cryptocurrency purchases made with a credit card are processed as cash advances.
This means that there is a higher interest rate, and the buyers will also be requested to pay extra cash advance fees.
Step 4: Order Your Cryptocurrency
Once your crypto account is credited, you are ready to place your crypto order. There are tons of currencies to choose from. After choosing which cryptocurrency to buy, you can enter the ticker symbol and how many coins you would like to buy.
With several cryptocurrency exchanges, you can buy fractional shares of cryptocurrency.
Step 5: Choose a Storage Method
Cryptocurrency exchanges aren’t backed by protections such as the Federal Deposit Insurance Corporation and are at risk of hacking or theft.
It is even possible to lose all your investments if you can’t remember the codes that you used to access your crypto account.
This is why it is very important to have a safe storage place for your cryptocurrency. Some of the options for storage in hot wallets and cold wallets include:
Hot wallets are also known as online wallets. These are apps on your phones, computers, and even tablets. These wallets generate secured keys to your coins on your device.
Hot wallets are very efficient; however, there is a higher risk of theft because they are connected to the internet. Exchange wallets are personal accounts offered by the crypto exchange.
Holders of hot wallets who have not created string security are at risk of losing their funds to theft. You need to have a strong password, two-factor authentication, and secure internet browsing to keep your account safe. Hot wallets are ideal for small amounts of cryptocurrency.
A cold wallet is not connected to the internet, and it is also at risk of fraud. They are offline wallets that store the user’s private key on anything that is not connected to the internet, and they also have software that enables investors to check their portfolio.
The paper wallet is generated at a specific website that makes both public and private keys that are printed on paper. Several people will laminate these paper wallets and also store them in a safe box at the bank.
A hardware wallet is a USB drive device that also stores private keys safely offline. These wallets have more merit than hot wallets because they can’t be affected by viruses. Thus, cold wallets are the safest way to store your cryptocurrency.
However, it is advisable to know your financial needs and then determine if investing in cryptocurrency is the right choice. If it is, then the steps provided above will safely guide you on how to properly buy cryptocurrency.
How Much Is Needed To Buy Cryptocurrency?
You don’t need to break the bank before you can invest in cryptocurrency. There are several platforms that allow you to buy cryptocurrency with just two units of your country’s currency.