How to buy Cryptocurrency: What you need to know?
Cryptocurrency is redefining the financial system; thus, many investors are keen to become part of the crypto foray but need to learn how to buy Cryptocurrency like Bitcoin, Ethereum, Dogecoin, or any other.
Thankfully, it is straightforward to learn the rope. You can easily buy cryptocurrency by following a simple five-step series, which will outline later in this article.
However, before jumping into the crypto ocean, remember your capital is at risk since it is purely a speculative market. You may lose some or all of your investment. So, thoroughly read the risks associated with the crypto trade before making a decisive move.
Contrarily, investors who have an eye for the future are making handsome gains from cryptocurrency, so with high risk, you can also generate high profits.
Let us move forward toward our main topic – how to buy cryptocurrency.
Step-by-step Guide to Buy Cryptocurrency
Buying crypto coins are divisible into five steps:
Step 1: Select a Crypto Exchange or Broker
First, you need to choose a crypto broker or exchange, as multiple outlets offer trading services. It is vital to have the right one best suits your requirements.
Additionally, they may seem the same on paper, but broker and exchange have few differences, so let us first try to understand each one.
What is a Crypto Exchange?
An exchange is where buyers and sellers come together to trade cryptocurrencies. Crypto exchanges offer sophisticated interfaces, advanced charts, and multiple trade types that become difficult for beginners to understand and follow.
A few famous cryptocurrency exchanges are Coinbase, KuCoin, WazirX, and CoinDCX.
What is a Crypto Broker?
A crypto broker is a person who acts as a middleman between the investor and the exchange by offering trading services to its clients. It is usually costly compared to exchange since it helps investors deal with it.
So, based on your requirement, you can choose a broker or an exchange. Once you have selected your trading partner, you can move on to the next step.
Step 2: Create an Account
Here you need to open and verify your account with your desired broker or exchange. You may have to provide details depending on the amount you plan to invest and the platform. It is essential for security purposes and to prevent potential fraud.
Similarly, you must open your account with a verification process. It is generally known as KYC (Know Your Customer). You may have to provide a driver’s license, passport, or valid ID to complete the verification process.
Step 3: Deposit Cash for Investment
Once your account is set up and activated, you must transfer fiat money (USD, Euros, etc.) to your account.
You can quickly transfer money by linking your bank account with the crypto account. You can also use your credit or debit card to make a deposit. Similarly, you can use apps like Venmo or PayPal to make a deposit.
Step 4: Place your Cryptocurrency Order
After making a money deposit, you can make your first cryptocurrency order. You can choose from hundreds of different cryptocurrencies, like the well-known Bitcoin and Ethereum, to obscure ones like Holo or Theta Fuel.
Placing an order is a simple process; all you need to do is:
- Choose desired cryptocurrency from the exchange’s website or mobile app (if available).
- You can search crypto by its name or ticker symbol, for instance, BTC for Bitcoin.
- Enter the amount of cryptocurrency you want to buy or the amount you want to spend on a particular crypto.
- Click Buy button
- Receive cryptocurrency in your digital wallet
Step 5: Store Cryptocurrency
Lastly, storing your cryptocurrency in a safe or wallet is essential. Since there is a risk of spam or hacking, having a secure wallet is key to saving your cryptos.
Usually, crypto exchanges offer wallets to store your purchases, but this is different with a broker. So, having a private digital wallet is crucial and can provide peace of mind with your crypto purchase.
There are three types of digital storage facilities available in the market. Each one of them has its pros and cons; let us explore all three of them.
Leave crypto with the exchange
You can leave your purchases with them by trusting your exchange. It will hold your cryptos and may charge fees for storage services.
However, if you do not want to leave it with your trade partner, you can quickly transfer it to your digital wallet.
There are further two types – a hot wallet or a cold wallet.
Hot wallets
The type of crypto wallets that store coins online and run on internet-connected devices like phones, computers, or tabs. Hot wallets are convenient and price-effective; however, they are prone to hacking since they always have an internet connection.
Cold wallets
Contrarily, cold wallets are only connected to the internet once you want to make a transaction. Therefore, these are more secure but usually cost more than cold wallets. Examples of cold wallets include a USB drive or a hard drive. However, you need to remember a key for your cold wallet, which, if lost, will also lose your cryptocurrency.
Alternate ways of buying Cryptocurrency
In addition to buying cryptocurrencies from a broker or exchange, you can get your hands on cryptos through alternate options discussed below.
- Through Exchange-Traded Funds (ETFs)
ETFs work just like mutual funds, which means you can buy cryptos in one fell swoop rather than buying them individually. Therefore, ETFs are less risky and offer diversification.
- Invest in Crypto-related companies
You can get cryptocurrency by investing in companies related to the crypto business. You will earn cryptocurrency in return and thus get into the crypto metaverse, for instance, Nvidia and Square.
Frequently Asked Questions
Who controls crypto?
Since crypto is a decentralized financial system, thus there is no single controlling authority behind cryptocurrency. Some elements have limited control, but no single unit controls cryptocurrency.
Cryptos have revolutionized the way finance acts, thoroughly shaking the basics of the traditional financial system. Further, it is a democratized platform that provides more power to individuals than governments or controlling institutes.
Yes, cryptocurrencies can merge. However, it is a rare happening. Recently, Ethereum Mainnet and the Beacon Chain joined and changed the Ethereum blockchain to a proof-of-stake system.
How to sell cryptocurrency?
You can sell cryptocurrency by following all the steps of the buying process. However, select the Sell option on your exchange’s website or mobile app when selling your cryptocurrency.
Can I buy cryptocurrency on my own?
Generally, it would help if you involved an exchange or broker buying cryptocurrency.
Parting Thoughts
Buying cryptocurrency is a straightforward affair. You can easily find your way into the crypto garden. However, stay alert for scams and hacking thorns.
All you need is to open an account with a broker or exchange, buy cryptos by depositing fiat money in your account and then store cryptocurrency in a digital wallet.
However, conducting thorough research on risks associated with the crypto market is a pivotal factor before inducting into the crypto business. Since it is highly speculative and volatile, thus seeking professional advice is highly recommended to avoid potential losses.
We hope you enjoyed reading our take on how to buy cryptocurrency. So, good luck with your purchase. Adios!