To buy cryptocurrency, first you need to pick a broker or a crypto exchange. While either lets you buy crypto, there are a few key differences between them to keep in mind.
Crypto assets represent an intriguing investment proposition; one which many have already taken advantage of.
If you’ve yet to pull the trigger and purchase cryptocurrency with a view to seeing significant gains, this introductory guide will help you do so without making the same mistakes as other newcomers.
You can Buy Cryptocurrency through a Reliable and Reputable Platform.
First and foremost, you have to make sure that the assets you buy are supplied from a well-respected and thoroughly regulated exchange.
There are lots of less salubrious routes to crypto ownership, but dabbling in the murkier side of the market always leaves you open to exploitation by more experienced third parties.
As this guide from SoFi explains, when you buy cryptocurrencies through one platform that you trust, it’s not just safer, but also much easier to manage your assets.
How to buy Cryptocurrency a safe way to exchange
The convenience comes at a cost, however, as the beginner-friendly options charge substantially more than it would cost to buy the same crypto via each platform’s standard trading interface.
To save on costs, you might aim to learn enough to utilize the standard trading platforms before you make your fist crypto purchase—or not long after.
An important note: As someone new to crypto, you’ll want to make sure your exchange or brokerage of choice allows fiat currency transfers and purchases made with U.S. dollars.
Some exchanges only allow you to buy crypto using another crypto, meaning you’d have to find another exchange to buy the tokens your preferred exchange accepts before you could begin trading crypto on that platform.
What Is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies. Exchanges often have relatively low fees, but they tend to have more complex interfaces with multiple trade types and advanced performance charts, all of which can make them intimidating for new crypto investors.
You need to understand exchange before buy Cryptocurrency.
Some of the most well-known cryptocurrency exchanges are Coinbase, Gemini and Binance.US. While these companies’ standard trading interfaces may overwhelm beginners, particularly those without a background trading stocks, they also offer user-friendly easy purchase options.
Research Coins Rigorously Before You Commit
There are literally thousands of different cryptocurrencies out there, each of which can be chosen as an investment. However, there are major differences between projects in terms of everything from the purpose they are designed for to the amount of energy they consume.
This is where doing your own research is essential, as you would with traditional investments. You should read as much available documentation and independent info on coins as possible in order to make an informed decision.
For a lot of new investors, it makes sense to choose tried and tested assets like Bitcoin and Ethereum, since these have a track record of being a robust investment options. Buy Cryptocurrency after Research.
Be wary of newer coins with limited details available, especially if they promise sky-high returns in a short time period because this is the quickest way to get burned.
Know the Risks
Speaking of the potential for encountering issues when investing in cryptocurrency, there’s no getting away from the volatility that’s innate to the market.
Even supposedly resilient assets like Bitcoin are prone to sizable fluctuations in value, and unless you are comfortable with the possibility that you could recoup less than you originally invested, this is not an area to get into in the first place.
Consider Your Strategy
Every investor should have a solid strategy to support their decisions, and this applies in the crypto space as much as anywhere else.
Which approach you pick will depend on how much time you are willing to dedicate to playing the market and making trades?
For the average investor who isn’t going to spend hours every day juggling their assets around, dollar cost averaging is a recommended approach. You need plan and strategy for better experience of buy Cryptocurrency.
This basically means investing a consistent amount on a regular schedule regardless of market conditions, which leaves you less exposed to peaks and troughs.
Another point to consider is how diverse your portfolio is. If you go all-in on a couple of assets, the fate of your investment is tied to them and it’s generally riskier. However, if you spread yourself too thinly then your gains might be diluted.
Consider Your Aims
With any investment, it is a bad move to put in more than you can afford to lose. For crypto investors, the aforementioned volatility makes this more likely than in other markets.
You must have a clear idea before invest or buy Cryptocurrency.
However, play your cards right, plan carefully, and you may come out on top. This is a matter of setting goals and being willing to pull out once you’ve hit them, rather than holding assets indefinitely irrespective of your original intent.
Place Your Cryptocurrency Order
Once there is money in your account, you’re ready to place your first cryptocurrency order. There are hundreds of cryptocurrencies to choose from, ranging from well-known names like Bitcoin and Ethereum to more obscure cryptos like Theta Fuel or Holo.
When you decide on which cryptocurrency to purchase, you can enter its ticker symbol—Bitcoin, for instance is BTC—and how many coins you’d like to purchase.
With most exchanges and brokers, you can purchase fractional shares of cryptocurrency, allowing you to buy Cryptocurrency a sliver of high-priced tokens like Bitcoin or Ethereum that otherwise take thousands to own.
The symbols for the 10 biggest cryptocurrencies based on market capitalization* are as follows:
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Binance Coin (BNB)
- Cardana (ADA)
- Dogecoin (DOGE)
- XRP (XRP)
- USD Coin (USDC)
- Polkadot (DOT)
- Uniswap (UNI)
*Based on market capitalization as of June 28, 2021
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’s are a few options to indirectly invest in Bitcoin and other cryptocurrencies:
Wait for Crypto Exchange-Traded Funds (ETFs)
ETFs are extremely popular investment tools that let you buy exposure to hundreds of individual investments in one fell swoop. This means they provide immediate diversification and are less risky than investing in individual investments.
There is a huge appetite for buy Cryptocurrency ETFs, which would allow you to invest in many cryptocurrencies at once. No cryptocurrency ETFs are available for everyday investors quite yet, but there may be some soon.
As of June 2021, the U.S. Securities and Exchange Commission (SEC) is reviewing three cryptocurrency ETF applications from Kryptcoin, VanEck and WisdomTree.
Invest in Companies Connected to Cryptocurrency
If you’d rather invest in companies or want to buy Cryptocurrency with tangible products or services and that are subject to regulatory oversight—but still want exposure to the cryptocurrency market—you can buy stocks of companies that use or own cryptocurrencies and the blockchain that powers them. You’ll need an online brokerage account to buy shares of public companies like:
Nvidia (NVDA). This technology company designs and sells graphics processing units, which are at the heart of the systems used to mine cryptocurrency.
PayPal (PYPL). Already a popular choice for people buying items online or transferring money to family and friends, this payments platform recently expanded to allow customers to buy and sell select cryptocurrencies with their PayPal and Venmo accounts.
Square (SQ). This payment services provider for small businesses has purchased over $220 million in Bitcoin since October 2020. In February 2021, the firm disclosed that Bitcoin made up around 5% of the cash on its balance sheet. In addition, Square’s Cash App allows people to buy, sell and store cryptocurrency.
As with any investment, make sure you consider your investment goals and current financial situation before investing in cryptocurrency or individual companies that have a heavy stake in it.
buy Cryptocurrency or Cryptocurrency can be extremely volatile—a single tweet can make its price plummet—and it’s still a very speculative investment. This means you should invest carefully and with caution.
It’s easy to get caught up in the hype surrounding crypto, but if you’re looking at it as a long-term investment rather than as a get-rich-quick scheme, you can afford to take your time and choose where you put your cash with care.