How to Buy Cryptocurrency? Complete Guide For Beginners
The value of Bitcoin has risen 30000% from the end of 2013 to the mid of 2021. Despite this fact, there are always highs and lows in cryptocurrencies and the whole ecosystem. You can not do anything blindly.
Crypto is not controlled by any govt or financial institution. Cryptocurrency mostly depends upon the influencers. A single tweet from Elon Musk can affect the whole crypto market.
How to Buy Cryptocurrency?
Crypto can only be purchased through online exchanges. You need to open an exchange account to buy and sell cryptocurrencies.
Crypto is a volatile market, so experts recommend investing a limited amount of funds and assets in this unpredictable market.
Let’s explore the steps below to buy your first cryptocurrency.
The first step to buying or selling crypto is finding the most competitive exchange where buyers and sellers are present.
Then, as a beginner, you need to check the exchange fees and level of security offered. There are hundreds of crypto exchanges out there, and they are increasing every day.
Binance, Gemini, and Coinbase are some of the most popular and trusted exchanges by crypto investors.
Another important thing is the Crypto wallet. First, you should check whether the selected exchange is offering a Crypto wallet or not. If not, you have to get one on your own.
Platforms like PayPal, Venmo, and Robinhood also give opportunities to purchase cryptocurrencies.
Skrill also offers people to buy, sell and convert cryptocurrencies.
In this way, you would not be able to shuffle your coins to a new wallet, sell them first, and purchase them on the other platform.
Select Payment Options
The second option after finalizing the crypto exchange and creating an account is the payment option. Again, an adequate amount of funds is required to start investing or purchasing crypto.
You can add funds to your account through wire transfer, crypto wallet, PayPal, and using credit and debit cards.
In this way, you will have to pay transaction fees on funds transfer which vary from exchange to exchange, like Coinbase charges a 2.5% fee if you use PayPal for funds transfer. These charges are subject to change.
There is an option to purchase crypto directly through a debit card or PayPal, but the fees may rise even more than buying from an exchange account.
Electronic transfers from bank accounts seem the sensible choice to buy cryptocurrencies.
Make Order For Your Purchase
Once everything is streamlined and you have enough funds in your account, you can place an order. You can do this with a single button click, and you will be the owner of your purchased cryptocurrency.
The number of cryptos you will get depends upon the coin you purchased. For example, if you wish to buy bitcoin for $1000, you will only get some part of the coin sometimes in percentage.
Some crypto exchanges offer built-in wallets, and some have partner programs. You will need a crypto wallet to store and secure your virtual coins.
Storing online wallets is a bit risky to keep crypto-assets. Online platforms are pretty much exposed for hacking attempts, and you could lose them all.
If you need to store your cryptocurrency with a third-party wallet or offline, you may face some withdrawal fees from the exchange.
Some popular exchanges also offer private insurance of crypto assets in the case of any hacking attempt.
If you lose your investment, you may get reimbursement. Most crypto traders are relying on cold storage options (Offline Storage).
If you choose to keep your crypto in a private wallet, you must ensure the private keys. If you lose them, you may lose all assets in your wallet because there is no other way to access them.
Types of Crypto Wallets
There are usually two types of crypto wallets one can use to store coins.
Cold wallets are small, easy to carry, and encrypted USB devices. You can download and maintain your currency in that wallet.
They cost between $100 depending upon the provider and size you require. In addition, cold wallets are considered more secure than any other wallet.
Trezor and Ledger Nano are some of the cold wallet providers. They cost between $60 to $170, depending upon the size of wallet you require.
Hot wallets are online wallets where you can store your crypto coins. Most of the exchanges have digital crypto wallets.
You can purchase and keep it in your exchange account. Your account password must be strong, and two-factor authentication should be enabled.
Hot wallets are more vulnerable in terms of breaches and hacking.
Coinbase, Electrum, Mycelium, and Blockchain are some of the hot wallet providers. Hot wallets enable you to store your cryptocurrency on a laptop,pc, or mobile phone, which can be accessed through private keys.
Mycelium offers mobile-only wallets for android and iPhone users.
Selling crypto-assets is the same as purchasing through an online exchange. You will place the order to sell your coins and will get the current currency rate on sale.
Your crypto assets will be converted to fiat currency which you can withdraw into your bank account, PayPal, and wire transfer.
You can also set a specific cryptocurrency price parameter where your crypto assets will be automatically sold. This way you’ll get some profit from it.
After selling cryptocurrency, it may take a few days to complete the fund’s withdrawal. This is because exchanges make sure that transactions are genuine.
However, you may face some tax on purchasing cryptocurrency.
Crypto is not just a volatile investment market but also a favourite place for scammers and hackers.
They are wandering all there to steal or snatch your money. Therefore, you must be very careful before investing, buying, and selling cryptocurrency.
Always observe the maximum supply of crypto coins and circulation before making any investment.
There are thousands of crypto coins out there. You must be very careful while selecting the best one.
Coin credibility must be taken into consideration. Listen to what the investors, experts, and other community members are saying about that coin.
There are many scams in the crypto ecosystem and never trust the overnight millionaire offers.
Many fraudsters are using pyramid schemes to get attention and rob their investors. Do deep research about the coin you are going to purchase and invest in.
Purchase at the Lowest Price
Cryptocurrencies face ups and downs in days and weeks. So do not buy when a coin is on the rise.
Most of the time, crypto coins face a sudden downfall in value, and you are going to lose your hard-earned money in hours.
Always buy crypto at the lowest price and downfall. There is ultimately a surge expected in the coming days.
For example, if bitcoin is performing well, then be careful in this period. There might be a downfall in the coming days.
Buy and Relax
Due to market volatility, the crypto market is well known for its ups and downs. If you have purchased cryptocurrency and coin face downfall.
However, do not panic during this period and sit back. Just wait for the time of stabilization, and there will be growth in the coming days.
Purchasing crypto might be fun for some, but it is a risky job to do. The prices keep fluctuating day by day. So you should only invest the amount that you can afford to lose.
One can purchase crypto directly from individuals; however, extreme caution is required in such deals.
There are also Bitcoin ATMs operating in the United States where you can buy and sell directly.
Many people think of purchasing crypto through their credit cards which is not a good practice.
The first reason is the high-interest rates imposed by the banks.
The second reason is market volatility.
Always use secure and private data connections for making crypto transactions. For example, using public wifi to buy crypto is not a good idea.
Frequently Asked Questions
What is a cryptocurrency wallet?
Cryptocurrency is stored in secure online or offline wallets. Mostly they are provided by Crypto exchanges.
Crypto wallets are secured by public and private keys.
Is Crypto good for investment?
Crypto is one of the most volatile investments. It is a good investment option, but experts suggest making very little investment in the beginning.
How do I buy Bitcoin?
One can purchase crypto in the following steps.
1. Select an exchange
2. Sign up and verify your account
3. Attach payment method
4. Place the purchase order
5. Store the Bitcoin