Cryptocurrencies can be defined as digital assets used for trading on the global market on a 24/7 basis. If you want to start trading with cryptocurrencies such as dogecoin, ether, or bitcoin, among others, there are different options for you to consider.
Cryptocurrency is a measurement unit. You cannot duplicate it but can transfer it from one person to another. It is unlike the standard currencies such as the US Dollar that we use daily.
This is because they are neither centralized nor are they physical. They are virtual currencies that can be used just like physical currencies. You can pay for goods and services using cryptocurrencies. The use of blockchain technology makes cryptos the most secure currency we have today.
Guide to Buying and Trading in Cryptocurrencies
Choose a Crypto Exchange or a Broker
The first step to buying cryptocurrencies is choosing a crypto exchange or a broker. You, however, need to ensure that you choose the one that works for you. Trading in crypto is like playing fantasy football where you choose the players that can get the job done for you.
A cryptocurrency exchange can be defined as a platform through which sellers and buyers can trade in cryptocurrencies. One of the advantages of using crypto exchanges is that they are cheap and come with low fees.
However, their interfaces are a little bit complex. This is because of the multiple types of trade that they have. They also come with performance charts that might not be easy to interpret for new traders.
Crypto brokers, on the other hand, work as the middlemen between traders and crypto exchange. They are a little bit expensive compared to the crypto exchanges.
Create an Account
After choosing to use either a crypto exchange or broker, you need to create an account. Here, you should look at different trading platforms and choose one that meets your requirements. This might be dictated by the amount of crypto you want to buy or trade.
In addition to creating an account, most platforms will ask you to verify the account. This is important because it helps these platforms eliminate fraud. They are also required to do so by some regulatory authorities.
It is important to note that some platforms will not allow you to sell or buy cryptos if you have not verified your account. Verification processes are different – some platforms may ask you to share your photo while others ask for a personal document like a driver’s license.
This is the major stage when buying cryptocurrencies. You cannot buy or trade in cryptocurrencies if you do not have money in your account. There are different ways of depositing money, with one of them being adding your bank account to your crypto account.
This allows you to make payments using a credit or debit card or even a wire transfer. You might have to wait for a couple of days before you can use this money depending on the platform you choose to use.
It is important to talk about how to buy crypto with a credit card. This is because it might be expensive and risky at times. Credit card providers assume that purchases for cryptocurrencies are cash advances.
This makes them a little bit more expensive compared to other purchases. You, therefore, need to check with your credit card provider before buying cryptocurrencies.
Place Your Order
Now that you have money in your account, you can proceed to place a cryptocurrency order. Here, you need to first choose the cryptocurrency that you want to buy. There are different cryptocurrencies, such as Ethereum, Holo, and Bitcoin, among many others.
After finding the right cryptocurrency for you, make sure that you know its symbol. For instance, Bitcoin uses BTC. You also need to decide the number of coins you would like to buy.
Since this is your first time trading and buying cryptocurrencies, do not be tempted to use a lot of money buying a lot of coins. Just start with a few coins or a fraction of them. Here, you might find yourself investing a lot of money if you are not careful.
Choose a Method of Storage
Most governments around the globe have not set control or regulatory methods for cryptocurrencies. This puts these currencies at a higher risk of hacking and theft. Cases of people losing their money are very many, meaning that you should be careful.
Fortunately, you can choose a secure method of storage for your cryptocurrencies. However, you might not have this choice if you are using a broker. This is because brokers do almost everything for you.
Those using crypto exchanges can choose to use cold wallets, hot wallets, or just leave the cryptocurrencies on the crypto exchange.
If you follow this guide carefully, you will find it easy for you to buy cryptocurrencies and keep on growing your portfolio with time.