At this point, you might have already learnt the crypto lingos, recognized the risks and achieved your other financial priorities. The next stage for you is probably to buy and invest your cryptocurrency. In this article, I will provide a comprehensive guideline that will help you invest effectively. My guidelines will also encompass a number of recommendations on some of the available safety practices within the crypto space. Come with me.
Here is how we buy it.
1. Choose your Cryptocurrency
The first step to buy your cryptocurrency is to decide what you want to buy. Some of the most traded coins include Bitcoin, Ethereum, Dogecoin, Litecoins, Cardano and XRP. Before investing, have a better understanding of the possible benefits and drawbacks of each coin. Currently, Bitcoin and Ethereum are the most famous, and have received a greater level of acceptance globally. We advise that you go for either
2. Choose an Exchange
Cryptos cannot be bought through your bank or any investment agency. However, there are organisations which are working on the same towards such a future possibility. That said, there are a number of cryptocurrency exchange platforms that will enable you get your coins. You should be extremely cautious when choosing you’re an exchange platform.
A perfect rule of thumb is to utilise more established exchange platforms that have developed indisputable reputation and trustworthiness. We recommend a number of exchanges such as Etoro, Binance, and Plus500. However, we still advise you do conduct your own research to know which exchange suits your financial objectives. You can refine your search for the right exchange based on a number of factors such as security, fees and available coins.
3. Decide a payment option and then Fund your account
The next step will entail settling on your most preferred payment option and consequently funding your account. You should know that different exchanges have differences when it comes to the terms of payment methods they accept. Depending on whichever exchange you have settled on, you will need to provide a number of information such as your identity and income source and other crucial details.
By design, most exchanges will enable you to connect your bank account or debit card to the exchange account. With this, you will be able to make payments in other fiat currencies. Certain fees will be charged depending on which method you have decided to choose. Bear in mind that funding your account differs from buying your coins. Once you have funded your account, you will then need to exchange your dollars for Bitcoin.
4. Place your orders
Once you have connected a payment method, placing your orders should be the next step in this case. However, note that this process may differ depending on the exchange platform you decide to choose. Ideally, the fees charged can differ as well based on this factor.
You will realise that there are exchanges that will allow you to purchase or sell BTC by just pressing the “BUY”, “ACQUIRE” or “SELL” button, and subsequently entering the amount that you want to buy (or sell). Many will provide three basic order types, which include Market Order, Stop Order and Limit Order.
It is extremely easy to navigate through some of these accounts. You can just click your exchange’s home screen to access the three menus. Each section has Buy and Sell options and you can always place your order at the same time.
With Bitcoin, you are likely to purchase only a fractional share of a coin. This is because a single Bitcoin trades for nearly $21,500 during the month of September after a huge crash in June. Any amount you decide to put will be reflected as a percentage of the total Bitcoin. For example, if you invest $1000 today at Bitcoin’s value of $21,500, your account will show 0.0465 of Bitcoin.
Exercise Safe Storage of Your Coins
Although it is true that Bitcoin exchanges are becoming safer because of the blockchain technology, the investment is still generally tarnished with numerous cases of hacking and fraud. Many exchanges out there will allow you to store your investment in an account. If you’re a beginner, this should be extremely easy for you. However, maximum and guaranteed security for your funds is only possible with the cryptocurrency wallet. By definition, a cryptocurrency wallet is a place used to store digital currencies and possess varying levels of securities. Broadly, the following types of wallets exists:
- Hot wallet: This wallet exhibits a number of similarities to your everyday physical wallet. It is ‘hot’ in the sense that you have regular access to your digital currency.
- Cold Wallet: For this, your digital currency is stored for a long period, in a fashion similar to storing money in your bank account. The level of security here is high, and can protect from any potential online attackers and malware.
- Hardware wallet: Here, you can store your digital currency in physical devices like an external hard drive or USB disk. Be sure to purchase your devices from legitimate companies.
Final Take Away
Although investing in cryptocurrency can initially look complicated, it only requires a little knowledge and insights, which I am sure you will get from this article. Thousands of different cryptos currently exist. The values of cryptocurrencies also fluctuate by hours and this is more common for the lesser-common coins. Even the cryptocurrencies like Bitcoin and Ethereum that are well established have also experienced their share of volatility. With the information in this article, you must now be gearing up to buy your first Bitcoin cryptocurrency. We wish you all the best in your new investment.