If you want to begin your crypto journey, you should know that buying any type of cryptocurrency could initially be confusing. However, this shouldn’t be the case. All you need to know is every step involved in the process, and you are already halfway there. Follow these five easy steps to begin investing in cryptocurrency.
Step 1: Select a Crypto Exchange or Broker
This is the first step you have to take to start your crypto journey. While both a crypto exchange and a broker perform the same functions, there are key differences you have to always keep in mind.
A crypto exchange is a space where sellers and buyers come together to trade cryptocurrencies. While these exchanges usually charge low fees, the interface is too complex with evolved performance charts and numerous trade types. There are several prominent crypto exchanges, like Netcoins, Binance, and Coinbase. And all these crypto exchanges’ basic interfaces could be overwhelming for beginners.
Crypto brokers make buying cryptocurrency easier, providing a more easy-to-navigate interface. While they are convenient to use, you may still be faced with some restrictions when transferring your crypto holdings out of the platform.
Step 2: Create an Account
After figuring out which crypto exchange or broker to use, the next step to take is to sign up to create an account. You may also have to confirm your identity depending on which platform you choose and the amount of crypto you wish to buy. This is an important step to meet certain federal regulatory obligations and avoid fraud.
Step 3: Deposit Cash
Before purchasing any cryptocurrency, your account needs to be funded. To put money into your account, you may have to link your bank account to your crypto account, authorize a wire transfer, or use a debit/credit card. Depending on the funding method and exchange or broker you chose, it may take a few days before you can use the cash you deposited. Note that while many brokers or exchanges permit the deposition of money via credit cards, doing this is expensive and risky. A credit card company processes crypto purchases via credit cards as short-term loans or cash advances. Interest rates and extra cash advance payments are involved.
Step 4: Order the Cryptocurrency of Your Choice
You can place your order after the money has been deposited into your account. There are thousands of cryptocurrencies to pick from, starting from popular crypto names like Bitcoin and Dogecoin to other unknown names like Holo and Theta Fuel. Once you’ve made your choice on which cryptocurrency you want, just put in its ticker symbol, like BTC for Bitcoin and ETH for Ethereum, and select the amount you’d like to buy.
Step 5: Get A Storage Method
Crypto exchanges aren’t backed by bodies like the FDIC to ensure their protection. Leaving the cryptocurrency you purchased in the exchange puts it at the risk of hacking or theft. You could lose all your investments in minutes. As such, it’s fundamental to get a safe storage platform for all your cryptocurrencies. There are two storage options for you to choose from; Hot Wallets or Cold Wallets. Do your research and pick the storage option you’d prefer.
Like any other investment, you must analyze your investment objectives and current financial status before making any cryptocurrency investment. Cryptocurrency is volatile, so you should be careful with your investment.