How to buy Cryptocurrency for the first time? Where is the best place to buy Bitcoin, Ethereum and Altcoins?
Learn where to purchase Crypto, how to store Crypto and how it all works.
In this Course:
1. How does buying Cryptocurrencies work?
For most, buying cryptocurrency for the first time is a daunting experience, yet it is actually very simple as long as you follow these key steps:
- Choose an exchange.
- Create and verify an account.
- Choose what you want to buy.
- Placing the order
- Managing your crypto
2. Choosing an Exchange
Cryptocurrency exchanges are the places where you can directly buy almost any Cryptocurrency you desire. They are centralised platforms that make it easy to buy, store, sell, and trade your coins.
Some of the biggest and most trusted exchanges include:
- Binance
- Crypto.com
- Coinbase
Of course, it’s worth considering what cryptocurrencies your exchange lists. You can do this by finding your chosen currency on Coinmarketcap.com, then clicking into markets and seeing which market exchanges are currently offering that coin.
A lot of the big exchanges will only offer the bigger, more well-known currencies. For smaller currencies, it’s worth checking out exchanges like Kucoin, Huobi, and Gate.io.
Now that you know what exchanges there are to choose from, now comes the part where you decide which one is the best for you.
Binance – This is the world’s largest crypto exchange, with a user-friendly interface and just about any big crypto listed you may desire.
Crypto.com – Their exchange can be quite daunting, but their mobile app makes payments simple, and they list many cryptocurrencies with simple interfaces.
Coinbase – A user-friendly, very large, and trusted exchange with not too many listings but many of the big-name cryptocurrencies.
The best exchange?
Our choice would be Binance. Due to its simplicity, being the world’s largest exchange, and having just about all the tools and Crypto’s you may desire at your disposal.
3. Creating and Verifying your account
Now, once you’ve decided on your exchange, whether it be Binance, Coinbase, or Crypto.com, next comes the account creation. It’s worth noting the majority of these large exchanges require age verification and address verification, so it’s important you have valid proof on hand.
First, sign up with a secure email account and a secure password. This is imperative if you are going to store your funds on this account to prevent being hacked.
Second, ensure you set up two-factor verification, whether it be through a Google Authenticator app, through text messages, or through email; it’s an important precaution to take for ensuring safe funds.
Third, use your driver’s license, bank statements, passport, or whatever means necessary to validate your identity to the exchange. Crypto is illegal in some countries, so it’s important you take these steps to prove to the exchanges that you are an eligible investor or trader.
That’s it; you should be all set to login and use the features of your chosen exchange.
4. Choosing what you want to buy
Now this is where all the content that is provided on Cryptoreviewing.com/reviews will really come in handy. On our website, we have created full, in-depth reviews of many different cryptocurrencies and rated them as investments. We cover all things like: roadmap, team, marketing, utility, community, tokenomics, partnerships, exchanges, and overall scores out of 10. These are all imperative factors to consider when investing, as each component can impact the success of a cryptocurrency project.
What you want to buy also depends on your intentions, so you should decide whether you are investing for the long term in really strong fundamental coins or whether you are making short-term trades with coins you think will do well over a shorter period.
For example, coins like Ethereum and Bitcoin will most likely be safe bets in the long run, so if you wish to make a long-term investment, you’d be looking at coins like these. If you are looking for short-term trades, you’d find coins that have upcoming events and partnerships that may pump the price.
Overall, as long as you buy cryptocurrencies that follow our guidelines of strong fundamental values and use cases, you should see a high return on investment in the long run.
5. How to place the buy order
There are two main types of ways you can buy Cryptocurrencies, these are: Market buys and Limit buys.
Market buys
Market buys are the easiest and most common way to buy Cryptocurrencies. In simple terms, this means buying at the exact price that the exchange currently lists the Cryptocurrency at.
Example
If you were to buy $1,000’s worth of bitcoin, while Binance lists the current price of bitcoin at $10,000, you would receive 0.1 bitcoin in return. This is calculated by dividing the amount spent, $1,000, by the current market rate, $10,000, which equals 0.1 bitcoin.
Limit Buys
Limit buys are the second method. This is a method that can be used if you wish to get a better price than the current market rate. It involves setting a limit price, so a price at which you wish for a buy order to be executed, which will only be executed if that specified price is hit. The advantage of this is that you can get better entry prices into cryptocurrencies when there are market dips, yet it leaves an element of risk of missing out on the order at all.
Example
If Bitcoin is currently worth $10,000, you could set a limit buy order for $1,000 worth of Bitcoin to be bought when Bitcoin reaches $5,000. If Bitcoin’s price drops to $5,000, the order would be activated, and you would receive 0.2 Bitcoin at a market rate of $5,000. However, if the price never goes as low as $5,000, that buy order will never be placed, and your $1,000 will simply just sit in your account.
6. What do you do once you’ve bought the crypto?
Once you’ve successfully purchased your Cryptocurrency, what you do next depends on your goals. You can either choose to hold the investment long-term, or keep on the exchange to trade in the short term. Here are some of the options for each of these goals:
Long-term holding
One thing you can do is simply nothing. Keeping your funds sat on your digital wallets in the exchanges until you are ready to sell, is totally acceptable. However, it is worth noting the risks of this. Over the past few years, a small number of digital wallets kept on exchanges have been susceptible to being hacked. This is because they are centralised storage methods, and all hackers need is your password and email to access your funds. Unlike banks, these exchanges do not have regulations in place yet, so your funds could be at risk.
Cold wallet storage is the safest and most recommended method of storage for crypto. Ledger Nano X devices are what the majority use, essentially an offline USB storage device, where you can send and store your Crypto away from online attacks. You set up the device with your own password and personal recovery phrase, which are very important and must not be forgotten if you wish to access your funds. Keep your device in a safe place and your password too, and your funds will be more secure than ever!
Online staking is another option for your crypto funds. Staking is essentially where you volunteer to take part in the crypto network by delegating and locking your crypto in an online wallet, and you receive a reward for doing so. For example, Ethereum offers staking, with a minimum of 32 ETH delegated, where you receive an 8% APY reward just for your crypto sitting there—a nice way to stack on potential gains!
Short-term holding
One method for short term holding is setting limit sell prices for levels that you want to take profit at. This is the same as limit buys, where you have a target price where you buy the crypto, yet reverse it where you choose to sell the crypto once this level has been met. The advantage of this is that you don’t have to constantly watch the market and wait for these levels to be met to realise some of your profit.
Additionally, short-term holds should have stop-loss sell orders in place. As crypto is a very new and volatile asset class, it is possible to lose a lot of money in a short period of time. To prevent this, you can choose sell levels, where if that price is hit, your crypto will be sold automatically, essentially preventing huge losses from being made.
You’re set to go!
That’s it; that’s everything you need to know about buying cryptocurrencies as a beginner. You’re now set to start building your ideal portfolio; good luck!
