If you’re new to the concept of crypto investment, then the prospect of purchasing and storing cryptocurrencies may seem very new to you. To help you out, here’s an informative guide.
Select a Reliable Broker or Crypto Exchange
To purchase cryptocurrency, you need to approach a crypto exchange or a broker. Although both allow you to buy cryptocurrencies, there are some differences between both. A crypto exchange is a platform where sellers and buyers interact to trade cryptocurrencies.
While exchanges have low transaction fees, they come with a much more complex interface. Moreover, they support multiple trade types with advanced charting tools that make it complicated for new investors.
If it’s your first-time purchasing cryptocurrency, you want to make sure that your preferred exchange allows users to purchase cryptocurrencies with fiat currency. That’s because some exchanges only allow users to purchase cryptocurrencies using other cryptocurrencies. Therefore, you’ll need to purchase tokens from another exchange. Then, pay with the crypto on your desired exchange.
In contrast, a crypto broker provides a much easier interface that deals with the exchange on the user’s behalf. They tend to charge a higher fee than crypto exchanges. And although some claim to be free, they make a profit by selling user information.
Make an Account and Complete the Verification Process
After you’ve decided on what crypto exchange or broker you want to sign up with, it’s time to sign up for an account. Most secure exchanges and platforms have a verification process, which requires you to verify that it’s really you who’s making the account.
As a result, the platform may require you to submit a copy of your passport, state ID, or driver’s license, along with a selfie. This is done to ensure that your appearance matches the photo on your ID.
Keep in mind that this is a crucial step that exchanges are required to do as part of federal regulatory requirements. Until you complete the verification process, you won’t be able to purchase cryptocurrency.
Make a Deposit
To make a purchase, you need to have funds in your exchange or brokerage account. You can make a deposit to your brokerage account using your credit or debit card, authorizing a bank wire transfer, or connecting it to your bank account. Depending on the exchange or broker you’re using, you’ll need to wait for a few days before the funds are in your account and you can make a purchase.
However, keep in mind that even if exchanges and brokers allow users to deposit money with their credit card, it can be quite expensive. Most credit card companies process a crypto purchase as a cash advance. Consequently, they’re subject to much bigger interest rates than your average credit card purchases. Not to mention, you’ll need to pay extra cash advance fees as well.
Place an Order for Cryptocurrency
After you’ve made a deposit, it’s time to make your first crypto order. There are numerous cryptocurrencies to choose from, such as Bitcoin, Ethereum, and XRP. After deciding on the token you want to purchase, you can enter the ticker symbol and make a request for the number of coins.
Most crypto exchanges allow users to purchase a fraction of a cryptocurrency like Bitcoin, which can cost thousands of dollars.
Choose How To Store Your Tokens
Now that you own cryptocurrencies, it’s time to decide how you’ll store it. In this regard, you have a few options to choose from. The first is to leave the coins on the exchange. That means you’re leaving it in a wallet that’s connected to the exchange.
Then, there are hot wallets, which act as online crypto wallets you can access through devices such as smartphones, computers, and tablets. While they’re convenient, they can also be vulnerable to theft. Lastly, you have cold wallets, which aren’t connected to the internet, so it allows for greater security.
Bottom Line
If you want to own cryptocurrency, start by choosing a suitable exchange or brokerage. Then, make an account and verify your ID. After that, you can choose which cryptocurrency you want to buy. After making a purchase, you should decide where to store it.