Crypto

How Do I Purchase Cryptocurrency?

How Do I Purchase Cryptocurrency?

Many individuals might be pondering on the way to acquire cryptocurrency if they have been monitoring the crypto economy closely. Many might believe that investing in cryptocurrency is too difficult or that it is too late to catch up.

However, the fact of the matter is that it’s not too late or too difficult. This is an excellent time to begin purchasing cryptocurrencies, and when you do, you’ll realize how effortless it can be.

What exactly is Bitcoin?

Out of the many cryptocurrencies, Bitcoin is regarded as the most popular. However, a lot of people have come across the word, yet many don’t know what it might be. The simple truth is that Bitcoin was the first extensively used cryptocurrency in the world. Satoshi Nakamoto published a whitepaper in 2008 in which he detailed the fundamental idea of Bitcoin. It is a virtual currency that enables securely encrypted peer-to-peer transactions without relying on the existing banking system.

This concept took up quickly, and Bitcoin is today valued at around roughly $55,000 per BTC. Even today, knowing it was a trivial amount at the beginning, it’s easy to understand the investment opportunities.

Investing in Bitcoin or Going for Altcoins

Certain investors believe Bitcoin is the king and will not buy anything else. Indeed, there’s nothing wrong with that mindset. There are, however, thousands of additional coins known as altcoins that you should be on the

Nobody knows if these coins will ever surpass Bitcoin, but it might not matter. Many of these coins have proved time and time to be good investments, providing exceptional returns to individuals who have purchased them.

There’s no rationale you can’t invest in Bitcoin and altcoins at the same time. The goal is to conduct a thorough study to assess the value of each coin under consideration. However, it is important to point out that not every new product is a hit, but those that do can make a significant difference in your financial security.

Understanding The Distinctiveness Between Stock Market and Cryptocurrency Market

Although the cryptocurrency market is not the same as the stock market, certain parallels can help you grasp how it operates.

Stocks are typically issued by businesses and are backed by the predicted profits of those businesses. Cryptocurrencies, on the other hand, are created by anyone who wants to create their blockchain ledger.

This implies that calculating the price of a stock is just a subject of math. Determining the worth of a cryptocurrency is a little more difficult. Value is determined in part by the utility and in part by other considerations, even those that are entirely personal.

Stocks are sold to raise funds for the firm that is selling them. This money aids the company’s expansion. Cryptocurrencies serve a variety of uses. A blockchain project could be for games, NFTs, DeFi, or something else entirely.

Cryptocurrencies are also thought to be more unstable than stocks. If you pay attention to the two, you’ll notice that cryptos experience huge climbs and stomach-turning decline.

What’s noteworthy is that if you look at the general trajectory of a cryptocurrency, you’ll almost certainly see that it has risen. Despite its unstableness, Bitcoin has increased faster than any other stock. Innately, this does not occur with every new cryptocurrency, hence why you should do your homework before investing in any altcoin.

What is a Cryptocurrency Exchange, and how does it work?

A crypto exchange is a virtual marketplace where you may trade your fiat currency for the cryptocurrency you want to buy. Some exchanges may provide additional benefits to entice you to choose them over others.

Being sure, there are a lot of exchanges to pick from, and the choices can be confusing. Feel free to take your time. Take a while to study about each exchange so you can pick the one that best suits your needs and degree of experience.

What is the Best Way to Purchase Cryptocurrencies?

If you’re contemplating how to acquire cryptocurrencies, you’re probably also a little apprehensive about making your first transaction. You’re not the only one who feels this way! Everyone is nervous the first time since it’s so new, but once you’ve made your first purchase, you’ll find it’s a lot easier than you anticipated.

Begin small. If you simply invest a few dollars in a single asset, you are less likely to be unhappy if you make a mistake than if you invest hundreds of dollars. Keep in mind that you can purchase a fraction of a coin. People often believe they won’t be able to buy Bitcoin since they don’t have $40,000 or more to spend on a single coin. The truth is that you can buy $10 worth of Bitcoin for $10.

  • Make a decision on a cryptocurrency exchange

Choosing an exchange is the first step in purchasing cryptocurrency. Some of the most well-known and secure exchanges include Coinbase, Gemini, eToro Robinhood, and Webull, but they aren’t the only ones.

Avoid new exchanges until you are certain they are well-established and trustworthy. If you’re new to cryptocurrency, Coinbase is a terrific place to start. They have a very user-friendly interface and over 50 cryptocurrencies to invest in and trade.

  • Make a user account

You’ll need to create an account once you’ve decided on your exchange. While each exchange may be set up slightly differently than the next, the fundamentals remain the same.

To begin, go to the signup page and enter your email address as well as a secure password. After that, you should receive an email containing a code that you must enter on the website. This checks the validity of your email address.

After you’ve been authenticated, you’ll probably be asked to set up two-factor authentication, also known as 2FA. This is necessary to provide your account with an additional layer of security. You don’t want someone else to gain access to your account and steal your important possessions, after all.

Before you can make your first purchase, you’ll need to complete one more step. KYC stands for “Know Your Customer” and refers to the process of validating your identity to guarantee that you are who you say you are. You’ll be requested to provide proof, which will normally consist of a photo of your driver’s license, passport, social security card, or another kind of identification. A photo of you carrying your driver’s license may also be required by some.

This stage usually lasts only a few minutes, but you may be requested for more information on occasion. Do not be alarmed by this. You’ll be able to make your first purchase sooner if you provide them with the necessary information.

  • Make a deposit into your account

You can finance your account now that you’ve been confirmed and approved. Frequently, all you need to do is link your account to your bank account. You can also use a credit card at some exchanges.

You can now deposit the amount that you feel confident with, regardless of which method you utilize. It’s fine to start small and work your way up till you’re comfortable.

  • Purchase what you want

You can make your first buy now that your account is funded. For the most part, this is only a small amount of whichever cryptocurrency they’ve chosen to begin with. You’ll soon understand, though, that this is simply the beginning.

A market order is when you place an order to purchase or sell bitcoin at the current market price. A limit order, on the other hand, is used when you only wish to purchase or sell at a specified price. A stop-limit order is one in which a pre-determined stop price initiates a buy or sell order at a limit price.

Trading pairs, such as Bitcoin/Ethereum or Bitcoin/Litecoin, are also available. The “base currency” is the first currency listed in the pair. The “quote currency” or “term currency” is the second currency.

Alternatives to Buying Cryptocurrency

There are a few additional options for purchasing cryptocurrency without using an exchange. Some individuals believe that these are safer ways to shop, but that does not mean that they are better.

If you fund through Grayscale trust, for instance, you must pay an annual fee, therefore the trust’s worth decreases over time. Grayscale also trades only when the stock exchanges are open. So if bitcoin has a significant drop over the weekend, you’ll be trapped until Monday.

Grayscale EFTs are comparable to Crypto EFTs. Both allow you to invest in cryptocurrencies through brokers rather than doing so yourself. While this may appear to be a wonderful deal, you will have to pay a cost for this service. Furthermore, you are not the owner of the coin. You’re merely a stockholder. This implies you won’t be able to trade or take advantage of decentralized financing.

You’ll have to decide whether the costs and rewards of the “simple” technique of getting into crypto are worth it.

Conclusion

The major question that comes to mind after reading this article is whether you should invest in cryptocurrencies? To be honest, you’re the only one who can respond to that question.

Cryptocurrency is and will likely remain unstable for a long time. But, if you evaluate where it began to where it is today, you can see how much it has progressed. Crypto is not a passing craze; it is here to stay.

If you decide to enter the world of cryptocurrency, make sure you do your homework and never invest more than you can afford to lose. Also, because crypto is ever-changing and ever-growing, take advantage of every opportunity to be informed about the market. You don’t want to ignore a single detail that might ultimately cost you.

The Author

Oladotun Olayemi

Dotun is a financial enthusiast who specializes in first-in-class financial content, including crypto, blockchain, market, and business, to educate and inform readers.