A Beginner’s Guide to Getting Started with Cryptocurrency Investing
More and more people are choosing to invest and handle their money with cryptocurrencies like Bitcoin and Ethereum. Buying cryptocurrencies may seem confusing if you’re just getting familiar with them. This guide will take you step by step through what you need to know to purchase Bitcoin and similar digital currencies.
What Do We Know about Bitcoin and Cryptocurrency?
You don’t need a bank to use Bitcoin; instead, you can use it to send and receive money over the internet. Cryptocurrencies use blockchain, a safe and shared method for managing all transactions.
Cryptocurrencies use encryption (cryptography) to keep their users’ currency safe. Even though Bitcoin is the top cryptocurrency, other coins such as Ethereum, Litecoin and Ripple (XRP), also exist and are called altcoins.
What is the reason to buy Bitcoin and cryptocurrencies?
- Encouraging Results: Thanks to their rapid price rises, Bitcoin and other cryptocurrencies have become tempting options for investors.
- Cryptocurrencies are not owned by a ruling body, so they offer people a way to bank independently.
- Blockchain technology allows transactions to be both safe and clear.
- Anyone in the world with an internet connection can use cryptocurrencies.
How to Acquire Bitcoin and Other Digital Coins
1. Pick a platform to trade cryptocurrencies.
Getting Bitcoin or other cryptocurrencies requires you to use a cryptocurrency exchange. An exchange allows you to swap your dollars for digital currency online. Some of the biggest exchanges found online are:
- Coinbase
- Binance
- Kraken
- Gemini
While picking an exchange, you should check the types of payments needed, security and how many coins are available.
2. Register on the Website
When you’ve chosen your exchange, you need to create an account. This is what you should usually prepare for:
- Enter an email address and come up with a password.
- All exchanges usually require complete identity verification when handling users’ accounts (to meet financial regulations).
- Enable two-factor authentication to increase your security.
3. Wire your funds directly into your account.
After opening your account, you’ll have to add funds to it. Virtually everyone is able to fund their accounts through:
- Bank transfer
- Debit or credit card
- On a few exchanges, you can buy and sell cryptocurrency using PayPal.
Be sure to know about the deposit fees and how long it will take before you pick a payment method.
4. Pick the Cryptocurrency You Want to Invest In
Once you’ve added funds to your account, you can pick which cryptocurrency you want to purchase. The vast majority of exchanges include Bitcoin, Ethereum and many other major altcoins. You should also consider buying little-known or smaller cryptocurrencies only if you’ve done your homework.
5. Click on the Order Form
When you’ve figured out which crypto to use, you’ll need to order it. Generally, orders fall into one of two categories:
- With a market order, you purchase cryptocurrency at the price it is trading for currently.
- When using a limit order, you determine exactly how much you want to pay for a security. Trading will be finished once the price reaches what was ordered.
6. Protect Your Cryptocurrency Using a Wallet
When you buy cryptocurrency, it’s better to store it in a personal wallet instead of leaving it in the exchange wallet. There are mainly two kinds of wallets available:
- Online wallets which are accessed via the internet, are called hot wallets. You can use cryptocurrencies without much effort, but they might not protect you from hacks.
- Cold Wallets: You store your cryptos on hardware devices which are not connected to the internet. They are safer and better suited for keeping your data long term.
7. Always Watch Your Investment
The prices of cryptocurrencies often change a lot. You need to know that the price of your investment can change very fast and you should watch the market closely. Track the price of cryptocurrencies with special apps and keep yourself informed about news in the market.
Where Should You Invest Your Crypto?
- If it’s your first time in cryptocurrency, start with a small amount to get used to it.
- Learn all you can about the cryptocurrency you are interested in. Read about trends in the market, the main objectives of the project and what the community thinks.
- Don’t fall for offers that look like they are too good to pass up. Use reputable exchanges instead of visiting sites that seem dodgy.
- Make sure to put your money into various cryptocurrencies. Don’t keep all your money in just one coin, to prevent huge losses.
FAQ
Which cryptocurrency should you choose to buy?
Bitcoin and Ethereum have many followers, but you shouldn’t overlook investigating other altcoins for fresh investment opportunities.
How expensive is it to purchase Bitcoin?
Bitcoin’s price goes up and down. Beginning with a fraction of a Bitcoin by spending just $10 is easy.
Can I purchase cryptocurrency using my credit card?
Exchanges will often let you purchase cryptocurrency by credit card, but it could be more expensive.
Is buying cryptocurrency a smart investment option?
You can earn a lot of money with cryptocurrency, but it’s also extremely volatile and risky. Only put your money in investments you are ready to lose.
Is it possible to protect my cryptocurrency?
Safely store your cryptocurrency in a wallet (a cold one is best) and always turn on two-factor authentication on the exchanges you use.
