Cryptocurrency How To Buy: The NFT space has grown in leaps and bounds over the last year, and it’s become increasingly difficult to navigate the wild world of crypto, let alone find a good place to start.
For most people who are either getting into crypto or NFTs, a crypto exchange acts as square one. An exchange is a platform through which you can change dollars and cents into blockchain bucks. In this guide, we’ll cut through the confusion and take you step-by-step through purchasing your first bit of crypto.
Cryptocurrency How To Buy
Decide where you want to buy crypto
Cryptocurrency – How To Buy: As noted above, when it comes to buying cryptocurrency, you’ll first need to decide what type of platform or service you want to use to purchase crypto. The two most common platforms are crypto exchanges and crypto brokerages. Put simply, a crypto exchange is a platform that allows users to buy and sell cryptocurrencies like Ether, Bitcoin, and Dogecoin. They tend to function a lot like traditional stock markets and brokerage firms, except users trade cryptocurrency instead of stocks.
Set up an account
Cryptocurrency – How To Buy: After you’ve decided on a platform like Coinbase, Gemini, or whatever your preference is, you’ll need to set up an account. More often than not, exchanges will ask you to not only set up and verify your account via email, phone, etc. but also to provide personal information like a picture of your driver’s license or passport.
Although this can seem invasive, you may not be able to make any purchases on the platform until you complete the verification process. Furthermore, following these steps will make the cash-out process simpler if you do hope to deposit funds back into your bank account further down the line.
Fund your account
Cryptocurrency – How To Buy: Of course, crypto isn’t free. You’ll need to spend traditional money in order to purchase crypto. You can go about funding your account in a number of ways. The most common way to get money into your account is to connect it to your bank account. Linking your bank account will allow for the most hassle-free deposit and withdrawal processes.
Make no mistake, initially verifying your bank account can be a lengthy process, but it will make purchasing crypto much easier in the end. Additionally, you’ll also be able to buy and sell directly through your account, rather than depositing money onto the exchange itself. The process to add your bank account will vary, depending on which platform you choose.
Make a purchase
Cryptocurrency – How To Buy: Now that you’ve funded your account, or linked your bank account, it’s time to purchase some crypto. You can now place your first crypto order. An order is exactly what it sounds like creating a ticket with your desired purchase amount and sending it off to be fulfilled. Once you place an order to purchase, say, 0.1 ETH (~$290), the order will be executed at the current best available market price.
For most exchanges, fees will vary anywhere from 0.5% – 5% depending on the type of transaction initiated. Since you’ll more often than not be purchasing fractions of a coin at a time, buy fees will likely remain low. Make sure to double-check the fee schedule of whatever platform you may use – purchasing could be easy, but cashing out might cost an arm and a leg.
Choose a place to store it
Cryptocurrency – How To Buy: Buying cryptocurrency definitely isn’t the end of the process. Now that you have an up-and-running exchange account, you have a wide variety of ways to buy, swap, and store crypto. Sure, keeping your funds in your exchange account is fine if you intend to trade often. However, for added security, you should consider the two most common ways to store crypto: in a software or hardware wallet.
A hot wallet is a crypto wallet that stores its information online and can be run by and connected to devices such as tablets, computers, or phones. A cold wallet is a crypto wallet that isn’t connected to the internet. Information is stored offline meaning that they aren’t great for regular use for trading, but are more secure for storing crypto and NFTs.
Alternate Ways to Buy Cryptocurrency
Alternate Ways to Buy Cryptocurrency: While buying cryptocurrency is a major trend right now, it’s a volatile and risky investment choice. If investing in crypto on an exchange or via a broker doesn’t feel like the right choice for you, here are a few options to indirectly invest in Bitcoin and other cryptocurrencies:
Wait for Crypto Exchange-Traded Funds (ETFs)
Alternate Ways to Buy Cryptocurrency: Exchange-traded funds are popular investments that let you buy exposure to hundreds of individual holdings in one fell swoop. This means they provide immediate diversification and are less risky than selecting individual investments. There is a huge appetite for cryptocurrency ETFs, which allow you to invest in many cryptocurrencies at once. Investors from India need to open a global account or invest via brokerage platforms from an RBI-approved channel. To invest in cryptocurrency ETFs overseas the investors need to transfer the money under the Liberalized Remittance Scheme route.
Invest in Companies Connected to Cryptocurrency
Alternate Ways to Buy Cryptocurrency: If you’d rather invest in companies with tangible products or services that are subject to regulatory oversight—but still want exposure to the cryptocurrency market you can buy shares in companies that use or own cryptocurrencies and the blockchain that powers them. You’ll need an online brokerage account to buy shares in publicly-listed companies such as:
- Nvidia (NVDA) This technology company designs and sells graphics processing units, which are at the heart of the systems used to mine cryptocurrency.
- Square (SQ) This payment services provider for small businesses has purchased Bitcoin worth millions of dollars since October 2020. In February 2021, the firm disclosed that Bitcoin made up around 5% of the cash on its balance sheet. In addition, Square’s Cash App allows people to buy, sell and store cryptocurrency.
How To Sell Cryptocurrency Fast
How To Sell Cryptocurrency Fast: One of the first Bitcoin transactions ever made was made on May 22, 2010. Known globally as ‘Bitcoin Pizza Day,’ it is celebrated to remember the day Laszlo Hanyecz successfully bought two pizzas for 10,000 BTC – around $80 at the time. Hanyecz made the offer on a popular Bitcoin forum and finalized the deal privately with a British man.
Besides how delicious those pizzas were, considering they’d be worth $200 million today, Bitcoin’s value isn’t the only thing that’s grown since 2010. Spending cryptocurrencies is infinitely more straightforward than it was a decade ago, and the number of platforms available that allow you to sell digital assets has skyrocketed in the last few years.
Here are five ways you can cash out your cryptocurrency
Use an exchange to sell crypto
How To Sell Cryptocurrency Fast: One of the easiest ways to cash out your cryptocurrency or Bitcoin is to use a centralized exchange such as Coinbase. Coinbase has an easy-to-use “buy/sell” button and you can choose which cryptocurrency you want to sell and the amount. You’ll quickly exchange cryptocurrency into cash, which you can access from your cash balance in Coinbase.
From there, you can transfer the money to your bank account if you wish. And while Coinbase is a popular option to sell cryptocurrency, it’s likely most useful to go with whatever exchange currently holds your coins, if you don’t have custody of the coins yourself. Some of the top exchanges include Binance, FTX, and Kraken.
Use your broker to sell crypto
How To Sell Cryptocurrency Fast: If a broker holds your crypto coins, then the easiest route is simply to go with that broker.
For example, if you’re a client of Robinhood or Webull, both of which allow extensive crypto trading, then it will be easiest for you to just execute a trade on their platform and be done with it. After you complete the trade, you’ll have the cash in your account and be ready to trade again.
Go with a peer-to-peer trade
How To Sell Cryptocurrency Fast: You can also do a direct trade, selling your cryptocurrency directly to another person through another entity. The most popular way is through a peer-to-peer online platform that allows sellers to find the best offers through an exchange, though one could even do it in person if needed.
With an online peer-to-peer trade, you can sell cryptocurrency online in exchange for dollars. These transactions are often facilitated by an exchange, and Binance runs a well-known online peer-to-peer platform called Binance P2P. After agreeing to a trade, the platform escrows your crypto.
Another popular option is the online platform Paxful. Sellers have the ability to set their own rates and can choose from more than 300 payment options, such as cash, gift cards, or other digital currencies. Clients can sell directly to over 3 million users worldwide, according to the platform’s website.
Cash-out at a Bitcoin ATM
How To Sell Cryptocurrency Fast: Cashing out at an ATM is the equivalent of selling your Bitcoin, says California Bitcoin ATM company Hermes Bitcoin. Bitcoin ATMs are a way to get immediate access to cash using your bitcoins. Bitcoin ATMs do not operate like traditional ATMs. In order to make a cash withdrawal and sell your Bitcoin from the ATM, the machine provides a QR code to which you send your Bitcoin.
You simply wait a couple of minutes and receive your cash. The commissions on Bitcoin ATM trades can be tremendously high, however, so it’s important to note how much you’re paying and whether it’s worthwhile to go another route.
Trade one crypto for another and then cash out
How To Sell Cryptocurrency Fast: Some exchanges do not allow the conversion or selling of some cryptos to dollars, so you’ll need to take an indirect route to get your cash. Depending on which exchange you use, you may need to transfer or convert your cryptocurrency to another popular currency such as the stablecoin Tether, before finally converting to dollars.
How To Store Cryptocurrency Fast
Storing cryptocurrency in a custodial wallet
How To Store Cryptocurrency Fast: A custodial wallet could be considered the default option for crypto storage. A third party holds your crypto for you, either through cold (offline) storage, hot (online) storage, or a combination of the two. When you buy coins from cryptocurrency exchanges, apps, or stock brokers, they typically put it in a custodial wallet they control. If you want to store it yourself, you can transfer it to your own hot or cold wallet.
Many investors use custodial wallets with no issues, and there are advantages to this type of wallet:
- It requires the least amount of work on the user’s part.
- Since your crypto is stored in your account, it’s easy to access if you want to trade it.
- You don’t need to worry about losing a crypto wallet. As long as you can access your account, you can access your crypto.
Storing cryptocurrency in a cold wallet
How To Store Cryptocurrency Fast: A cold wallet is an offline crypto wallet. There are different methods of cold crypto storage, including making your own free paper wallet. But the most common type of cold wallet is a hardware wallet. Hardware wallets are small devices that connect to your computer and store cryptocurrency. They connect to the internet when sending and receiving cryptocurrency, but, other than that, they keep your funds offline.
Here’s how cold hardware wallets work:
- Each hardware wallet has certain types of cryptocurrency it can store. Some can store more than 1,000, while others store a much smaller number, such as Bitcoin and a few others.
- When you connect your hardware wallet to your computer, you can generate an address to receive crypto to the wallet.
- You can send crypto from the wallet to another crypto address.
- Each hardware wallet has a recovery phrase. This phrase allows you to recover your crypto if you lose the device itself. It’s important to keep this safe because anyone who has it could take your crypto.
Storing cryptocurrency in a hot wallet
How To Store Cryptocurrency Fast: A hot wallet is an application that stores cryptocurrencies online. Hot wallets are typically available as desktop and mobile apps, and there are also web-based hot wallets.
Hot crypto wallets have a few notable good points:
- They give you control over your crypto.
- They’re almost always free.
- They’re easy to use. You can send and receive crypto very quickly with this type of wallet.
Storing cryptocurrency in a physical wallet
How To Store Cryptocurrency Fast: A physical crypto wallet, also known as a paper wallet, is another type of cold storage. A paper wallet is a printout of public and private keys, usually as both a string of characters and as scannable QR codes. These keys are how you make cryptocurrency transactions. You receive crypto with a paper wallet using the public keys. To send crypto from the wallet, you would need to scan the public and private keys.
Paper wallets have the same advantage as hardware wallets in that they provide greater security by keeping your crypto offline. It’s also practically free to make your own, so they’re ideal if you want maximum security at the lowest possible cost. The downside is that paper wallets are the least user-friendly cryptocurrency storage. While anyone can follow steps online and make their own paper wallet, hardware wallets have much less of a learning curve.
Frequently Asked Questions (Faqs)
What do you need in order to buy and sell using cryptocurrency?
Bitcoin investors need a cryptocurrency exchange account, personal identification documents if you are using a Know Your Client (KYC) platform, a secure connection to the Internet, a method of payment, and a personal wallet outside of the exchange account.
What is the best way to buy and store crypto?
Coinbase is by far the most popular and one of the best cryptocurrency exchanges because you can invest directly with USD. You can currently purchase Bitcoin, Ethereum, Litecoin, and 30+ other coins and tokens on the platform.
How do you set buy and sell on crypto?
From a web browser, select a market pair (the crypto/crypto or crypto/fiat trading pair).
Is buying and selling price difference in crypto?
Cryptocurrencies are traded on different exchanges and their prices vary depending on the exchange they are traded on.
Can you buy sell and buy crypto on the same day?
The Same Day Rule says if you sell and buy (or buy and sell) the same cryptocurrency in a 24 hour period – your cost basis for the trade will be the price you purchased them for that day.