How to Get Your Hands on Some Cryptocurrency

Get Hands on Cryptocurrency

When you’re just starting out in the crypto world, it might be difficult to wrap your head around how to acquire Bitcoin, Dogecoin, Ethereum, and the other cryptocurrencies that are available. To our great fortune, picking up the basics is not too difficult. By adhering to these five simple steps, you will be able to get started investing in cryptocurrencies.

1. Sign up with a Broker or a Cryptocurrency Exchange.

Before you can purchase cryptocurrencies, you will first need to select a broker or a cryptocurrency exchange. Even while both of these options allow you to purchase cryptocurrency, there are some important distinctions between them that you should be aware of.

What exactly is meant by the term “cryptocurrency exchange”?

A cryptocurrency exchange is a marketplace that brings together buyers and sellers of cryptocurrencies to transact business. Exchanges often have relatively low fees, but they have a tendency to have more complex interfaces with many trading kinds and detailed performance charts, all of which can make them scary for inexperienced cryptocurrency investors.

Coinbase, Gemini, and Binance.US are three of the most well-known cryptocurrency exchanges currently in operation. Even if the normal trading interfaces of these organisations can be too complicated for beginners, especially those who have no prior experience trading stocks, these companies do provide user-friendly and simple purchase options.

The convenience, however, does not come without a price, since the beginner-friendly choices charge a significant premium above what it would cost to purchase the same cryptocurrency by using the normal trading interface provided by each site. Before you make your first cryptocurrency purchase—or not too long after—you should probably try to learn enough to be able to use the traditional trading platforms. This will help you save money.

One thing to keep in mind is that if you are new to the world of cryptocurrencies, you will want to make sure that the cryptocurrency exchange or brokerage firm that you choose enables transactions in fiat currencies and purchases made with dollars. Because some exchanges only let you buy cryptocurrency by exchanging it for another cryptocurrency, you would first need to locate an alternative exchange that sells the tokens that your desired exchange will accept before you can start trading cryptocurrencies on that platform.

What Exactly Does It Mean to Be a Cryptocurrency Broker?

The process of purchasing cryptocurrency is made much simpler by cryptocurrency brokers, who provide user-friendly interfaces and handle all of the necessary interaction with exchanges on your behalf. Some of them have more expensive fees than exchanges. Others will tell you they are “free,” but they will make money off of you in one of two ways: either they will sell information on what you and other traders are buying and selling to huge brokerages or funds, or they will avoid executing your trade at the best available price on the market. The cryptocurrency brokerage firms Robinhood and SoFi are two of the most well-known in the industry.

Even though it is impossible to dispute their practicality, you must proceed with caution when working with brokers because you can be subject to limitations on the movement of your bitcoin holdings off the platform. You are unable to move your cryptocurrency holdings out of your account on platforms such as Robinhood and SoFi, for example. Even though this may not seem like a big concern at first glance, experienced cryptocurrency investors typically store their funds in a digital wallet for added protection. For an additional layer of protection, some people opt for physical cryptocurrency wallets that are disconnected from the internet.

2. Make sure your account is set up and verified.

After selecting a cryptocurrency broker or exchange, the next step is to sign up for the platform so that you can open an account. You may be required to authenticate your identity before making a purchase, although this will depend on the platform you use and the amount you intend to purchase. This is a vital step in meeting the standards of the federal regulatory agencies and preventing fraud.

Until you have completed the verification process, it’s possible that you won’t be able to buy or sell cryptocurrencies. It is possible that the platform will require you to provide a copy of your driver’s licence or passport. Furthermore, it is possible that it will ask you to upload a selfie in order to demonstrate that your appearance is consistent with the documents you provide.

3. Put up Money in Order to Invest

In order to purchase cryptocurrency, you will first need to ensure that there are sufficient funds in your trading account. You might fund your cryptocurrency account by attaching it to your bank account, authorising a wire transfer, or even making a payment using a debit or credit card. These are just some of the options available to you. You might have to wait a few days before you can utilise the money that you deposit in order to acquire cryptocurrencies. This is something that will depend on the exchange or broker that you use as well as the method that you use to fund your account.

Here’s one major buyer beware: Although certain exchanges and brokers do allow you to make deposits using a credit card, doing so is fraught with high levels of risk and can be rather costly. Credit card firms treat transactions involving cryptocurrencies as cash advances when the cards are used to make purchases. This means that they are subject to interest rates that are greater than those that apply to conventional purchases, and that you will also be required to pay additional expenses associated with cash advances. When you make a cash advance, for instance, you might be required to pay a fee equal to five percent of the total value of the transaction. This is in addition to any fees that your cryptocurrency exchange or brokerage may charge; these fees alone can run up to 5%, which means you could lose up to 10% of your cryptocurrency purchase to fees.

4. Put in your order for the cryptocurrency

As soon as you have funds available in your account, you are able to place your very first order for cryptocurrencies. There are hundreds of different cryptocurrencies available for purchase, ranging from well-known names such as Bitcoin and Ethereum to less well-known cryptos such as Theta Fuel or Holo.

When you have decided the digital currency you want to buy, you will be able to enter its ticker symbol—the symbol for Bitcoin, for example, is BTC—along with the quantity of coins that you want to buy. You may buy fractional shares of cryptocurrency through the majority of exchanges and brokers, which enables you to buy a small portion of high-priced tokens like Bitcoin or Ethereum that would otherwise cost thousands of dollars to hold.

The following is a list of the 10 cryptocurrencies with the highest market capitalization based on their respective symbols:

1. BTC (Bitcoin) (BTC)

2. Ethereum (ETH)

3. Bind securely (USDT)

4. BNB Coin (Binance Coin) (BNB)

5. Cardana (ADA)

6. Dogecoin (DOGE)

7. XRP (XRP)

8. A US Dollar Coin (USDC)

9. Polkadot (DOT)

10. Uniswap (UNI)

5. Determine the type of storage you will use.

Due to the absence of safeguards comparable to those provided by the Federal Deposit Insurance Corporation (FDIC), cryptocurrency exchanges are susceptible to being hacked or stolen from. It is also possible for you to lose your investment if you forget or lose the codes that allow you to access your account, as has already happened with millions of dollars’ worth of bitcoin. Because of this, it is really essential to have a safe location to keep your cryptocurrency stored away.

As was mentioned before, if you buy cryptocurrencies through a broker, you might not have much of a choice in the manner in which your bitcoin is held, if any choice at all. When you buy cryptocurrencies through an exchange, you give yourself more alternatives, including the following:

• You should not remove the cryptocurrency from the exchange. When you buy cryptocurrency, the digital asset is often kept in a “crypto wallet” that is connected to the exchange where it was purchased. You might take it off of the exchange and into a separate hot or cold wallet if you don’t like the provider that your exchange collaborates with or if you want to relocate it to a site that offers a higher level of protection. It’s possible that you’ll be required to pay a nominal fee in order to carry out this transaction; the amount of money being moved will determine whether or not this is the case.

• Hot wallets. These are crypto wallets that are run on devices that are linked to the internet and kept online, such as smartphones, tablets, and personal computers. Hot wallets offer a number of benefits, but because they are still connected to the internet, there is a greater possibility that they may be stolen.

• Frozen bank accounts Because cold bitcoin wallets are not connected to the internet, they provide the highest level of protection for your cryptocurrency holdings. They come in the form of devices that are connected to the computer from the outside, such as a hard disc or a USB drive. However, you need to exercise caution when using cold wallets because it is possible that you may never be able to retrieve your bitcoin if you either lose the keycode that is associated with the wallet or the device itself breaks or malfunctions. Even while the same thing might take place with certain hot wallets, there are others that are managed by custodians who would assist you in regaining access to your account in the event that you were locked out.

Other Methods Available for Acquiring Cryptocurrency

Investing in cryptocurrencies is an unpredictable and dangerous choice, despite the fact that buying bitcoin is currently a huge trend. If you feel that investing in cryptocurrencies on an exchange or through a broker is not the best choice for you, here are a few alternatives that will allow you to invest in Bitcoin and other cryptocurrencies in a roundabout way:

1. Hold out until there are cryptocurrency exchange-traded funds (ETFs)

ETFs, or exchange-traded funds, are very popular financial instruments because they enable investors to gain exposure to a large number of unique investments with a single transaction. This implies that they offer rapid diversification and are a less risky investment option than investing in individual investments would be.

The demand for bitcoin exchange-traded funds (ETFs), which would enable you to invest in a number of different cryptocurrencies all at once, is quite high. At this time, there are no cryptocurrency exchange-traded funds (ETFs) available to regular investors; however, this may change in the near future. As of the month of June 2021, the United States Securities and Exchange Commission (SEC) was considering three applications for cryptocurrency exchange-traded funds (ETFs) that had been submitted by Kryptcoin, VanEck, and WisdomTree.

2. Put Your Money Into Businesses That Are Linked to Cryptocurrency

Buy the stock of a company that uses or owns cryptocurrencies and the blockchain that powers them if you want exposure to the cryptocurrency market but would rather invest in companies that have tangible products or services and that are subject to regulatory oversight. If you do this, you can still get exposure to the cryptocurrency market. For example, if you want to buy stock in a public company, you’ll need an online brokerage account.

• Nvidia (NVDA). This technological business creates and sells graphics processing units, which are at the core of the rigs that are used to mine bitcoin. These rigs are typically located in remote locations.

• PayPal (PYPL). This payments platform, which was already a popular choice for people purchasing items online or transferring money to family and friends, has recently expanded to allow customers to buy and sell select cryptocurrencies with their PayPal and Venmo accounts. This makes it possible for customers to transact in a wider variety of digital assets.

• Square (SQ). Since October of last year, this payment services provider for smaller firms has made Bitcoin purchases totaling over 220 million dollars. The company made the announcement in February 2021 that Bitcoin accounted for approximately five percent of the cash that was listed on its balance sheet. Additionally, the Cash App by Square gives users the ability to purchase, sell, and store cryptocurrencies.

Before investing in cryptocurrencies or in specific organisations that have a significant stake in it, you should, as is the case with any other type of investment, carefully assess both your investment objectives and your present financial circumstances. A single tweet can cause the price of cryptocurrency to drop, and investing in it is still considered to be a highly risky venture. Cryptocurrency prices can be extremely volatile. This indicates that you ought to engage in cautious and attentive investment.

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