How to buy cryptocurrency- a complete beginner’s guide in 2021

how to buy cryptocurrency

How to buy cryptocurrency is a question that many people who have just set their foot on the grounds of the crypto market ask.

Are you also one of the beginners who is looking for an answer to that question? If you are, we have an easy guide for you that will tell you what needs to be done to purchase a cryptocurrency.

So, let’s get started!

an easy guide for beginners to buy cryptocurrency

Selecting a cryptocurrency exchange or broker

The first step in this guide for how to buy cryptocurrency is to have a place where you can buy any cryptocurrency you want.

As a beginner, you have two options:

Using a cryptocurrency exchange: A cryptocurrency exchange is a trading platform for cryptocurrencies. Some of the cryptocurrency exchanges are:

  • Coinbase
  • Gemini

Using a cryptocurrency broker: A cryptocurrency broker acts as an intermediary between a cryptocurrency exchange and an investor.

Though a convenient option for a beginner like you who has almost no experience, a cryptocurrency broker may charge you a higher fee for investing on your behalf. Also, some cryptocurrency brokers do not allow you to transfer your funds from their platform.

Some of the cryptocurrency brokers are:

  • Robinhood
  • Interactive broker

Creating an account for yourself

The next step in this guide for how to buy cryptocurrency is to make an account on the cryptocurrency exchange. After you sign up, the cryptocurrency exchange you are using may ask you for your identity verification.

The verification process may require submission of your passport’s copy or driver license’s copy. Moreover, to make sure that the documents you have submitted belong to you, there may be a request for you to submit a picture of your face.

Depositing cash for investment

It is time to invest with the funds you have in your bank account. Make sure that you have enough for buying cryptocurrency. To transfer funds in your crypto account, you can:

  1. Link your bank account to your crypto account
  2. You can make a wire transfer
  3. Make payments using your credit or debit card; credit card companies will charge you higher interest rates for buying cryptocurrency with their credit card.

The method you choose for putting money in your crypto account and the cryptocurrency exchange you are using will determine the time you have to wait for before you can start buying cryptocurrency.

Placing An order

When you are done with the previous step for how to buy cryptocurrency, you can select a cryptocurrency you want to buy and place an order for it. There are many choices available, including very popular cryptocurrencies, such as Bitcoin and Ethereum.

To buy a cryptocurrency of your choice, you have to type the symbol of that cryptocurrency and the number of coins you are thinking to buy. Here are some of the cryptocurrencies with their symbols:

                Cryptocurrency                   Symbol
BitcoinBTC
EthereumETH
Binance CoinBNB
DogecoinDOGE
XRPXRP

Many cryptocurrency exchanges and brokers give you an option to purchase fractional shares of cryptocurrencies that are too expensive.

Storing the cryptocurrency

In this guide for how to buy cryptocurrency, having a storage place for your cryptocurrency is an important step. A broker, who is handling your investment, usually decides how your cryptocurrency should be stored. If you do not have a broker, then there are three ways for you to store your cryptocurrency:

Hot wallet or software wallet: You can have a hot wallet for storage. Hot wallets are connected to the internet.

If you have a mobile, tablet, or computer, you can download a mobile wallet or a desktop wallet. Moreover, the cryptocurrency exchange you are using may provide you with a hot wallet. Exodus wallet and Enjin wallet are examples of hot wallet.

Advantages of hot wallet

  • Easily accessible through the internet
  • Beginner-friendly
  • Free

Disadvantages of hot wallet

  • Can be hacked

Cold wallet or hardware wallet: Cold wallet is a flash drive-like device that can store your cryptocurrency. You can have access to your coins when you connect that device to your computer. Examples of cold wallets are Ledger, KeepKay, and Trezor.

Advantages of cold wallet

  • Hard to hack

Disadvantages of cold wallet

  • Fear of losing or breaking the device
  • Can be expensive

Final Words

Investing in a cryptocurrency is not as hard as it seems, but the decision to invest in a cryptocurrency can prove to be difficult. Before you start your journey as an investor, you need to understand your financial stability. Besides being financially stable, you also need to make sure that the cryptocurrency you are investing in is stable in the crypto market.

If you are fully ready to invest in a cryptocurrency, you can follow the steps we have mentioned above. We hope that the question of how to buy cryptocurrency has been answered through this guide we have written for you.

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