How To Purchase Bitcoin (Everything You Need to Know)
The next step in crypto investing is actually purchasing crypto once you’ve learned the lingo, accepted the risk and met other financial priorities.
Many cryptocurrencies exist, but experts suggest you avoid most of them, at least for now. Cryptocurrencies’ values fluctuate hourly, and this is especially true for lesser-known coins. The most established cryptocurrencies, such as bitcoin and Ethereum, also experience volatility, but their value has increased over time.
The most valuable cryptocurrency on the market is bitcoin, and with prices reeling in both the stock and crypto markets, now might be a good time to invest if you’re comfortable with the risks.
How To Purchase Bitcoin
Choose an Exchange
Banks and investment firms cannot currently purchase bitcoin, but some organizations are working towards it. For now, you’ll have to go through a cryptocurrency trading platform to exchange your U.S. dollars for Bitcoin or other digital currencies. As of now, your U.S. dollars must be exchanged for bitcoins or other digital currencies through a cryptocurrency trading platform.
You can buy crypto on hundreds of exchanges, but these are some of the most common ones. The most popular cryptocurrency exchanges are Coinbase, Gemini, and Kraken. The exchanges are online platforms that allow you to buy and sell cryptocurrencies.
Fund Your Account
If you choose to create an account with an exchange, you may need to provide information such as your Social Security number, ID, and your source of income.
Almost all exchanges will allow you to fund your exchange account using a bank or debit card with U.S. dollars. Depending on how you fund your account, you may have to pay different fees – bank transfers are usually less expensive than credit cards.
The process of funding your account is different from purchasing crypto. It is always wise to invest your uninvested money rather than leaving it in your account uninvested. Your dollars must still be converted into Bitcoin once you have funded your account.
Place an Order
Following the connection of a payment method, you will be able to order Bitcoin. The process can differ depending on which exchange you use.
When you use a platform like Coinbase or PayPal, you can simply enter the amount in dollars you want to trade for Bitcoin and then buy at the current rate (after any fees).
Market and limit orders may be available on exchanges that are designed for active trading – such as Coinbase Pro. By placing a market order, you buy the cryptocurrency at the current market price at that moment. If you place a limit order, you specify the price you want to buy cryptocurrency. The currency will be automatically purchased once it reaches that point.
The last part of our guide covers trading fees and margins. Trading fees are one of the few things that can affect your returns. Most exchanges offer free trades and very little trading fees. However, some charge a small percentage of each trade, usually between 0.25% and 1%. A few also charge a flat fee of $15 or more per trade. For most traders, it’s best to stick to exchanges that don’t charge any fees. This way, your profits are only affected by your trading strategy.
Practice Safe Storage
The easiest way to invest is to leave your money within your account, which is the option most exchanges offer to beginners. You can also transfer your digital assets into a cryptocurrency wallet if you want to secure them further.
Cryptocurrency wallets are used to store digital currency. It is possible to choose from a variety of cryptocurrency wallets, each of which has its own level of security.
It is possible to transfer coins from your exchange account to a more secure wallet using the wallet option offered by the exchange you use. Additionally, third-party software can be used, or cold storage devices can be used.
It is not possible to move your crypto coins onto your storage device on some platforms, including PayPal and Venmo. Before buying, consider whether you want that option for offline security of your assets or for future trading options.
