How To Buy Cryptocurrency

How To Buy Cryptocurrency

How To Buy Cryptocurrency Bitcoin, Dogecoin, Ethereum, and other cryptocurrencies can be challenging at first if you’re new to the world of cryptocurrencies.

Thankfully, learning the ropes is not too difficult. By following these five simple steps, you can begin investing in cryptocurrencies.

Just keep in mind that investing in cryptocurrencies is entirely speculative and that your money is at risk. Your money could be lost in whole or in part.

Further, cryptocurrency trading is largely unregulated in India, and if something goes wrong – for example, a company goes out of business – you will have no recourse to compensation.

Choose a broker or crypto exchange.

Selecting a broker or cryptocurrency exchange is the first step in purchasing cryptocurrency. While both allow you to purchase cryptocurrency, there are important distinctions between them to be aware of How To Buy Cryptocurrency.

What Is a Cryptocurrency Exchange?

A platform for trading cryptocurrencies is referred to as a cryptocurrency exchange. Despite the fact that exchanges frequently have low fees, their more complicated user interfaces, numerous trade types, and sophisticated performance charts can be intimidating to novice cryptocurrency investors.

Exchanges for cryptocurrencies such as WazirX, CoinDCX, Zebpay, and UnoCoin are some of the most well-known. Although the standard trading interfaces of these companies may be intimidating to novices, especially those without a background in trading stocks, they also provide simple, user-friendly purchase options.

However, the convenience comes at a price, as the beginner-friendly options are much more expensive than using each platform’s standard trading interface to purchase the same cryptocurrency. To cut costs, you might try to gain enough knowledge to use the common trading platforms either before or soon after you buy your first cryptocurrency.

An important reminder: if you’re new to cryptocurrency, make sure your preferred exchange or brokerage accepts transfers and purchases made in fiat currencies like sterling and INR. Some exchanges only allow you to purchase cryptocurrencies using cryptocurrencies, so before you could start trading cryptocurrencies on that platform, you would need to find another exchange to purchase the tokens your preferred exchange supports.

What Is a Cryptocurrency Broker?

By providing user-friendly interfaces that communicate with exchanges on your behalf, cryptocurrency brokers simplify the process of buying cryptocurrencies. Some impose fees that are higher than exchanges. Others make the claim to be “free” while profiting by either failing to execute your trade at the best available market price or selling information about what you and other traders are buying and selling to large brokerages or funds.

How To Buy Cryptocurrency

Although brokers are undoubtedly practical, you should exercise caution because you might be unable to remove your cryptocurrency holdings from the platform. For instance, with some, you are unable to withdraw your cryptocurrency holdings from your account.

Even though it might not seem like a big deal, savvy cryptocurrency investors prefer to store their coins in digital wallets for added security. For even greater security, some people opt for offline, hardware cryptocurrency wallets.

2. Create and Verify Your Account

You can register to open an account after selecting a cryptocurrency broker or exchange. You might need to prove your identity, depending on the platform and how much you intend to purchase. This is a crucial action to avoid fraud and satisfy legal requirements.

You might not be able to purchase or sell cryptocurrency until the verification process is finished. The platform might require you to upload a selfie to show that your appearance matches the documents you provide, along with a copy of your passport or driver’s licence.

3. Deposit Cash to Invest

You must make sure you have money in your account in order to purchase cryptocurrency. You could link your bank account to your cryptocurrency account How To Buy Cryptocurrency or use a debit card to make a payment.

4. Place Your Cryptocurrency Order or How To Buy Cryptocurrency

You are prepared to place your first cryptocurrency order once funds have been deposited into your account. You can pick from hundreds of cryptocurrencies, from well-known ones like Bitcoin and Ethereum to less well-known ones like Theta Fuel or Holo.

You can enter the ticker symbol of the cryptocurrency you want to buy (Bitcoin’s is BTC, for example) and the number of coins you want to buy when you’ve made your decision. You can buy fractional shares of cryptocurrencies from the majority of exchanges How To Buy Cryptocurrency and brokers, enabling you to purchase a small portion of expensive tokens like Bitcoin or Ethereum that would otherwise cost thousands of rupees to own.

5. Select a Storage Method

Exchanges for cryptocurrencies are vulnerable to theft and hacking because the Reserve Bank of India does not support them. How To Buy Cryptocurrency If you lose or forget the codes to access your account, you might even lose your investment. Because of this, having a secure location to keep your cryptocurrencies is crucial.

As mentioned above, you might have little to no control over how your cryptocurrency is stored if you purchase it through a broker. You have more choices if you buy cryptocurrency on an exchange:

  • Maintain the crypto on the exchange. When you purchase cryptocurrency, it is typically kept in an exchange-affiliated “crypto wallet.” You could move it away from the exchange How To Buy Cryptocurrency to a different hot or cold wallet if you don’t like the provider your exchange partners with or if you want to store it somewhere more secure. You might have to fork over a little money to do this, depending on the exchange and the size of your transfer.
  • Hot wallets. These are online-stored cryptocurrency wallets that can be used on tablets, computers, phones, or other internet-connected devices. Hot wallets are useful, but since they are still linked to the internet, there is a greater risk of theft.
  • icy wallets. Cold crypto wallets are your most secure option for storing How To Buy Cryptocurrency because they aren’t online. They appear as external gadgets like hard drives or USB drives. Cold wallets require caution, though, as you might How To Buy Cryptocurrency never be able to retrieve your cryptocurrency if you lose the key code associated with them or the device malfunctions. While the same could occur with some hot wallets, others are managed by custodians who can assist you in regaining access to your account in the event of a lockout.

Alternative Ways to Buy Cryptocurrency

While purchasing cryptocurrencies is a popular trend at the moment, it is a risky and volatile investment option. Here are a few ways you can indirectly invest in Bitcoin and other cryptocurrencies if you don’t feel like using an exchange or a broker to buy cryptocurrency.

1. Wait for Crypto Exchange-Traded Funds (ETFs)

Exchange traded funds are well-liked investments that enable you to quickly and easily purchase exposure to hundreds of different holdings. This indicates that they offer instant diversification and are safer than choosing individual investments.

Cryptocurrency ETFs, which let you invest in a variety of cryptocurrencies at once, are extremely popular. Investors from India must open a global account or use brokerage platforms through a channel that has been approved by the RBI. Investors must transfer funds using the Liberalised Remittance Scheme in order to invest in cryptocurrency ETFs from abroad.

2. Invest in Companies Connected to Cryptocurrency

If you want exposure to the cryptocurrency market but would prefer to invest in businesses that offer tangible goods or services and are governed by regulations, you can purchase shares in businesses that use or own cryptocurrencies as well as the blockchain that powers them. For example, in order to purchase shares in publicly traded companies such as:

NVDA: Nvidia The main component of the systems used to mine cryptocurrencies is a graphics processing unit, which this technology company designs and sells.
Since October 2020, Square (SQ), a provider of payment services for small businesses, has bought Bitcoin worth millions of dollars. The company revealed in February 2021 that Bitcoin accounted for about 5% of the cash on its balance sheet. Additionally, Square’s Cash App enables users to purchase, exchange, and store cryptocurrency.

Before making an investment in cryptocurrencies or particular businesses that have a significant stake in them, as with any investment, be sure to take into account your investment objectives and present financial situation. Cryptocurrency is still a very speculative investment because of how volatile it can be—just one tweet can send its price tumbling. This means that you should invest cautiously and carefully.

Kat Tretina is a freelance writer based in Orlando, FL. She specializes in helping people finance their education and manage debt.

John Schmidt is the Assistant Assigning Editor for investing and retirement. Before joining Forbes Advisor, John was a senior writer at Acorns and editor at market research group Corporate Insight. His work has appeared in CNBC + Acorns’s Grow, MarketWatch and The Financial Diet.

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