Have you heard about the potential this could represent as an alternative to safer investment options in your overall portfolio?
Or maybe you’ve read up about blockchain technology and you like others think it represents a huge new development and various opportunities.
No matter what attracted you to this space investing in cryptocurrencies for the first time can be daunting, complex, and downright confusing.
I’ve been there, and so has every other cryptocurrency trader or holder at one point. And most of us even with lots of trading or technical experience found the first cryptocurrency transaction and purchase a bit perplexing.
So what I am saying is that I’ve been there, and I’ve found it to be more confusing than it should have been.
Therefore I thought I could create a guide that would make it super easy for anyone, with little or much experience to invest in cryptocurrencies for the first time.
And additionally, I will share some of my and other experienced crypto investors tips that will help you get started in the right way.
The overall steps to investing in cryptocurrencies are
- Decide which cryptocurrency to invest in
- Find a good cryptocurrency exchange or broker to buy the cryptocurrency at
- Decide what cryptocurrency wallet you want to use
- Buy the cryptocurrency
- Send the cryptocurrency to your wallet
Note: The order of buying vs deciding which cryptocurrency wallet to use can change. It depends a bit on which site/exchange you want to use to buy the cryptocurrency. Because some sites like Changelly or Coinmama requires you to have a wallet before buying.
But many other exchanges let you store your newly bought cryptocurrency at their exchange.
Where to buy cryptocurrencies at
You can buy cryptocurrencies, and I mean real coins and tokens and not investment certificates of them at either:
- Crypto broker sites – buy cryptos at a fixed rate
- Cryptocurrency exchanges – buy cryptocurrencies from other people using a trading system
- Peer-to-Peer marketplace – buy cryptocurrencies from other people and negotiate the deal via messages
- OTC desks – for buying large sums of cryptocurrencies (more than $100k)
Unless you are planning to buy large sums of cryptocurrencies you’d stick with options 1-3. And then it is a matter of preferences and availability for which you go with.
The reason to use a broker site is
- If you want to buy cryptocurrencies easily and you value ease of use over the price
- You want to pay with a card (credit card or debit card)
The reason to use a cryptocurrency exchange is
- You want to get the best price possible.
- You don’t mind learning more about how trading work and to want to fully engage with it
The reason to use a p2p marketplace are
- You want to pay with cash or some other payment method that’s not accepted elsewhere
- You want to stay anonymous when purchasing
You can find more examples of exchanges here
Recommended p2p marketplaces:
This is how you buy a cryptocurrency at most broker sites, cryptocurrency exchanges, and p2p marketplaces.
Step 1 ) Register an account
This could include providing verification of identity and completing KYC and AML checks.
Step 2 ) Make a deposit/pay with a card
The second step would be to actually buy the cryptocurrency you want. Either with a bank deposit or a card payment. Unless you use a p2p marketplace and agree on cash payment or something different.
Step 3 ) Send your cryptocurrencies to a wallet / store them at an exchange
Finally, you need to decide where to store your cryptos. You can at some exchanges store them there indefinitely, but it is not recommended as you don’t have full control of your cryptos there. And hacks are unfortunately common for exchanges.
What wallets to use to help store your cryptocurrencies
When you own cryptocurrencies you need to consider where you store them and how you want to access them.
We are used to storing our funds in a bank account. And some people think that cryptocurrency exchanges are the same as banks. But actually, in the crypto world, it is often considered that you should be your own bank. Find useful wallets for cryptos here.
That means you control your coins and tokens and you use a wallet that you control to access them (learn more here).
So I urge everyone to consider this. As there are common risks to leaving cryptocurrencies at an exchange. Some exchanges are better than others of course. But you need to ask yourself what risks are you willing to take?
Useful tips for investing smarter in cryptocurrencies
- Look into finding a good hardware wallet for your cryptos as they are the safest alternatives
- Don’t share your private keys with anyone! They are your secret code for accessing your cryptos
- Don’t invest everything you got into the first crypto that you find. Take your time to learn and invest small over time is my advice
I hope that this guide was helpful and by now you have a much clearer idea of how to go about buying cryptocurrencies and also storing them safely.
The more familiar you get with space the easier it all will become. And the more it will make sense how it all works.