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For beginners entering the realm of cryptocurrency, navigating the process of purchasing digital currencies may seem daunting. However, you can kickstart your cryptocurrency investment journey by adhering to these simple steps.
1. Pick a Broker or Cryptocurrency Exchange
There are two ways you can go about purchasing bitcoin and other cryptocurrenciesâeither through a broker or a cryptocurrency exchange.
Cryptocurrency brokers simplify buying crypto but may charge higher fees or restrict moving holdings off-platform. Examples include Robinhood and SoFi. Some investors prefer holding coins in crypto wallets offered by these platforms for added security.
Cryptocurrency exchanges such as Coinbase, Gemini and Binance.US offer platforms for buying and selling digital currencies. However, these platforms can be overwhelming for new investors. While user-friendly options make buying easier, they usually have higher fees compared to standard trading platforms. To minimize expenses, consider mastering standard trading platforms before or shortly after your first cryptocurrency purchase.
2. Set Up an Account
After selecting a cryptocurrency broker or exchange, you will need to create an account. Generally, this requires signing up and providing personal information to prove who you are, often known as know your customer, or KYC, protocols. This may involve entering information from your driverâs license or passport. Sometimes, you may need to provide a photo of yourself or a form of identification.
3. Add Funds to Invest
Before you can begin investing in crypto, you must ensure funds are available in your account. You can add money to your account through various methods, including connecting it to your bank, initiating a wire transfer or using a debit or credit card for payment. The time it takes for funds to become available in your account varies depending on the deposit method and the cryptocurrency broker or exchange chosen.
Initiate Your Cryptocurrency Transaction
With your account funded, you are ready to begin purchasing crypto. Once you have decided on the cryptocurrency you wish to buy, you can enter its symbolâfor instance, BTC for bitcoinâand specify the quantity of coins you want to purchase.
Many exchanges and brokers permit purchasing fractional shares of cryptocurrencies with high values, such as bitcoin or Ethereum. This accessibility ensures that those without significant capital can still invest.
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