How To Buy Cryptocurrency
There are several things that aspiring cryptocurrency investors need: a cryptocurrency exchange account, personal identification documents if you are using a Know Your Customer (KYC) platform, a secure connection to the internet, and a method of payment. It is also recommended that you have your own personal wallet outside of the exchange account. Valid methods of payment using this path include bank accounts, debit cards, and credit cards.
- We have broken down the steps to buy cryptocurrency below.
- Simply select the cryptocurrency you’d like to know more about, and the guides at the bottom of this page will take you through all the necessary steps to begin investing.
- Remember that you still need to perform your research and select the best option for yourself based on your circumstances.
Step 1: Choose a Crypto Trading Service or Venue
The first step in buying cryptocurrency consists of choosing a crypto trading service or venue. Popular trading services and venues for purchasing cryptocurrencies are cryptocurrency exchanges, payment services, and brokerages. Out of these, cryptocurrency exchanges are the most convenient option since they offer a breadth of features and more cryptocurrencies for trading as compared to other places.
Signing up for a cryptocurrency exchange will enable you to buy, sell, and hold cryptocurrency. It is generally best practice to use an exchange that allows its users to withdraw crypto to their own personal online wallet for safekeeping. For those looking to trade Bitcoin or other cryptocurrencies, this feature may not matter.
Step 2: Connect Your Exchange to a Payment Option
After you have chosen an exchange, you will need to gather your personal documents. Depending on the exchange, these may include pictures of a driver’s license or Social Security number, as well as information about your employer and source of funds. The information you may need can depend on the region you live in and the laws within it. The process is largely the same as setting up a typical brokerage account.
After the exchange has verified your identity, you will be asked to connect a payment option. At most exchanges, you can connect your bank account directly or you can connect a debit or credit card.
There are varying fees for deposits via a bank account, debit, or credit card. It is important to research the fees associated with each payment option to help choose an exchange or to choose which payment option works best for you. To help you on your journey you’ll find the top 3 recommended exchanges for each cryptocurrency throughout our guides, these recommendations are based on functionality, reputation, security, support and fees. Some of the links included are affiliate, providing you with potential rewards and discounts, and us with a potential commission.
Step 3: Place an Order on your selected cryptocurrency exchange or brokerage
You can buy Bitcoin (or other cryptocurrencies) after choosing an exchange and connecting a payment option. In recent years, cryptocurrency exchanges have slowly become more mainstream. They have grown significantly in terms of liquidity and their breadth of features. The operational changes at cryptocurrency exchanges parallel the change in perception for cryptocurrencies.
Now, cryptocurrency exchanges have gotten to a point where they have nearly the same level of features as their stock brokerage counterparts. Cryptocurrency exchanges today offer several order types and ways to invest. Almost all crypto exchanges offer both market and limit orders, and some also offer stop-loss orders.
Step 4: Safe Storage for your cryptocurrency
Bitcoin and cryptocurrency wallets are a place to store digital assets more securely. Having your crypto outside of the exchange and in your personal wallet ensures that only you have control over the private key to your funds. It also gives you the ability to store funds away from an exchange and avoid the risk of your exchange getting hacked and losing your funds.
Although most exchanges offer wallets for their users, security is not their primary business. We generally do not recommend using an exchange wallet for large or long-term cryptocurrency holdings.