What Is the Difference Between Buying and Trading Cryptocurrency?
While trading and buying may sound like the same thing, there are a few key differences when it comes to cryptocurrency. These include:
- If you purchase a coin, you will own those coins. You can keep these in your exchange account or, alternatively, you can transfer them to a digital wallet (hardware or otherwise) for an added layer of security.
- In addition, when you purchase a coin, you are free to spend your tokens wherever they are accepted. Digital coins can be used to buy things from stores. You can also exchange your cryptocurrencies for other currencies, both fiat and other crypto.
- Trading crypto assets is usually a shorter-term investment strategy. In essence, you are buying low with the intention of selling high. If you deal with derivative products, you speculate on the price of the token, without owning the underlying asset. That way, you don’t have to deal with crypto wallets and private keys.
How To Buy Cryptocurrency Online?
Below are the exact steps you need to take to buy cryptocurrency online from an exchange:
- Step 1. Choose a Cryptocurrency platform: One of the first things you need to do is to choose a cryptocurrency trading platform. This is the platform you need to leverage to trade cryptocurrencies. You have many options to choose from, including cryptocurrency exchanges and peer-to-peer platforms.
- Step 2. Create an Account: Some of the factors to consider before signing up are the availability of cryptocurrencies, the regulatory status of the platform and the fees.
- Step 3. Verify Your Account: Some exchanges will request users to verify their accounts.
- Step 3. Fund Your Account: Your account now verified, proceed to add money to the account. You can do this through several channels, including credit cards, bank wire transfers, debit cards, PayPal and e-wallets. Check for supported payment options.
- Step 4. Buy Cryptocurrency: Once you have deposited some money into your account, check out the exchange’s list of currencies and find the trading pair you need to purchase your token, then lock in your transaction using the on-screen prompts.
How To Trade Cryptocurrency
Here are some steps to if you purchase cryptocurrency through a broker like Coinbase.
Choose a Reliable Cryptocurrency Broker:
The first thing you need to do is find a broker. Compare the top trading platforms and decide on one that offers you the most benefits. A good broker will let you trade quickly and provide a user-friendly interface that is easy to navigate. They should also accept several payment options and, of course.
Once you’ve created an account, you can deposit funds into your account. Most brokers will have a minimum trade amount, so make sure you add enough funds to cover this limit. You should also consider deposit fees. Ideally, your broker should offer competitive fees and a low trade limit.
Now you can start trading
If this is your first time trading, you should first try out your exchange’s demo account. This is a great way to get a feel for the trading platform and practice without risking your funds. You’ll be able to figure out investment strategies and how all the available features can help you.
What are the different Ways to Pay for Cryptocurrency?
How do you pay for the cryptocurrency you want to buy? Confirming these payment methods helps you to make informed decisions, as far as choosing the right payment channel is concerned.
These are the different ways to pay for cryptocurrencies, though this can vary by the platform you are buying from:
These are the easiest options because of the speed and interoperability with many payment processing systems. Consider using debit or credit cards issued by either MasterCard or VISA.
Some cryptocurrency trading platforms may allow you to make a direct deposit by transferring money from your local bank account.
Also, consider using some Peer-to-Peer (P2P) cryptocurrency trading platforms that allow you to transact with the sellers of cryptocurrency.
You can pay via several options, including bank wire transfers and credit/debit cards.
PayPal users in the United States and the United Kingdom can now buy cryptocurrency and pay for the same from their PayPal accounts. In addition to Bitcoin, you can buy other cryptocurrencies, including Ethereum, Bitcoin Cash and Litecoin.
What To Consider When Buying Cryptocurrency
These are some of the important things to look into before you decide on a cryptocurrency to buy:
- Deposit Fees: Your exchange or broker will likely have deposit fees of some sort. You should compare these fees with other platforms and choose one that helps you save money. A few exchanges and brokers offer no deposit fees, which may be good if you are trying to keep costs low.
- Trading Fees: You’ll also have to think about trading fees and similar charges. Fees will change from platform to platform, so be sure you check them before signing up for a service.
- Volatility: As you may already know, the crypto markets are highly volatile. Be sure to research trading and buying strategies before you make any financial decisions.
- Regulations: Ensure your trading platform or exchange is approved and regulated by an official body. When a platform follows regulations, they stick to certain procedures that benefit you and the financial community as a whole. For example, regulated exchanges must verify user IDs to reduce the risk of fraud and any other illicit activities on their platform.
- Strategy: It’s important to have a strategy in mind long before you start investing. That way you can be better prepared in case things go wrong. Only invest with money you can afford to lose.
Is it Safe To Buy Cryptocurrency Online?
You can buy your favorite cryptocurrencies from any platform of your choice. The task of protecting your funds is to be taken seriously and you can do that in so many ways.
We recommend keeping your wallet info in a safe place so you can enter the information in the relevant field when executing a transaction. You should also ensure this information is correct before completing an order.
We also suggest keeping any large amounts of XRP in a personal wallet rather than on an exchange. That way, if the exchange gets hacked, your investment will be secure.
How To Store Cryptocurrency
Storing your cryptocurrency is not only done for security purposes. It also helps you to maintain a control over the asset, pending when you are ready to sell it for profit.
You can find crypto wallets in a few different varieties: online services, hardware wallets, and apps. Research the different options and only click on official links.
How To Sell Cryptocurrency
If you want to sell your tokens, simply use the same broker or exchange where you bought them. However, there are numerous other methods available. These include:
- P2P marketplaces
- Sell for cash
- Crypto ATMs
Is it Worth Buying Crypto Right Now?
You can buy your first and more crypto coins at any time, but you need to take note of certain factors. The cryptocurrency market is highly volatile. You should invest what you are willing to lose. Take note of the fundamentals of the cryptocurrency you want to buy and define your trading strategy.
Exchanges are an excellent way to purchase tokens, but they can be complicated to use if you are new to the market. Perhaps, one of the brokers such as eToro will be a good place to start. It’s worth trying out different platforms to find one that is simple to navigate and offers tools that can help you make better trading decisions.
As always, have a strategy in mind and only invest with money you can afford to lose.