Over the past decade, cryptocurrency has undeniably transformed the trading world. This digital asset has an abundance of benefits, making it a highly attractive option for investors of all experience levels. In fact, many experts agree that crypto is an ideal way to diversify your portfolio, make pseudonymous transactions, and enhance your trading skills.
If you want to purchase crypto but don’t know where to begin, you’ve come to the right place! In this article, we’ll give you a simple step-by-step guide that shows you exactly how to take your first steps in the thrilling crypto space. Before you know it, you’ll be ready to make your first trades and become a true cryptocurrency investor. With no time to waste, let’s begin!
Are You Ready To Start Trading Cryptocurrency?
If you’ve thought about trading cryptocurrency, then you may have wondered if you’re even ready to embark on this adventure. After all, investing can be high-risk and time-consuming, so it’s definitely not suitable for everyone.
If you’re having second thoughts about whether it’s a good idea for you to buy crypto, we suggest carefully considering the following questions:
Have I educated myself enough?
Am I financially prepared?
Do I understand the potential risks?
Can I handle volatility?
Do I have time to dedicate?
Am I patient?
Am I aware of tax implications?
If you can confidently answer ‘yes’ to these questions, then you’re ready to start buying cryptocurrency. Now, all you need to do is follow our simple step-by-step guide to begin your exciting journey as a trader!
Step 1 – Find a Crypto Exchange or Brokerage
Your first step will be finding a suitable crypto exchange or brokerage to conduct your trades through. Cryptocurrency exchanges and brokerages are distinct but still share some similarities, so it’s important to understand how each works before picking one to use.
Cryptocurrency Exchange
Crypto exchanges are platforms where traders can directly buy and sell crypto assets and other digital currencies. Exchanges can be either decentralized or centralized and operate in a similar way to traditional stock exchanges. The only difference is that crypto exchanges have no physical presence and are typically unregulated.
By facilitating trades, exchanges are a convenient option for more experienced investors who don’t require any extra assistance. The best crypto exchange will have low transaction fees, a wide selection of assets, and robust security measures.
Top cryptocurrency exchange recommendation – Kraken
Crypto Brokerage
Crypto brokerages are platforms, firms, or individuals that act as financial intermediaries for traders. They typically provide beginner-friendly tools that their users can utilize to help develop their skills.
Brokers are a more accessible option and are most suitable for first-time traders. They can provide a much-needed push in the right direction for anyone to build confidence and make the most of their trading ventures. Users can find a feature-rich broker by using a crypto brokerage-matching platform that performs automatic pairings.
Top crypto brokerage-matching platform recommendation – Altrix Edge
Once you’ve chosen a brokerage or crypto exchange, all you need to do is create an account, link a payment method (such as your bank account), and make a deposit. After this, you can move on to step two!
Step 2 – Choose Crypto Assets To Buy
Now you can choose some cryptocurrency assets to build up your portfolio with. The best portfolios that are more likely to produce a steady, long-term profit will be diverse and balanced. Therefore, we recommend buying a handful of different cryptocurrencies with varying market caps, prices, and use cases. You can check out the available coins to buy through an online crypto marketplace such as CoinMarketCap.
The Main Types of Crypto Assets
With so many different assets available for you to buy, we understand it can be overwhelming. So, to help you out, we’ve made a list of the top types of crypto coins and tokens, along with key examples:
- Stablecoins – Tether (USDT), Binance USD (BUSD);
- Security tokens – Polygon (MATIC), Filecoin (FIL);
- Utility tokens – Ethereum (ETH), Chainlink (LINK);
- Gaming tokens – Axie Infinity (AXS), The Sandbox (SAND);
- Memecoins – Dogecoin (DOGE), Shiba Inu (SHIB);
- NTFs –The Captianz, Mutant Ape Yacht Club.
Remember to do plenty of research about each coin before buying it. You can learn valuable information regarding any crypto project by reading its whitepaper. This will give you further insight into the coin’s uses, future projections, and key characteristics.
Furthermore, you can discover the community’s general consensus regarding a particular coin by looking it up on online forums and social media platforms.
Step 3 – Select a Storage Method (Crypto Wallet)
The next step is to decide on a storage method to use. Since crypto is fully digital, there’s no way to physically store your coins. Instead, you can own a crypto wallet that stores private keys, which you can use to access and manage your cryptocurrency holdings. There are two main types of crypto wallets:
Hot Wallets
Hot wallets, also known as software wallets, operate solely through an internet connection. They typically consist of a free-to-use platform or application that users can access through their mobile or desktop devices.
Users can store up to tens of thousands of cryptocurrencies in their hot wallets. This type of wallet is also a fantastic option for anyone looking for convenience when trading. If you’re planning to regularly manage your crypto holdings, a hot wallet will be ideal for you. They’re also highly beginner-friendly, making them perfect for first-time traders.
However, this type of crypto wallet is more susceptible to cyber threats and is usually not suitable for traders who intend to store large amounts of crypto.
Top recommendation – Trust Wallet
Cold Wallets
Cold wallets, otherwise known as hardware wallets, are physical devices that closely resemble flash drives. These wallets do not need an internet connection and can instead be inserted into a compatible device such as a computer.
This type of wallet can shield crypto assets from cyber threats since they largely operate offline. Therefore, if you intend to purchase large amounts of crypto, then a cold wallet will be your best option. However, you must be careful not to lose or damage your device, as you can risk losing your assets forever.
Additionally, cold wallets have a steeper learning curve and usually have an upfront cost of anywhere between £50 and £200. This means they may not be the best choice for inexperienced traders or those with smaller budgets.
Top recommendation – Trezor Model One
Once you’re sure which type of crypto wallet you want to use, you can select a provider and follow their instructions. If you use a cold crypto wallet, then you’ll need to wait for your physical device to be sent to you. On the other hand, with a hot crypto wallet, you’ll usually need to download an app on your device and create an account there.
Step 4 – Start Trading
Now you’re ready to buy crypto! As you probably already know, investing in cryptocurrency is a terrific option for anyone looking to set foot in the trading world. Crypto is becoming increasingly accepted in our modern society, and many view it as a suitable alternative to fiat currency.
Although we’ve reached the end of our guide, we’re not done helping you just yet! Continue reading to discover our best tips for beginners who are ready to start buying crypto.
Top Tips for Beginner Crypto Traders
There is plenty to learn when it comes to buying crypto. Unfortunately, there are also plenty of mistakes to be made, with some being more costly than others. Admittedly, the crypto market is not as accessible as other industries. This often leaves newcomers overwhelmed and lost, causing them to trip up and put themselves at financial risk.
To avoid this, check out our best tips that beginners should follow when trading cryptocurrency for the first time!
Educate Yourself
First things first, you must always do extensive research before making any investment decisions. You can begin by making sure you understand what cryptocurrency actually is and how it functions. Luckily, there are plenty of helpful online resources, such as articles and YouTube videos, that will tell you everything you need to know about this asset.
Set a Budget
It can be easy to get caught up in the thrill of trading, and many traders do end up getting carried away and begin investing more than they can afford to lose. Additionally, feelings of FOMO (fear of missing out) can also cause traders to make hasty decisions, leading them to become financially vulnerable. You never want to get yourself in a position where you’re borrowing money or taking out a loan for your crypto investments. Therefore, you must establish a clear budget beforehand.
When setting a budget, you should carefully consider your current financial situation. Do you have any debts to pay off? Are you saving up for anything, such as a car or house? Do you have a steady source of income? These are all questions you should think about before buying crypto or other digital assets.
Establish Clear Goals
Similarly, you should set defined long and short-term goals before making any crypto transactions. Goals will give you clarity and help you resist making impulsive decisions. You’ll also have the opportunity to establish a proper investment strategy that you can benefit from.
Are you looking for small and steady growth or swift and short gains? How much time are you willing to dedicate to your trades? By aligning your goals with your strategy, you can optimize your chances of success as a trader.
Stay Updated
Last but not least, you should ensure to remain updated with relevant news. Of course, it’s impossible to accurately predict how crypto assets will perform. However, you can still enable yourself to make informed decisions by staying in the loop of economic and political developments.
We also suggest that you regularly check out new outlets that cover stories related to the financial markets and blockchain technology. This may also reveal new investment opportunities that you may have otherwise missed.
Summary
To summarise, buying cryptocurrency is easier than it may initially seem. Many newcomers become daunted at the prospect of venturing into the trading world, but it truly isn’t that complicated.
Once you’ve found an exchange or brokerage, you’re already halfway there. All you need to do afterward is plan out your portfolio by researching a handful of coins and then setting up a wallet. Then, you’re free to start buying and selling crypto coins!
Just remember to do lots of research beforehand, set clear goals, and establish a budget. That way, you’re remaining safe in the volatile crypto landscape whilst allowing yourself to reach your full potential. Good luck and enjoy!
