How to Buy Cryptocurrency

Many crypto investment platforms let you choose from over 100 different cryptocurrencies these days too. Of course, this includes the gladiators of the space like Bitcoin, Ethereum, Litecoin, Cardano, Solana, and many others. However, we won’t just be talking about how you can invest. We will also be taking a look at the industry as a whole, how you can safely store your crypto, and so much more. 

 

Choose a Broker or Crypto Exchange

Globally, there are a growing number of platforms to choose from when it comes to investing in cryptocurrency. Naturally, different platforms are run by different entities, but they don’t all operate in the same way. Platforms like wallets, exchanges, and brokerage sites all work in their own unique ways, and each has its own set of strengths and weaknesses. But for the purposes of this piece, we’d like to highlight one of these platforms that have far more strengths than weaknesses. 

eToro - visit here

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For those that haven’t come across eToro before, this is a brokerage site that has gained significant popularity in many jurisdictions. eToro is hugely popular with younger investors thanks to benefits like zero commission trades, optional social trading, educational tools, and a growing number of supported cryptos. On top of this, eToro has a professional mobile app that you may download for iOS or Android, allowing you to take your investment activities on the move. 

 

Pros

• Plenty of payment methods supported
• Fee-free investing
• Currently used by millions of investors

 

Cons

• Inactivity fees do apply
• Withdrawals can also incur fees

 

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Cryptoasset investing is unregulated in most EU countries and the UK. No consumer protection. Your capital is at risk. CFD crypto trading is unavailable for clients residing in the UK and US. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

 

What is the Difference Between Buying and Trading Crypto?

Although the terms ‘trading’ and ‘buying’ are often used synonymously in the cryptocurrency investing community, they actually indicate different activities entirely. If you simply buy a cryptocurrency, whether it be Bitcoin, Ethereum, or any others, you are effectively making a one-time purchase - usually with the intention of holding the coin for a long time. Trading, on the other hand, can involve both buy and sell orders, and it is usually an active instead of passive investment activity. 

There are also differences regarding the approach to both activities. Those that buy cryptocurrency won’t necessarily pay attention to market or technical indicators prior to executing their order. After all, buying crypto is a long term strategy, which places less importance on short-term market fluctuations. Trading is very much the opposite. Chart analysis, technical indicators, and multiple orders must be utilised to give yourself the best chance of turning a profit in the long run.

Trading also tends to involve more specialised platforms such as exchanges or brokerage sites, whereas buying can be done through standard wallets. Check out a snapshot of the main differences between these two before continuing:

 

Buying

• Involves one transaction - a singular purchase
• Done through online wallets mainly
• Only way to turn a profit is during a bull market
• Typically involves higher fees than trading

 

Trading

• Involves multiple transactions - both buying and selling
• Done through brokerage or exchange platforms
• Can turn a profit during a bull or bear market (by shorting crypto)
• Fees tend to be lower

 

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67% of retail investor accounts lose money when trading CFDs with this provider

How to Buy Crypto Online

Now we are getting to the main objective behind this piece - highlighting how you can make your first crypto investments online. There is certainly no shortage of providers relating to wallets, exchanges, and brokerage sites in well-established crypto markets. But just to reiterate, our preferred platform to buy cryptocurrency is brokerage sites. Again, there are a number of brokerage sites that operate in different nations, but we would recommend eToro above all others. 

To buy cryptocurrency on this site, you must register for a new account, which can be done by completing the following steps:

1. Find an appropriate site
2. Complete the registration process 
3. Sign in and fund your account
4. Find the crypto you want to buy 
5. Execute the trade

Getting Started With eToro

eToro is a reputable and high-quality brokerage platform that is fully regulated in several nations. You can sign up with eToro through the main desktop site or through the mobile app. After this is done, you will now have exposure to various investment products and a wide range of cryptocurrencies too.

67% of retail investor accounts lose money when trading CFDs with this provider

 

How to Trade Crypto Online

If you plan to trade cryptocurrencies, which is only recommended for those with adequate investing experience, you can also do this through eToro. As discussed earlier, trading requires more market analysis, more orders, and it is very much a full-time commitment if you are to turn a consistent profit. But if you are prepared to put in the work and you feel confident with what you are doing, here is how you can get yourself setup:

1. Pick a reputable trading platform
2. Complete the sign-up process
3. Sign in and deposit money
4. Choose your desired trading product (standard, CFDs, etc.)
5. Make your first orders to get the ball rolling

Start Trading with eToro

Feeling ready to start trading various cryptocurrencies? You can register with eToro easily through either mobile or desktop. These guys have some pretty awesome trading products for you to check out too, and there are even educational videos for those who might want some extra guidance. 

67% of retail investor accounts lose money when trading CFDs with this provider

 

How to Fund Your Account

Cryptocurrencies might be digital assets, but they must still be purchased using traditional funds, to begin with. That’s why you need to actually fund your new investment account before you can buy any cryptos at all. Here’s the good news - after registering with eToro you can choose from a range of payment options. Some of them you will already have at your disposal too, meaning that you can make your first investment even quicker than you might have thought. 

But what exactly are these payment options and what are the pros/cons of choosing these methods? All of this is discussed below.

PayPal

PayPal is arguably the most popular e-wallet in the world. This method has been available pretty much since the turn of the Century, and it is one of the safest of all payment methods out there. PayPal uses your associated email to transfer funds in and out of any online accounts, meaning that you never actually share sensitive details. Users of PayPal also benefit from a 24/7 fraud detection team, higher limits, and zero fees.

Neteller/Skrill

Neteller and Skrill haven’t been around as long as PayPal, but they still fall under the category of e-wallets. This means that you must set up an account with either provider before you can use their services, much like PayPal. It is completely free to set up a new account with Neteller or Skrill, and by nature, these digital wallets allow you to hold funds in an account that is separate from your primary bank account. This in itself boasts significant advantages, and Skrill/Neteller transactions are usually instantaneous.

Credit Cards

Not all of us own credit cards, but for those that do, this is another viable option to use at major investment platforms. Of course, the main benefits of credit cards are that you can spend cash that you might not have readily available, with very little interest (if any) through major providers. At the same time, credit cards are ideal for fraud protection, as most companies will refund money should anything go wrong - not that this is likely as long as you invest through reputable platforms. 

Debit Cards

The vast majority of people have a debit card that they use on a daily basis to purchase everyday goods and services. This eliminates the need to go and set up third party accounts, as you need to do with providers like PayPal, Skrill, and Neteller. You’ve also got benefits like instant transactions, manual approval requirements (prevents unauthorised transactions), and more. On the downside, debit cards do require you to share card details and the transaction limits aren’t as high as they are for alternative methods. 

This might not be ideal for those looking to make large investments. 

Bank Transfers

Bank transfers used to get a bit of bad press for being overly stringent and relatively slow to complete. This was true before people had the option of performing ‘rapid transfers’, which most mainstream banks now support. Since this has become an option, bank transfers have become a very popular method for making online purchases. These must be performed manually in most cases, making them very safe, and the limits are some of the highest that you’ll find. On the flip side, you must obtain the account details as well as a unique reference code to ensure that the funds are credited to your individual account. 

This opens up the possibility of human error, but as long as you take your time and double-check the details, you should be fine.

Trustly

People often confuse Trustly with being an e-wallet, but this isn’t actually true. Trustly provides a link between your bank account and whatever platform you are attempting to make purchases through. You can think of it as an extension or add-on for your bank account, and essentially, it allows you to process transactions quickly, with greater ease. Trustly has all kinds of banks and merchants within its network too, so there is a fair chance that you’ll be able to use Trustly these days. 

You also don’t need to set up a Trustly account in order to use their services, contrary to popular belief. Therefore, you could say that Trustly is more convenient than other options such as the mentioned e-wallets.

 

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How to Store Crypto

If you follow crypto closely, you’ll know that there have been breaches in the past where investors have lost their coins and subsequently, their investment. With that said, such major breaches haven’t occurred in a long time, and this is highly unlikely to happen at regulated investment platforms. However, it’s still better to be safe than sorry, which is where crypto storage enters the picture. Storing your crypto can be done in several ways these days too.

 

The main methods available to investors right now include cold or hot storage. The former allows you to remove your crypto from being connected to the web, whereas the latter adds layers of security to your investment while maintaining web connection. If this sounds a little confusing, don’t worry, we’ve explained the two in greater detail below.

 

Cold Storage

Cold storage describes the process of removing your crypto from being connected to any form of an online platform. Yes, this can be done, even if cryptos are technically digital assets. To do this, you must obtain a device that looks a little like a USB, this device will have a secure wallet address attached to it. After taking note of the wallet address, you can send your holdings to this device and keep them removed from the web. 

Once it is removed from your computer or PC, it means that it is almost impossible for hackers to steal your holdings.

Hot Storage

‘Hot’ in this instance simply indicates that you will be storing your crypto within a wallet that is connected to the web. Online wallets are the main platforms that people tend to use for hot storage, with prime examples being platforms such as Coinbase. These online wallets can be accessed on both mobile and desktop, and much like cold storage, they have their own private keys. This means that your holdings are still shielded through keys that only you will know. 

And since these online wallets are kept connected to the web, you can access your holdings as and when you please. This is more convenient for those who may wish to access holdings to buy/sell at short notice, but online wallets are more susceptible to hacks - although this is still quite unlikely. 

 

Best Cryptocurrencies to Buy

Now that you are aware of how to buy cryptocurrency, it makes sense to highlight some of the more popular investments right now. Below, you’ll see the top 10 cryptos according to their current market cap:

• Bitcoin (BTC)
• Ethereum (ETH)
• Tether (USDT)
• Binance Coin (BNB)
• Solana (SOL)
• USD Coin (USDC)
• Cardano (ADA)
• Ripple (XRP)
• Terra (LUNA)
• Polkadot (DOT)

 

Note that while these are the current rankings at the time of writing, cryptocurrencies are extremely volatile, and this order can change quickly. We’d like to also point out that we do not recommend any one of these over another - this is simply the top 10 as things stand.

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What to Consider When Buying Crypto

Cryptocurrency, by nature, is a very speculative and volatile asset class. This means that investing in any cryptos is a pretty risky thing to do, but as history has shown us, high risk can often result in high returns. Of course, this isn’t guaranteed! In addition to the volatility of the market, there are certain factors you need to consider associated with your chosen trading platform too. All of this is discussed below.

Trading Fees

If you recall from the information relating to trading above, trading involves making multiple buy and sell orders. Of course, if you are incurring even a small fee for each executed order, this can add up quite considerably over time. Therefore, it’s important to source platforms that have zero fees like eToro, ideally, or use platforms with minimal fees where possible. 

Regulations

In many countries around the globe, cryptocurrency trading is perfectly allowed, so you have nothing to worry about in terms of regulation from a legal standpoint. However, you should certainly pay attention to regulatory changes involving cryptos in rather turbulent parts of the world. Changes in regulations can greatly impact the value of a coin, and it’s critical that you stay on top of such news.

Transaction Fees

Transaction fees are another way that platforms can eat away at your hard-earned cash when processing deposits or withdrawals. While it’s not quite as common to see transaction fees for deposits, fees for withdrawals certainly do exist. These can change quite a bit based on the method you use, however, so make sure you read up on the most feasible options on your chosen site.

Reasons for Investing

Above all else, we suggest that you think about your reasons for buying cryptocurrency. If you are purchasing cryptos with the intention of holding long term, this will impact which coins you should be going for. But if you plan on trading different coins, those with smaller market caps might be a better choice since they fluctuate more than stable coins. 

Market Timing

From a trading standpoint, timing the market is essential for long term success. The crypto market as a whole is incredibly volatile, and of course, it’s better to acquire coins when they are at a lower price. A lower price means you can obtain a higher number of coins without having to throw more money into the pot. In addition to this, if you are trading, you need to know when the market might drop and fall to perform the most appropriate trades.

Is it Safe to Buy Crypto Online?

The process of buying crypto online is very safe these days. That’s because regulated platforms have their own security measures in place to prevent anything from going wrong. Of course, no online purchases are 100% safe, but buying crypto through top sites like eToro is the safest way of getting involved in this market. There are additional measures that you can also take to protect your investments too, as detailed here:

• Verifying your account after registering
• Enabling 2FA (Google Authentication)
• Spreading out your holdings across different platforms
• Setting up backup emails and numbers
• Putting extra sign in measures in place such as PIN numbers
• Avoiding accessing your accounts on public WiFi

If you run through the measures detailed above, you can rest assured that you’ve done everything within your power to shield the holdings you may have. 

 

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67% of retail investor accounts lose money when trading CFDs with this provider

 

How to Sell Crypto

No matter what your investment intentions are with cryptocurrency, at the end of the day, you will likely want to sell your coins. This might be because you feel you’ve taken enough profit from the investment, or you may just want to reallocate funds elsewhere. Whatever the reason, you can easily sell your crypto in the following ways:

Exchanges

Crypto exchanges are usually well-equipped for traders, as they have more professional tools than other platforms. Prime examples would be Binance and Coinbase in places such as the USA and UK. And while you can instantly buy cryptos on these exchanges, you can instantly sell cryptos too. With exchanges, you don’t have to sell at the current market value either. You can set up orders that will only be executed should a particular price be hit. 

Brokerage Sites

Brokerage platforms are another great way of selling your crypto holdings. Sites like eToro allow you to do this without incurring any fees whatsoever, and usually, your order will be executed pretty quickly. But since brokerage sites work like a middle man for your trade, the spreads might not be quite as favourable as they are with exchanges.

Digital Wallets

Holding crypto in digital wallets is the safest method out there for preventing unwanted visitors from accessing your funds. And while you can safely hold funds in digital wallets, you can also sell your crypto through such platforms. These orders are executed instantly, although higher fees are likely to be incurred compared with the other options listed above.

Is Crypto a Good Investment?

It goes without saying that cryptocurrency investments are far riskier and more volatile than other investment options. However, where there is more risk, there is also more reward, but it does depend on what coins you choose to invest in, of course. But if you look at market returns for the last 12 months, crypto is still boasting a near 100% 12-month return, even with the recent dip in the market (at the time of writing). Note that this is an average for all coins, not specific coins like Ethereum or Bitcoin.

Compare this with a popular stock market index like the S&P 500, which is up just over 20% for the last 12 months, the returns are still approximately 5x greater. With this said, we obviously cannot guarantee that the crypto market will continue to post significant returns in the near future. However, we are bullish on the market long term, which is why we still feel that buying crypto is a good investment in 2022.

 

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67% of retail investor accounts lose money when trading CFDs with this provider

 

Final thoughts

In conclusion, it is clearly fairly easy to buy crypto right now. You have many great options at your disposal, although registering with eToro is our recommended avenue in 2022. Adding to this, if you want to get involved with crypto investing you have the option of buying, trading, staking, social trading, and more at the top sites. New products are constantly emerging with the crypto market too, making it one of the most exciting investment prospects as we move deeper into 2022. So if you want to dive right in, just set up your new account today and execute your first trade.

 

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67% of retail investor accounts lose money when trading CFDs with this provider

FAQs

 

Can I buy crypto in any country?

No. You can only buy crypto in countries where this has become an approved and regulated asset class. Places like the UK, Australia, the USA, and most European countries are prime examples. So you can purchase crypto without any legal concerns in those locations.

 

Is there a limit to how many cryptocurrencies I can buy?

No, there is no limit as to the number of cryptos you can own at any one time. There are hundreds of cryptos to actually buy these days too, so it’s fairly easy to diversify your portfolio. With that said, certain platforms might limit the number of coins you can purchase for a single transaction.

 

Can I buy crypto without ID?

No. When you open an account at a regulated investment site, you must verify your ID as soon as possible. Only when a site has confirmed your ID will your account be verified, and from here you will then gain access to all investment products a site might have.

 

Can I buy crypto instantly?

Absolutely. After you’ve opened up a new investment account and funded it with a supported method, you can instantly execute a purchase order.