How To Buy Cryptocurrency In 2021 - For Beginners
Want to jump straight to the answer? You can buy Cryptos on eToro
Keep hearing about cryptocurrency and wondering how you can buy cryptos? Read our beginner's guide on how to buy cryptocurrencies today!
In this guide, we’ll explain everything you need to know about how to buy cryptocurrencies and review the top crypto exchanges where you can buy crypto today.
Buying cryptocurrencies has been trending lately since the revolution in technology and digital platforms. The outburst of crypto markets with new digital coins emerging and the establishment of new and savvy applications to support crypto, it has never been easier to buy cryptocurrencies.
Amateurs should have a comprehensive and concrete understanding of cryptocurrencies. The basic knowledge for the eminent coins in the market and the perception about platforms like eToro to invest in these cryptocurrencies is essential. Here at Trading Education, we have put a concise guide to buying cryptocurrencies in 2021.
How to Buy a Crypto Asset in 5 Steps
If you don’t quite have the time to read this in-depth guide, below we explain the 5 steps required to buy any cryptocurrency right now.
As long as you have an instant payment method to hand, the above steps allow you to buy any crypto in less than 5 minutes!
What Are The Basic Steps for Buying Cryptocurrency?
Conventional steps that can be followed to buy a cryptocurrency asset can be outlined as follows:
Below, we show you how to buy Cryptocurrencies. We’ll walk you through the steps of choosing a broker, understanding the potential risks and rewards, and completing your cryptocurrency investment in the safest way possible.
1. Learning About Cryptocurrencies Before Buying
As per Coinmarketcap, there are more than 8,000 cryptocurrencies out there. Therefore, it may be ideal for picking those that you know something about and becoming a specialist in their value developments, as opposed to adopting a strategy that might prove to be expensive for you. The more knowledge you have for cryptocurrencies, the easier it will be for you to pick the right one to buy. Here at Trading Education, we have a voluminous article sector and trading courses that would help you in this regard.
2. Understanding The Factors Affecting the Price of a Cryptocurrency
When you are going to spend in crypto, the first thing you might consider is looking into the key factors that drive the prices of these currencies. These drivers differ for different types of currencies, but the key influential factors are somewhat the same. The price of a cryptocurrency effectively fluctuates in the market by the following factors:
Supply & Demand
Like any conventional investment, the supply and demand of a certain coin in the market determine if it is wise and profitable to buy and invest in it. For a progressive time, Bitcoin has been ruling over the market since forever being the parent cryptocurrency. The fact that there are only 21 million bitcoins in the world exploding with a population of somewhat seven billion people; thus, the demand and supply curves are rather unstable.
Competitive Edge
The sharp competitive edge of a certain coin in the market matters a lot to position it in the over-the-consumer graphs. Applications like eToro are quite handy in this case since they help to follow up the prices instantly around the clock. The larger the scale of a cryptocurrency in the market, the greater the chances of its profitability. For instance, recently, Bitcoin broke all the records of price hype, hitting its all-time high of $41,941 on January 8, 2021.
3. Checking The Availability Of Your Preferred Coin on a Cryptocurrency Exchange
Just like fiat currency which has brick and mortar platforms for the exchange of currencies, cryptocurrencies also need a respective platform where they can be exchanged. It is very important to consider the availability of a certain currency on these platforms.
Comparatively, like eToro, NYSE, FTSE, and Nasdaq, there are platforms like Coinbase, Gdax, and others for the purpose. Consider checking out the record for their effluent and feasible availability of these coins on the exchange platforms so that you can make efficient transactions and create more value out of your investments.
4. Deciding How Much to Invest in Crypto
The decision to invest in cryptocurrency is critically important. You need to take a calculated risk with your assets that make sure you know how much you are willing to risk out there in the marketplace. Make sure you are making a reasonable contribution so that the return on the investment is profitable for you.
Likewise, with any venture you're new to, it's a smart thought to begin investing small amounts. It can be laid out that investing in small amounts helps in creating a handy structure for your initial investing setups. Founder of Easy Crypto Grainger praises this aspect of cryptocurrencies by saying that, "part of the allure of cryptographic forms of money is that it doesn't take a ton to begin. Bitcoins are separable by up to eight decimals, so it's conceivable to purchase just a small amount of a Bitcoin."
Whenever you've signed into your crypto trading account, select the amount of money you want to invest. At that point, pick the computerized cash you need to purchase. In no time, your request is prepared, and you're authoritatively a digital currency financial specialist!
As Grainger says: "Beginning putting resources into cryptocurrency is far less complex than exchanging shares. Also, the outcomes can be fulfilling."
5. Choosing The Cryptocurrency & Getting To Know About It
After you are done with the basic research, the next step is to choose the type of cryptocurrencies you are willing to invest in. Many platforms will help you to set up a basic general framework for your trading or purchases. Most people usually buy the most reputable coins such as Bitcoin or Ethereum. But other altcoins have proven to be profitable as well. So, do your research and decide which one you will go with!
6. Setting Up A Crypto Exchange Account
To purchase cryptocurrency, you need to exchange to purchase and sell. This implies you need to set up an exchange account and store your crypto coins in your advanced digital account, known as a 'wallet'.
Next, you'll need to choose a crypto trading exchange account. These go about as the mediator between fiat monetary forms - official cash like the U.S. dollar, and digital currencies, for example, Bitcoin, Ethereum, or Ripple.
All crypto exchanges charge fees, and this is something you need to research to see which one will suit you better. Some likewise demand extra charges for stores and withdrawals. The key is to comprehend when charges apply and the amount you'll pay.
If you need to exchange digital currency, you simply need an account of a broker, as opposed to getting to the basic trade straightforwardly. The intermediary will be presented to the market for your sake. This is normally faster and simpler to set up.
7. Acquiring A Wallet To Store Your Coin
The initial step is to obtain a cryptocurrency digital wallet. A computerized digital wallet works similarly to an online account for the banking you'd use to exchange shares and other currency values. A wallet provides you with a framework to organize and overview your cryptocurrencies. Via these digital wallets, one can have a foundation since digital currencies don't have an actual structure like coins or notes. All that exists are records of exchanges put away on the blockchain.
At the point when you purchase cryptocurrency, the vendor closes down responsibility for coins to your wallet's location. Shockingly better, the subtleties are kept secure by your wallet's password or key.
Advanced digital crypto wallets range from gadgets to programming applications or online platforms like eToro.
8. Deciding Your Trading Strategies
Everyone has a strategy for investing in crypto coins. You need to ensure you know and comprehend your market. The estimation of the price of cryptocurrencies relies upon an entire set of factors and components of the definitive cryptocurrency.
In the previous year, costs of cryptocurrencies have been affected by the crisis in the governments, media inclusion of the area, and the fortunes of the U.S. Dollar - just as explanations from compelling financial specialists or government pastors. The more individuals become associated with their crypto assets; the more compelling these various factors will turn for you.
Exchanging cryptocurrencies and dealing in digital financial platforms is not child's play. In recent months, the cost of Bitcoin has been fluctuating drastically. Other digital currencies have demonstrated greater security, yet this is another and energizing zone and unavoidably draws in theorists.
In case you're to a greater degree a 'money under the bed' type, this presumably isn't the territory for you. In any case, if you are happy to face some challenge or are energized by researching new advancements, then this could be an intriguing region to investigate.
Should You Invest In Cryptocurrencies?
One of the reasons that cause everybody to consider putting resources into digital money is that $1,000 invested in Bitcoin in 2013 would be worth over $400,000 today. Lately, ICOs have made various enormous returns in a short measure of time. Stratis raised $600,000 during their ICO in June 2016 and has since seen a 63,000 percent ascend in the cost. Spectrecoin brought $15,000 up in January 2017 during their ICO and has since ascended more than 13,000 percent.
Since digital currencies are volatile, it is advised to invest proactively. Datum dispatched their ICO in late October 2017, having just brought $1.5 million up in pre-ICO reserves. Since cryptographic forms of money are network-based and Datum has just gotten a groundswell of help, speculators realize almost certainly, they can start changing out their ventures moderately rapidly.