How To Buy Your First Cryptocurrency? [Step-By-Step Guide]

No matter how you look at it, investing in cryptocurrency is dangerous. One rule of thumb is that high-risk assets shouldn't account for more than ten per cent of your total holdings. So much that if it’s your first time investing, less volatile stock and bond funds might be a better choice.

But should you ever push through with your decision, there are plenty of platforms to start from. You should choose one platform which is reliable, secure, and legitimate. Several platforms offer a good source of information about different cryptocurrencies, their fundamentals and use, and their potential, so you can decide what cryptocurrency to invest in.

1. Decide where to buy

If you decide to go through with it and invest in cryptocurrency, the first step is deciding where you want to purchase your crypto. Buying cryptocurrency may be done in various ways, but a centralised exchange is likely the most user-friendly for newcomers.

Customers may have peace of mind knowing that a third party monitors their transactions to ensure they receive what they paid for when using centralised exchanges. In most cases, these exchanges sell crypto at market values and generate money by charging fees for various services.

If you're used to regular brokerage accounts, you may find a few online brokers that provide access to cryptocurrency and stock options. An exchange that focuses only on trading cryptocurrencies is what you need. If you're looking for a place to store your cryptocurrency on a platform like Coinbase, Gemini or Kraken, you won't be able to access traditional assets like stocks or bonds.

Even though centralised exchanges are simple to use, the amount of crypto that passes through them makes them a tempting target for hackers. Decentralised exchanges with cheaper costs than centralised platforms are available for more experienced users. These may be more difficult to operate and need a higher level of technical expertise, but the lack of a single point of failure makes them potentially more secure. It is possible to exchange cryptocurrencies through peer-to-peer transactions.

Over the years, cryptocurrency has proven profitable due to the long list of people who have stories about their journey - from minimal investment to earning millions. However, the journey to where they are now is not easy; due to the volatile market and countless hackers and scammers - not to mention the skills and knowledge you have to possess.

Fortunately, platforms like Kraken and Binance and full of beginner-friendly information to help new investors get started. Alternatively, other platforms like Immediate Edge helps newcomers to crypto by connecting them to reliable brokers that offer the best trading opportunities and ensure a safe environment away from frauds.

2. Select a payment method

Next, you would need to pick a method to pay with. You'll discover that the most popular cryptocurrencies can be purchased in fiat currencies like the US dollar, even though hundreds of cryptocurrencies exist. You will probably need to utilise your ordinary bank account to purchase crypto for the first time.

An experienced investor may wish to exchange part of their current crypto holdings for a different sort of cryptocurrency, such as Solana for Bitcoin.

3. Make sure you have enough money

You must also make sure that you have money in your bank account. It seems like a no-brainer, but to buy crypto, you may need to fund your account first, depending on how you want to pay. Most exchanges offer debit and bank transfers if you're using fiat cash. In some instances, you may also be able to use your credit card to make a transaction, although this may be problematic when dealing with a volatile commodity like cryptocurrencies.

It is possible to utilise cryptocurrencies that you already have in a digital wallet or on another site to fund your trading account. Verify that the assets you're considering may be traded on your crypto exchange. Some platforms feature more trading partners than others, and not all cryptocurrencies can be exchanged directly for each other.

Scrutinise all your options before finalising your purchase since the costs associated with exchanges are subject to change based on what you're purchasing and how you're purchasing it.

4. Choose the best crypto for you

Lastly, and most importantly, decide carefully which cryptocurrency to work with. While cryptocurrency investors have numerous possibilities, there are no guarantees that they will work for everyone. Consider your objectives before making a purchase. Do you expect its value to rise? Is cryptocurrency something you'd want to learn more about? These could help you decide.

Conclusion

Other techniques to mitigate risk in your cryptocurrency portfolio include diversifying your cryptocurrency holdings. Investment in many crypto assets may help protect you from some risks associated with a single cryptocurrency. However you decide, think carefully and weigh your options.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes