Buy Cryptocurrency | How, Which, Where & Why?

Buy Cryptocurrency

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Choosing Which Cryptocurrency To Buy

Buying cryptocurrency is a straightforward process for those who understand the system. However, it can seem daunting or complicated to novice users. As the industry continues to grow and develop, new currencies are continually being launched, while others, which found little investor traction, fade away into the history books.

Choosing which currency to invest in can either be a simple, straight forward process, or it can be a complicated one. One option is to simply decide you want to own some Bitcoin and maybe some XRP, and that’s great. The other option is a more data-driven approach. You decide to be analytical and study which cryptocurrency has been providing the best results over a period of time. In the latter, things can get quite complicated as you dive in technical and fundamental analysis. Choosing which route you’d like to take highly depends on how much you’re investing and how much time you’re willing to dedicate.

If you opt for the analytical route, one thing we recommend is to just pick a handful of coins and perform your study on those. You’ll be tempted to study different coins, but don’t make this mistake. You’ll end up burning your time and it would be even harder to come to a conclusion. Instead, pick 3 to 7 coins and stick to those.

There are many reasons why individuals buy cryptocurrencies. Some believe in blockchain technology and would like to support it, while others see cryptocurrency as an investment. Then there are those who like using it because it is convenient to make purchases or payments. Whatever the reason for wanting to buy cryptocurrency, we will show you all the different ways there are to buy crypto.

How to Buy Cryptocurrency

The first step to buying cryptocurrency is determining which one you intend to buy. With over 2,500 different currencies, making a choice could be harder than you think. Deciding will very much depend on the purpose of the purchase. For trading and investment’s sake, the most popular cryptocurrencies are the ones with the highest market caps. Currently, these are Bitcoin, Ethereum, Ripple, Bitcoin Cash, Tether, and Litecoin.

Once you have decided which coin to purchase, you need to understand how much of it you intend to buy, what payment method you will use, and what additional features or tools you need, before or after your purchase. Next, you will probably follow some, or all these steps:

  1. Register or log in to an account with a reputable cryptocurrency exchange which offers the cryptocurrency you are after.
  2. Choose one of the payment methods (such as card, bank transfer or cash) accepted by the platform.
  3. Select the amount of cryptocurrency or original currency you wish to exchange.
  4. Fund your account or provide the necessary currency to affect the exchange.
  5. The exchange should deposit your new cryptocurrency into your account as soon as the funds are received, or shortly afterwards.

Cryptocurrencies are often listed with their three-digit ticker code, such as BTC for Bitcoin, and ETH for Ethereum. Due to the high concentration of cryptocurrencies, it is easy to mistake one ticker code for another. You should also be aware that the price of any cryptocurrency at any moment in time can vary, sometimes significantly, between one platform and another.

Buy Cryptocurrency via Credit or Debit Card

Buying cryptocurrency with a credit or debit card is one of the most popular methods since it offers a fast, convenient and easy way to get hold of the digital asset. As a result of their global appeal, cards, especially Visa and Mastercard, are accepted by the vast majority of reputable platforms.

While most cryptocurrency exchanges will charge an additional fee for making deposits with a debit or credit card, Bitpanda does not. In operation since 2014, Bitpanda is a European exchange with over 1 million users worldwide. It is suitable for both novice users and experienced traders, offering low deposits and high withdrawal limits. Furthermore, Bitpanda allows you to buy Bitcoin, IOTA, Dash and many more cryptocurrencies using your debit or credit card.

Instead of buying cryptocurrencies, you can opt to invest in them, without owning them. This can be done by buying cryptocurrency Contracts for Difference (CFDs). These financial instruments are traded on dedicated trading platforms, such as Plus500, and allow you to leverage your investment capital to open positions which are multiple times larger. Trading cryptocurrency CFDs involves considerable risk and should only be undertaken by experienced traders who can afford the potential losses.

Further examples of platforms which allow you to invest or buy cryptocurrencies with a credit or debit card include:

Buy Cryptocurrency via PayPal

Like credit and debit cards, PayPal is an extremely popular online payment method, trusted by millions across the world. While this eWallet makes payments fast and simple, accepting it can be expensive for platforms. As a result, practically no major cryptocurrency exchange platform accepts PayPal.

Nevertheless, you can buy crypto with PayPal through the P2P platform, LocalBitcoins or via eToro. This platform links cryptocurrency buyers and sellers, allowing them to negotiate directly all the terms of the sale. As a result, if you can locate a seller who will accept a PayPal payment, you can proceed in this manner. While LocalBitcoins offers several useful features, including a buyer and seller rating, it is currently only limited to the sale of Bitcoin.

If you would like to invest in cryptocurrency with PayPal, your best option is to choose a cryptocurrency CFD trading platform. eToro allows you to deposit funds using PayPal, or a multitude of other methods. The platform offers several cryptocurrency CFDs, as well as other markets. In addition, eToro also includes a social trading platform, where you can automatically emulate the trades being made by other traders.

Examples of trading platforms which allow you to buy cryptocurrency CFDs with PayPal include:

Buy Cryptocurrency Via a Bank Transfer

It might surprise some users to learn that it is possible to buy cryptocurrency with a bank transfer. This payment method is widely accepted since platforms do not incur any fees for accepting it. As a result, deposits via bank transfer are normally free, unlike those made with a debit or credit card.

Coinbase is one of the largest cryptocurrency exchanges in the world, and, like most exchanges, does not charge any fees for deposits made with a bank transfer. Along with Bitcoin, you can use Coinbase to buy Litecoin, Ethereum, Ethereum Classic, and a handful of other digital currencies. Coinbase accepts several fiat currencies, including EUR and USD, however, if your base currency is not supported, you can conveniently request a currency conversion when making your bank transfer.

Several other platforms allow you to buy cryptocurrencies with a bank transfer. These include:

Buy Cryptocurrency Anonymously

Anonymity has long been considered as being a great feature of cryptocurrency by some, and a serious liability by others. As more platforms are pressured or choose to increase Know Your Customer (KYC) and due diligence procedures, it is becoming much harder to buy cryptocurrency anonymously.

There are, of course, a few exceptions, such as cryptocurrency ATMs. Located across the world, these ATMs provide one, or sometimes more cryptocurrencies in exchange for fiat currency. The challenging side of cryptocurrency ATMs is finding one in your area which supports the cryptocurrency you desire.

Another way to buy cryptocurrencies anonymously is to meet an online seller, through a forum or P2P platform, such as LocalBitcoins, and negotiate the transaction without providing personal details. This method can be risky since fraudsters operate on such sites, so beware of the potential dangers.

Where to Buy Cryptocurrency

Around the world, both online and offline, there are several locations where to buy cryptocurrency. These different locations charge different fees based on the services and solutions which they offer. You should understand which of these features you need and opt to buy your cryptocurrency from the location which satisfies your needs without offering too many extra features. This will probably reduce the fee and complexity of your transaction.

1. Online

There is a variety of online, reputable, cryptocurrency exchanges and brokers which offer numerous services targeting either new traders, experienced investors, or both. Generally, brokerage service providers offer the simplest way to buy cryptocurrency, but also normally charge the highest fees.

2. With Cash

Using cash to buy cryptocurrency is possible, with ATMs offering the easiest and safest solution. If you intend to buy Bitcoin, you can opt to use LocalBitcoins to negotiate with sellers who would accept cash (or cheques). For other cryptocurrencies, you would need to search on other platforms or forums for sellers in your area willing to accept cash. Be careful though, if you’re just starting out we don’t recommend you to buy crypto with cash.

Trading Cryptocurrency

Apart from using the traditional fiat currencies, such as GBP, EUR, USD or CAD, to buy cryptocurrencies, you can also use one cryptocurrency to buy another. This process is especially useful for those who obtained cryptocurrency from mining it or through an airdrop but would like to change it to a different one. Additionally, one may find cryptocurrency trading as a lucrative way to make a good profit or a living out of it.

With a few exceptions, cryptocurrency exchanges allow you to trade all the currencies which they support. Binance, one of the largest exchange platforms, specializes in facilitating crypto to crypto transactions. The platform offers over 400 different cryptocurrencies, together with some of the lowest trading fees in the industry.

Geographical Restrictions

Trading cryptocurrency is permitted in most jurisdictions, with some exceptions, such as Morocco and Pakistan. Other countries, such as the US, impose certain territorial restrictions. As a result, you may not be able to open an account with certain platforms, depending on where you are based. For example:

  • US users cannot open an account with Binance, ChangeNOW or BitMEX
  • Similarly, US users cannot open an account with Plus500, IQ Option or XTB, but this is since CFD trading is banned in the country
  • Australian users cannot open an account with IQ Option and Bitpanda

Generally, users from Europe are accepted on most reputable trading platforms and exchanges, giving such users the greatest choice of which platform to use.

Cryptocurrency CFDs

Cryptocurrency CFDs are a relatively new market and offer traders the possibility to open both long and short positions based on their belief of the currency’s price at a point in the future. Normally, platforms which support CFD trading offer the option to trade on margin, allowing traders to purchase more than they would otherwise afford on their own. This financing comes at a cost and increases the trader’s exposure to the risk of losing more or all the investment capital.

Remember, you should only trade cryptocurrency CFDs if you fully understand the risks involved and are able to afford the potential of losing some or all your investment.

Where to Store Cryptocurrency

Before you buy your cryptocurrency, you need to ensure you’ve got a safe place where to store it. Many reputable cryptocurrency exchanges and brokers offer an in-built wallet which you can use to store your funds. While this option is secure, and, in a few cases, insured, you should seek to store your cryptocurrency in hardware wallets when you don’t intend to use them imminently.

There is a variety of hardware wallets, featuring different functions and costing a range of prices. If you intend to buy one or more of the most popular currencies, you will have plenty of options when choosing a suitable wallet. On the other hand, if you intend to buy less popular cryptocurrencies, it may be harder to find a cold storage device which can support them.

Storing cryptocurrency securely is one concern which cryptocurrency CFD traders needn’t bother themselves with. Since investing in CFDs does not include buying the actual cryptocurrency asset, there is no need to plan the logistics of transferring and storing the digital coins. Instead, all information is securely stored on the CFD trading platform and is easily accessible solely by the investor.