We recently ran a post looking at the different ways Maltese citizens can buy cryptos and we got some great feedback – people wanted to learn more. Buying cryptocurrencies for the first time can be a daunting process, largely as there are so many different ways to do so. Once you start dipping your feet into the crypto trading world it becomes less intimidating and you will soon be trading with ease.
At BitStarz News we like to look out for our readers, so we won’t let you head out into the scary crypto trading world alone. There are many charlatan crypto exchanges out there and other ones that are just plain bad, so it pays to safe.
Are you ready? Let’s learn how to buy cryptos!
Deciding Your Investment Amount
Possibly the most important step when it comes to buying and trading cryptos is deciding how much you want to invest in the crypto market. Never invest more than you can afford to lose and live without – this is the golden rule. Your best bet is to save up for a while, putting money aside each month to use as a trading fund.
When you first start out and make your first trades, you will want to start with a small amount like $50 or $100. Play with this money and learn the ropes, don’t be afraid to make mistakes. Once you are comfortable, drop in your investments and get trading!
Picking a Crypto Exchange
Once you have set yourself a realistic and feasible budget, it’s time to pick a crypto exchange. There are many different types out there, and depending on your needs and desires some might be better suited to you than others.As a rule of thumb, if a crypto exchange doesn’t have a know your customer (KYC) processes in place you should steer clear. KYC is where you have to verify that you are who you say you are, with this process usually taking a few days to complete. If an exchange doesn’t have this in place, there is a good chance it’s breaking major trading regulations in your country.
You also need to decide if you want to be able to move your cryptos after you buy them. If you want to be able to spend your cryptos or move them to a different exchange freely, you can instantly rule out platforms like Revolut and Skrill. However, if you’re happy to buy the cryptos and forget about them for a while – or you don’t really care about not actually being able to play with your Bitcoin – then these platforms could be ideal for you. They are by far the simplest platforms to use and are very safe given current user reviews.
Revolut and Skrill – and a handful of others – give users a quick and easy way to get into crypto markets, but not is always what it seems. Some claim to buy cryptos on your behalf, but don’t let you trade them out of the exchange due to anti-money laundering regulations. If you plan on using a crypto trading app that does this, make sure they give you the block reference. This allows you to see your Bitcoin purchase, otherwise you’re probably not actually buying Bitcoin per se.
Revolut and Skrill work by giving you a slice of their crypto exposure, with interest in an underlying crypto asset. This means you’re basically given a piece of paper that says “this is worth 1BTC”, and it is, but you just can’t use it like a Bitcoin – making it kind of pointless. It’s similar to owning Apple stock. Unless you hold a certificated Apple share, there is no tangible proof that the share is yours, you simply have to rely on the fact the exchange actually gave you a real Apple stock – not its own digital version.
We wanted to make sure our understanding was correct, so we reached out to Revolut for clarification All the representative could say was “[when buying Bitcoin,] you are in possession of the value of 1BTC which changes according to the movements on crypto market.” The careful choice of wording gives the impression that you only own the value of 1BTC rather than an actual BTC – so think carefully before you take the easy route.
Next you have to take liquidity into consideration. If a crypto exchange has low liquidity, it means that it will take longer for your trades to be matched up and completed – not ideal if you want to quickly get in or out of a trade. It’s also a good indicator of whether a platform is popular or not – if it’s not popular, there is probably a good reason behind it. Check out CoinMarketCap’s 24-hour trade volume rankings for more information on current exchange liquidity.
Pick an exchange that has low fees, otherwise if you make trades frequently you could end up losing a large portion of your profits to commissions – much like traditional investing platforms. There are a handful of free to use crypto trading platforms out there, most of these are called decentralized exchanges (DEXs), but there are a few good centralized exchanges that offer zero fees around as well.
Once you have picked your exchange, head on over to the register tab and set yourself up an account. The KYC process can take anywhere from a few minutes to a few hours depending on how busy they are.
When it comes to putting your money into a crypto exchange, it can be a little frightening. This is the first step where you feel the real element of risk that is associated with trading – but don’t worry, most exchanges make this process super simple. You can deposit on most exchanges using a variety of methods, ranging from credit card deposits, bank transfers, or even crypto deposit.
You have to be careful when moving money around, as some countries have stringent rules when it comes to how you can deposit at a crypto exchange. For example, Maltese banks don’t allow money to be deposited into crypto exchanges, so you might need to take a trip to a Bitcoin ATM in order to do this. This is due to banking policies that are anti-crypto at this point in time, but are due to change in the near future.
Unfortunately, most exchanges won’t accept deposits from PayPal, so if your bank doesn’t allow for crypto exchange deposits, head over to your closest Bitcoin ATM and get yourself some Bitcoin to deposit into your account. The process is usually very quick – unless you choose bank transfer – and you should be able to trade within minutes.
Buying Your First Crypto
You have successfully passed the KYC checks, deposited your money, and are now ready to go crypto shopping. Hopefully, you have done your homework on which crypto you want to buy into – or the group of cryptos you’re going to buy. Picking a crypto based on past glories isn’t always a good option, as past performance isn’t an indicator of future performance. Buy the crypto of a project you think is going to change the world, as these will appreciate in value the most.
Once you are ready, head over to the currency pair you wish to buy – the most common is BTC/USD. This means you are going to buy BTC with your USD. Type in the amount of USD you wish to spend – or BTC you want to buy – select the price at which you wish to buy, make sure you can afford the trade after commission, double check everything, and hit buy. Congratulations, because if you complete this process, you’ve just successfully bought your first crypto. From there, you can then rinse and repeat if you want to buy other cryptos or more of the same.
Storing Your Cryptos
Now you have bought your first cryptos, you’re going to want to store them – unless you went for the “easy” route we mentioned above. Never ever keep your cryptos on an exchange over the long-term, as they will stay in a hot wallet – the wallets that hackers can access the easiest. You’re going to want to get an external wallet if you want to store your cryptos securely, you can either opt for a hardware wallet or a digital wallet if this is the case. Bitcoin.com has a pretty decent wallet that you can install on your PC or mobile phone, making crypto transactions a breeze. However, if you want to go one step further and keep your cryptos totally safe, you can go for a hardware wallet.
Hardware wallets come in all shapes and sizes, but two of the best are the Nano S by Ledger and the Trezor by SatoshiLabs. Interestingly, both are on sale until October 22nd. All you have to do is move your cryptos from your exchange wallet to one on your PC, then sync the hardware wallet with your PC one. It will then transfer all your cryptos from the PC into your hardware wallet – pretty neat. You can then put your hardware wallet in a safe, or safety deposit box, for safe keeping.
It’s important that you keep your 24-word seed phrase secure. Write it down on a piece of paper and put it somewhere it won’t get lost. This will allow you to recover any cryptos that were on a hardware ledger should it fail or go missing. Never share this with anyone, as it will give them complete access to your crypto balance.
Sit Back and Relax – or Splash the Digital Cash!
Whatever you do next is totally up to you. You can either sit back, relax, and wait for the next bull run or you can head out and start spending your new cryptos. It must be noted that you can’t spend your cryptos is you used Revolut, Skrill, or other apps of that nature, so think carefully about where you buy. There are so many ways you can spend your cryptos, and buying items with cryptos unlock new doors and even VIP packages. The White Company specializes in crypto experiences and luxury goods that can only be bought with crypto. Around the world, you can buy houses, cars, paintings, and even your groceries using cryptos. The possibilities are nearly endless, in part thanks to Coinbase and its new voucher system.
It’s important to remember that even just buying cryptos makes you one of the early adopters of a new technology that will likely change the way we interact with the world. Cryptocurrencies have the power to revolutionize the world and bring us all closer together. With that in mind, don’t forget to share your new-found knowledge with your friends to help the crypto revolution grow. Crypto is the future, so welcome to the party!