It all started very recently, sometime in the early 2000s. In 2009, a new phenomenon popped on the digital market, called Bitcoin. People didn't take it very seriously because they were unfamiliar with the idea and potential of crypto. Some even rejected getting it for free – or for a tiny amount of money.
Those who said 'no' at that point are certainly not happy with their decision right now, right?
Today, Bitcoin is a leading crypto asset, a currency that brought people millions of dollars in profit. In just a single year, Bitcoin's price grew to over $60,000 from only $7000. Imagine the gain of those who purchase it at just $100 in 2013 or even less in the years before that.
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But, it is not as simple as that. Cryptocurrencies come with their set of risks and they can grow and decline at any moment. This is why, if you decide to be an investor in digital currency, you need to consider all the factors to make a wise decision.
This is what this guide is all about – to tell you why and how you can buy cryptocurrencies today.
Understanding Cryptocurrency: Why Invest In It?
Cryptocurrency is a very broad term that includes digital assets with records and transactions verified and maintained by a decentralized blockchain system. The blockchain systems use cryptography, which makes it different from a centralized authority like banks and credit card issuers.
Cryptocurrencies are enjoying a massive popularity surge these days. Just a few years ago, they attracted a niche audience of a limited number of people. As their price increased drastically, the news was all over the world – building interest in millions of people across the globe.
The easiest answer to the question: "why invest in crypto" lies in statistics. Grandviewresearch, for example, has valued the global market at 332 million in 2017, a number that rose to 3.67 billion in just two years. Based on their projections, this number will reach 394.60 billion by 2028.
While the decision on whether to invest or not is up to you, numbers seem to point in the obvious direction – this is a smart investment these days. However, many people have lost a fortune investing in the wrong place or the wrong currency.
That being said, getting informed about your options and methods is always the best first step. Here is a short guide that should get you in the right direction.
This is probably the hardest step of them all – deciding on which crypto to purchase. There are thousands of them available, and numbers change so often that it's hard to keep track of them all, not to mention make a choice.
In the end, it all comes down to your budget, goal, and preference. For example, if you want to dip into the smaller market and invest in crypto you believe could be the next Bitcoin, you will invest small amounts because they cost less. If you want to play more safely, you'll need to be prepared to invest more because, right now, popular crypto like Bitcoin and Ethereum cost thousands of dollars.
Ideally, you should be looking at cryptos with sustainable backing projects and a promising future. For this part, research is the most crucial factor. The more you research, the better idea you can get about your options. Based on facts and data, you can make the most informed predictions and therefore, the most promising choices.
Luckily, you don't have to start big right away. There's an option to buy a fraction of a token or invest in several cryptocurrencies to avoid the huge risk of losing all your money.
This is where the real work lies, so don't take research for granted. It's what will determine the success of your investment and maybe even your financial future.
For starters, you'll need a crypto wallet to receive the currency. Make sure to find one that supports the cryptocurrency you wish to purchase.
When it comes to crypto wallets, there are two options: hardware and free software wallets.
As you can assume, the paid version is more secure. It does require an investment, but if you intend to buy and handle large quantities, it's a better option. Some of the most popular wallets are Ledger Nano X with a price of around $120, or perhaps the smaller alternative, Ledger Nano S at around $60.
If you decide on the software version, Exodus and Edge are the two most popular desktop and mobile wallets. They are free, simple to use, but also easier to hack since, after all – both are online.
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Those who are new to the idea of cryptocurrency, and even the ones with some experience, often wonder the same thing: "What's the best place to buy crypto"? WealthSimple has created an amazing guide for purchasing Ethereum which is applicable with almost every digital currency nowadays. According to this guide, there are three best and most popular places to make such a purchase:
When you have your wallet ready, the easiest place to buy cryptocurrency is at an exchange. Places like Coinbase and Binance support most digital coins, including Bitcoin, Litecoin, and Ethereum. It's a great way to trade different currencies, also.
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Purchases on these platforms are made with cards, e-wallets, and wire transfers, but keep in mind that some fees might be applicable (including fees for currency exchange if you aren't using their preferred currency).
Both these options are excellent, but your choice should be determined by your needs and experience. Coinbase is, for example, amazing for beginners. It has two different services – brokerage where you can buy your digital currencies with small transaction fees between 1.49% and 3.99%; and Pro service, where you can buy crypto from other users.
On the other side, you have the company's biggest competitor, Binance. Their low minimum purchase is $1, and they have an amazing reputation with securing their users thanks to the Secure Asset Fund for Users. Binance has even introduced its own crypto coin.
Other popular options are eToro, where you can copy other traders' moves and strategies, as well as BitPanda, one with minor charges for exchanges, but a slightly higher minimum purchase range compared to Coinbase.
Did you know that there are actual ATMs where you can get cryptocurrency around the globe? To use them, you need a wallet where you'll store your digital currency. Next, you need to find the location of such ATMs, if they are available in your area.
How do crypto ATMs work?
The process is pretty straightforward. You just need to scan a QR code found in your wallet with the camera on the ATM. When you put your money in with the card and confirm, the machine will fill your wallet with the purchased amount. Keep in mind that, in most cases, this can take up to a few hours.
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Lastly, WealthSimple points out a very popular option nowadays – exchanges between peers that use crypto. Some platforms enable users to do exactly this, such as Paxful, LocalBitcoins, etc. On these websites, you can transfer currency by using your card, wire transfers, as well as e-wallets (most often PayPal). This is such a popular option these days that peers have started exchanging different cryptocurrencies instead of simply using cash to buy them.
The fees on such sites can differ, and so can your options. When you pick your P2P exchange platform, consider the things you would with a centralized exchange. These include:
Security. This should be your priority, especially since in this case, it falls on you. Such sites will have safety measures in place that you should get familiar with before you start exchanging crypto. But, you still need to check the buyers and sellers and determine if you should trade with them.
Fees. Different P2P trades will have different fees, some that might even get extravagant if you aren't careful. Some won't have any fees at all unless you advertise on their website. Generally, you can expect fees of 1% or less on the seller's side.
Payment options. Unless you plan to pay and buy with currency, you'll need to consider your banking options. Some sellers prefer a certain method and don't accept anything else. So, even if you planned to use your credit card, you might have to load a PayPal account first because the peer requires that type of payment.
Trading volume. The more popular a P2P exchange is, the more options you have for trade. If you're looking for a quick trade, you definitely want to seek sites with high traffic and volume.
Making the actual purchase of crypto is not rocket science – everyone can do it thanks to simple platforms like the ones discussed here. In the end, it all comes down to which crypto you choose, how much you're willing to invest, and how safe you are about buying and storing your new currency.
Remember – this is a work in progress. You should keep researching the field, especially if you own such currency already. Good luck!
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.