How to buy cryptocurrencies is becoming increasingly common, so this article will help you understand this new technology. Cryptocurrencies are digital assets, a new payment method, and a global economic trend.
Basic information before buying cryptocurrencies
In the past, we could say that cryptocurrencies were coins obtained through the mining process. The most famous example is Bitcoin (BTC), over the years programmers have evolved and created other digital currencies inspired by BTC, without needing the mining process, due to the high energy cost involved in the process.
The best definition now for cryptocurrencies would be digital assets secured by encryption.
We can say that they are means of payment, the representation of money in virtual form. That is why each one has its own wallet, where users can receive or send their coins anywhere in the world.
The main concept of cryptocurrencies is decentralization, the creator of Bitcoin, Satoshi Nakamoto, preached financial freedom and people’s dominance over money. Digital currencies are not linked to government entities or bodies.
Why invest in cryptocurrencies?
As far as Blockchain is concerned, this is an idea that will certainly change the world in the coming years. With the massive increase in companies that have adapted to this new technology to improve their operations or accept and trade with cryptocurrencies, cryptocurrency prices have increased immensely. Bitcoin literally touched the clouds, surprising pessimists and enriching early investors who from the beginning believed in the potential and power of blockchain technology.
Investments in cryptocurrencies have generated greater profits, not because of their rapid growth and increasing prices, but because of the currency’s decentralization. Cryptocurrencies do not need banks and are not controlled by any government, which would charge fees on transactions and currency conversions.
They are like having only dollars in the world. In addition, lower currency conversion rates and lower transaction costs compared to what users do use their bank accounts. They are not only convenient and comfortable but also easy to operate and manage. Interestingly, cryptocurrencies have allowed people and organizations around the world to trade without intermediation from banks and even governments.
So don’t miss the opportunity of the century to invest in cryptocurrencies, but also dig deeper into Blockchain. There is no doubt that professionals with knowledge in blockchain will be one step ahead.
1.2 When is the right time to invest in cryptocurrencies? Strategy to invest in Bitcoin safely
This week the cryptocurrency market has seen price hikes from all sides, and for both Bitcoin and Ethereum. There are often drastic and sudden price changes in the digital currency, and whenever the price starts to move, there is never a shortage of doubts around whether it is the right time to buy or not.
As with any type of investment, this can cause a lot of anxiety, uncertainty or fear of participating in everything.
One of the best strategies that I think people can employ is the average dollar cost, effectively reducing its exposure to price changes by investing over a period of time longer. It’s very simple: think of an amount of money that you are willing to spend at a regular rate ($ 100 a week, for example), instead of investing more capital at once, that way you will buy Bitcoin in different price ranges, take advantage of highs or falls.
You bought 100 dollars of Bitcoin for $ 2,000;
Bitcoin ended up dropping to 1,900 dollars and you scheduled to buy more next week ($ 100);
Assuming that the price has recovered in the following week, you have practically already recovered the fact that you bought on the high;
Did you buy and the trend was up? Great! You are already profiting anyway and will buy back later. Did it drop a little after buying again? Remember that you bought $ 2,000, you are not at a loss.
In short: usually in a downward trend, never invest 100% of the desired value in one go, buy-in split orders. Remembering that it is always interesting to diversify your investments between several digital assets and never leave all your eggs in one basket. Example: 20% in Ethereum, 20% in PIVX, 40% in Bitcoin and 20% in WAVES.
1.3 Why buy cryptocurrencies now?
Check out the list of digital currencies with the largest market caps below:
It is important to appreciate that, although the high market volatility is not very attractive for some investors, for many it means the opportunity to see their investments appreciate quickly and in the short term. However, the best tip is to buy cryptocurrencies while digital currency prices are low.
For example, the biggest currency on the market, Bitcoin (BTC), saw some declines this year, which means a good opportunity to buy Bitcoin (BTC), and sell when its price goes up again, thus making a profit. The second-largest currency on the market, Ethereum, also fell, which is also a good time to buy Ethereum. But where and how to buy cryptocurrencies?
Where and how to buy cryptocurrencies?
Investing in the cryptocurrency market has never been easier. Today, it is already possible to find several exchanges and brokers for the purchase of cryptocurrencies online.
Exchanges are recommended for more experienced investors, their platforms are much more complex and less secure. Brokers, on the other hand, are ideal for the new investor, as they are easier to understand and more secure platforms, providing greater customer support. And most work with the CFDs ( Contracts for Difference ) system.
1.2 List of cryptocurrency brokers
Although the market is quite new, the list of cryptocurrency brokers has been growing at a fast pace. Today there are already dozens of companies offering this service and each of them has its own particularities. Therefore, it is necessary to be attentive when choosing the best platform.
The choice of a broker will depend a lot on your personal profile. For example, there are brokerages that offer mobile applications. Others have lower rates. Some help the user to compile their transactions for the income tax return, and so on.
In addition, competition is global, as you can trade with foreign brokers. An advantage of foreign brokers is the greater trading volume. With this, you can trade larger quantities with more liquidity and agility.
In general, seek to know the opinion of other users about that broker. See what they say about security, usability, fees charged and other aspects. Through platforms such as Reclame Aqui, you can enter the name of the exchange and check its “reputation” in the market. Groups specializing in cryptocurrencies are another good source.
There are some brokers that are well known in the Brazilian market. You can check a list of them on the ValorBitcoin website. The tool classifies brokers by price, volume, premium, and other criteria, in addition to offering market reports. Among the main exchanges, it is worth mentioning a few:
1.3 What are the best platforms to buy cryptocurrencies?
Perhaps you are still asking yourself, 'What is the best place to buy cryptocurrencies? How to buy cryptocurrencies? '.
Our specialists carried out a detailed survey among the main brokers and exchanges in the market, considering the factors of security, ease of navigation, diversity of cryptocurrencies and fees. The following brokerages, which work with CFDs, were selected:
eToro is considered the best broker to buy cryptocurrencies, according to research.
After a general evaluation, the experts chose eToro as the best broker on the market, mainly because it recently launched a new platform, even easier to use. Today considered the leading Social Platform in the investment market, eToro is the one that has the most support solutions for new investors, is regulated by CySEC and FCA, and uses the Secure Socket Layer (SSL) system in all its transactions.
The newest and rarest digital currencies can be found at the Coinbull broker, such as Tron, Ark, Augur, Binance, among others. But, Coinbull has the highest deposit rate among the brokers above and is unregulated.
ForexTB offers 13 different cryptocurrencies, charges the lowest deposit fee. However, its navigation platform is considerably more complex compared to eToro. As a support tool, it has a Demo account and is regulated by CySEC.
How to buy cryptocurrencies? The best payment methods
Most brokers and exchanges accept credit/debit cards, bank transfers and some also Paypal. However, payment methods vary depending on the platform, so it is important to check first before registering.
Credit and debit cards are accepted by most exchanges and brokers. At eToro, a zero deposit fee is charged for any form of payment.
Paypal is a very secure form of payment. The eToro broker is one of the few in the market that accepts Paypal as a form of payment.
1.3 Bank transfer
Bank transfer is the main form of payment for buying cryptocurrencies. It is used by virtually all exchanges, as we saw in the topic of best forms of payment. In addition, it is also used in direct sales (P2P).
To make a payment via bank transfer, the process is simple. If you are buying Bitcoin, the P2P seller informs you of the price he asks for. If you agree, it will pass the details of the account in which you must make the deposit. If you are selling Bitcoin, then you are the one who should inform your bank details to the buyer.
Typically, P2P vendors have a transaction security procedure. In the case of buying cryptocurrencies, they wait for the money to enter the account before sending the cryptocurrencies. In the case of the sale, they wait for the customer to send the Bitcoins before sending the money.
Other ways to get cryptocurrencies
There are now hundreds of cryptocurrencies that can also be obtained through mining. Among the most popular digital currencies, in addition to Bitcoin (BTC) and BitcoinCash (BCH), are Ethereum (ETH), Ethereum Classic (ETC), Dash (DASH), Decred (DCR), and Litecoin (LTC) .
1.2 How to get free cryptocurrencies
In addition to the more traditional ways of buying cryptocurrencies, you can also earn free Bitcoin online, and other cryptocurrencies by participating online in affiliate programs, games, ads and surveys. However, satoshis are generally earned, the smallest possible fraction of Bitcoin (1 satoshi = the billionth part of Bitcoin). And these platforms are often not very reliable.
1.3 Buy cryptocurrencies PayPal
Purchasing cryptocurrencies by PayPal works similarly to purchasing with a credit card. After all, PayPal is usually connected with a card or bank account, acting as an intermediary between the exchange and the account/card. Exchanges usually offer a field to connect to your PayPal account, allowing the transaction.
Both when buying with Bitcoin and when buying with a card, companies usually do an information check. Therefore, these means of payment are generally available only to accounts verified by the KYC process. This is because both PayPal and credit cards may be subject to usage restrictions for cryptocurrencies.
After purchasing your cryptocurrencies, it’s time to choose the best place to store them. Many people prefer to leave on exchanges, because of the practicality and supposed security. However, this is not the best option. If an exchange is the victim of a hacker attack, you could be without your cryptocurrencies forever.
So the really safe way to store your cryptocurrencies is to do so in a wallet. Thus, only you will have access to your money and you will not be at risk of suffering losses from hackers. Although there is no “best portfolio” in general, we have many options to choose from in the market. The best cryptocurrency wallets are divided into three types:
1.1 Online wallets (hot wallets):
These are applications that work connected to the internet. They are very practical for using Bitcoin as a currency on a day-to-day basis, as they enable fast spending.\
However, passwords are in constant contact with the internet, so they are not so secure to keep them stored for a long time;
1.2 Paper wallets:
These wallets can literally store your Bitcoin on a piece of paper, where passwords are noted. They also do not have an internet connection, which makes them the safest among the types of wallets.
They are indicated only to store your Bitcoins safely, as they are not practical for daily use;
1.3 Hardware wallets:
These are specific physical devices for the use of cryptocurrencies. These wallets store private keys inside the device, which does not come into contact with the internet, which makes them very secure.
They can be used to send and receive Bitcoins without risk.
As a tip, give preference to a wallet that is practical to use. At the same time, it needs to be safe enough not to expose you to the risk of loss. This wallet needs to have a password that is only under your control. Thus, strangers and attackers will have a harder time stealing your cryptocurrencies.
How to choose a cryptocurrency platform?
Several details are considered when choosing a cryptocurrency platform. Potential investors can review these parameters before making the final decision. Attention should then be paid to the following points:
The calculation of trading fees is based on the volume of transactions. In reality, these commissions are between 0.01 and 0.5%. As an illustration, take $ 5 from all withdrawals while Coinbase does not charge them. In addition, the costs relating to the purchase of cryptocurrencies by bank card are very high (sometimes 10%).
1.2 Safety and regulation
In order to thwart the financing of illegal activities, each cryptocurrency platform requires its client to enter their personal data to carry out exchanges. In other words, verifying your identity is a parameter that should not be neglected. Verification times vary from platform to platform. If they are short for Coinbase, these times last longer at Kraken.
1.3 Crypto-currencies available
Choosing a cryptocurrency platform also depends on the number of assets traded. The Binance platform stands out from the rest with the long list of cryptocurrencies available on its site. However, other exchange sites have a few more highly traded assets.
1.4 Liquidity and trading volume
The higher the trading volume, the more liquidity there is on a cryptocurrency platform. Either way, the speed of the transaction will prevent price volatility.
Is it possible to buy cryptocurrencies anonymously?
If there is one question that torments investors, it is whether one can buy cryptocurrency without verification or anonymously. The golden rule is to acquire digital currencies on a regulated site. However, anonymous transactions are possible on sites approved by financial organizations.
Indeed, there are crypto-asset exchange platforms that accept the opening of an account without any verification. So you can mention whatever name you like. However, it is not conceivable to purchase the currencies with fiat currency on these sites.
By what alchemy can we buy cryptographic currency without verification? Several options are available to you to achieve this goal:
Transfer cryptos purchased by a loved one to your wallet.
Buy digital assets from people you meet online through peer-to-peer exchange platforms.
Use sites that accept anonymous payment methods like prepaid cards.
1. What is a cryptocurrency?
The term cryptocurrency refers to both a virtual currency and the peer-to-peer payment system that goes with it. These are virtual currencies without physical media, not regulated by a central body and whose value is not indexed to a legal currency or a commodity.
2. How to invest in a cryptocurrency?
You can invest in cryptocurrency by purchasing tokens through a specialized platform. You can also trade cryptocurrencies through an online broker like eToro
by investing in a derivative that has virtual currency as its underlying. Be careful in any case to only devote a very small part of your assets to this type of investment.
3. What makes the value of a virtual currency?
The price of a cryptocurrency is linked to the confidence it inspires among investors, to its technical characteristics, to the ease with which we can or not buy things in real life with it, but also to the possible more -value that the virtual currency will allow achieving.
4. What is a cryptocurrency used for?
There are several reasons to use a cryptocurrency: to buy goods and services, to realize short-term capital gain for the purpose of speculation or to invest for the long term in an innovative technology that is believed to be will revolutionize digital transactions.
While there are many ways to buy crypto these days, by far the easiest and fastest way is through an online broker.
Finally, remember that all transactions come with risk, so don’t invest more than you can afford to lose.