The world of Cryptocurrency investing and trading is often very confusing to people that are on the outside looking in. You may have seen countless stories about how people have become millionaires overnight by Bitcoin trading and you want to get in on the action – the issue is how do you get in on the action?
This easy-to-follow step by step guide will take you all the way to purchasing your first Bitcoin.
Step One – Get a Wallet
There are many different types of Crypto wallets and I won’t go into too much detail here, needless to say, you will need to choose storage for your crypto funds.
A digital wallet works in the same way as a wallet that you carry around with you on a daily basis. Holding your currency and keeping it safe and away from sticky fingers. In fact, it has exactly the same function – holds your Cryptocurrency and keeps it away from hackers. The best wallets are hardware ones although there are many decent software wallets available.
If you’re looking to only dabble in Crypto, then, it is best to opt for a software wallet as it is cheaper (sometimes free). If you’re looking to purchase a lot of Bitcoin or you’re sure that your investment will grow then buy a hardware wallet as these are much safer.
Step Two – Understand Bitcoin
Whenever the Cryptocurrency topic comes up in the pub, a regular comment is similar to a phrase said by my friend:
“I am going home to buy a few Bitcoin.”
This is a misconception that catches many people while the first time they go to buy Bitcoin. However, most likely you won’t be buying even one whole Bitcoin the first time. Most investors and traders haven’t purchased one Bitcoin in years of trading.
Currently, the price of Bitcoin is around $12 thousand. The price of Bitcoin has recovered staggeringly since a crash at the end of 2017 and now it is rising fast. With the cost of a coin being so high, people often buy fractions of a coin.
Step Three – Choosing an Exchange
This next step involves choosing your exchange. Exchange is the easiest place to buy Bitcoin and it is where people often start their Crypto trading journey.
Exchanges vary widely in what they offer, so make sure you check out the following things when choosing.
Fees – Make sure you’re not buying from an Exchange that charges unreasonable fees. At the opposite, some exchanges are very cheap but these should be avoided too. Expensive exchanges are just looking to extort as much money from traders as possible for transacting. Cheap exchanges tend not to invest back into the exchange and that is a cause of poor user interfaces (glitches/bugs) and often means they aren’t very secure.
Crypto Prices – This is another area where exchanges are wildly different. Some don’t even price their currency in real time which means you might be paying way above market value on a historic price. Check the exchange you’re using prices the coins competitively and is operational in real time.
Security – This is a bit of a bugbear on exchanges. Some of them are quite loose with their security protocols which leads to less painful user experience when signing in and transacting but a very painful experience when money gets stolen.
Other exchanges are very security tight and require multiple checks on transactions over certain values and two-step verification etc. These can sometimes be tedious to get through especially if you’re chomping at the bit to get your first Bitcoin, but in the long run, they are worth the hassle because you’re kept safe.
Functionality – At this point, you need to look at is how easy the exchange is to use on a daily basis and how easy it is to deposit funds and withdraw them. Another key aspect is ensuring the exchange works well in your country and that your payment method is accepted.
Last but certainly not least, while the coin of today (and this article) is Bitcoin, you want to find an exchange that supports many different Cryptocurrencies. Most support Bitcoin and some exclusively trade in Bitcoin. There will come a point in your Crypto trading career when Bitcoin isn’t as attractive as another prospect. Make sure you can switch up tokens easily when needed.
In order to make this guide clear and understandable, we will be using the process of buying Bitcoin on CEX.IO as this is the most easy-to-use exchange I have come across. With comprehensive and thus far impenetrable (they have never been hacked) security processes, reasonable and fair fee structures and functionality that is unrivaled elsewhere, there isn’t really much reason against choosing CEX.IO.
Step Four – Understanding When to Buy
Once you’re registered on CEX.IO you will be onto the exchange and able to purchase bitcoins for the first time. You will notice that you have graphs showing Bitcoin’s trading history as well as buy and sell prices. For buying your first Bitcoin you should look at the buy price and then look at the charts. It is best to buy Bitcoin on a dip to make sure you’re getting the largest part of Bitcoin you can for your money.
Purchasing Bitcoin on CEX.IO is a straightforward process that can be performed via most major credit cards. Simply input the amount you wish to buy and before long your account will be credited with your purchase. Remember at this point the amount is held in the exchange wallet and it should be withdrawn to your personal wallet.
Mind that when it comes to dealing with crypto you cannot be too careful about the safety of your funds. You should always ensure that you are making a habit of transferring funds from your account to your personal wallet.
Enjoy your Bitcoin and happy trading!