How to Buy Cryptocurrency for Beginners:
An Ultimate Guide
Time to read: 10 min
An Ultimate Guide on How to Buy Cryptocurrency for Beginners
It's been 15 years since Bitcoin was launched, and even those who initially regarded it as an experimental project must admit: cryptocurrency is gradually becoming an integral part of our daily lives. At the same time, the number of services where you can buy cryptocurrency is also expanding.
In this article, we will explore topical issues such as what cryptocurrency is, the main ways how to buy cryptocurrency for beginners, and also discuss all the positive and negative aspects of this type of investment in 2024.
What Is a Cryptocurrency?
Before we explore how to purchase cryptocurrency, let’s start with the basic definitions. Cryptocurrency is a digital unit issued on the Internet, and its principles are based on cryptography. The creation of all cryptocurrencies relies on blockchain technology — a chain of blocks organized according to specific rules, whose immutability is secured through cryptography. The blockchain is not controlled by any financial authority (such as a bank) or government. Instead, the system operates on a peer-to-peer computer network made up of user computers (nodes).
In simple terms, cryptocurrency is a means of payment that exists exclusively in electronic form and represents a specific mathematical code. In the circulation process of these assets, an electronic signature is used, encrypted using cryptographic methods — hence the name. Individual units of cryptocurrency are called coins. As mentioned before, these coins exist only online and have no physical form, unlike traditional money.
Types of Cryptocurrencies
Today, there are about 24,000 different cryptocurrencies in the market, which can be sorted into at least a hundred categories. The same asset can be classified into several categories at the same time, depending on the criteria considered. However, one of the most common ways to classify cryptocurrencies divides them into two main types: coins and tokens.
Crypto Coins
Crypto coins typically operate on their own blockchain platforms. However, some platforms like Ripple may use different types of distributed ledger technology, instead of the blockchain. Almost all popular and well-established cryptocurrencies can be used to buy goods and services function in the same way as regular currencies. While some digital coins aim to challenge conventional fiat money, others are tailored for specific industries or uses. Still, regardless of their focus, all cryptocurrencies provide the essential features needed to manage, record, and secure transactions on their networks.
In addition to payments, coins usually play an important role in infrastructure. For example, Ethereum allows users to develop and run decentralized applications (dApps) on its network.
Crypto Tokens
The key difference between tokens and coins is that tokens usually do not have their own blockchain. Instead, they are used in decentralized applications built on other blockchains, such as Ethereum or Binance Smart Chain, adhering to their specific standards. Tokens can be used to purchase goods and services within dApps or to receive certain benefits, such as preferential commissions and participation in voting on project development.
Tokens can be divided into several main categories:
Utility. These are necessary for performing certain functions within the system. Utility tokens are usually distributed at ICO/IEO to provide early value to the company's product or service.
Security. They serve as digital analogues of securities and can give their holders the right to partial management of the company, recorded in a smart contract.
DeFi. DeFi project tokens allow you to earn on yield farming, participate in decentralized governance, trade, create synthetic assets, and much more.
NFT (Non-Fungible Tokens). An NFT is a unique, non-replicable, and indivisible digital asset widely used in the gaming industry, metaverses, and DeFi projects.
Ways to Buy Cryptocurrency
A lot of time has passed since the creation of the very first cryptocurrency exchange, Mt. Gox, and the crypto sector has come a long way since then. Today, there are a variety of ways to buy cryptocurrency for beginners.
Centralized Exchange
Centralized exchanges (CEXs) are the most popular way of buying crypto for beginners. CEXs are run by an organization that controls all operations, and provides maintenance, development, and security, similar to a traditional stock exchange. Transactions on these exchanges are subject to third-party fees, which cover the costs of facilitating interactions between buyers and sellers. In addition, in most cases they support fiat, meaning you can buy cryptocurrency for traditional currencies.
Therefore, for those just getting acquainted with the crypto sector and learning how to buy cryptocurrency, centralized exchanges such as Switchere.com offer the most convenient entry point.
Decentralized Exchanges
Decentralized exchanges (DEXs) let you trade Bitcoin and other altcoins freely, without the limits and third-party involvement typical of centralized platforms. On such exchanges, your account functions as a wallet, allowing direct transfers to and from it.
There are currently about a hundred decentralized protocols, some still in development and others already in active use for trading. They all share one common feature: the funds always remain under the user's control, which eliminates the security issues often seen in centralized exchanges.
All-in-One Exchanges
Hybrid cryptocurrency exchanges (HEXs), or all-in-one crypto platforms, may soon replace CEXs and DEXs. Hybrid exchanges aim to achieve the perfect balance by combining the positive aspects of centralized exchanges — such as collaboration with large investors and trust from many users — with the advantages of decentralized exchanges, which include reliable storage and the absence of a central authority.
Crypto ATMs
Crypto ATMs, also known as Bitcoin ATMs, are essentially exchangers embedded in publicly accessible hardware devices and are another good way to buy crypto for beginners. With their help, you can buy and sell cryptocurrencies, though typically only the most popular ones like Bitcoin, Ethereum, XRP, Dash, Dogecoin, Tether, etc.
A crypto ATM resembles a regular ATM; it is also equipped with a screen, keyboard, and bill acceptor. You can find these machines in shopping centers and other public spaces in large cities.
Cryptocurrency Brokers
A cryptocurrency broker is an intermediary that helps make transactions with digital currency and charges a commission for its services. Trading on an exchange requires a lot of knowledge and skills that a beginner might not have. A brokerage company is ready to support a trader at all stages of trading, providing assistance in opening accounts, placing buy/sell orders, and finding suitable counterparties.
It's important to note that brokers set the prices at which assets are traded. These prices may be based on quotes from well-known exchanges, liquidity providers, and financial agencies. However, brokers may also use non-market quotes to trigger traders' stop-loss orders.
How to Buy Cryptocurrency As a Beginner
Newbies who have recently become aware of the cryptocurrency market amid its rise may have several questions: What is the best crypto to buy for beginners? How and where can I buy cryptocurrency? And is it really worth investing in? Below, you will find a simple, step-by-step guide on how to buy cryptocurrency for beginners.
Decide on a Cryptocurrency You'd Like to Invest In
We do not provide investment advice on when to buy and sell crypto for beginners, nor do we recommend that you follow the advice of people, even experts, who advocate investing in a particular currency. Always conduct your own research and consider all the risks.
Of course, Bitcoin remains the primary investment asset among cryptocurrencies. However, there are tens of thousands of other coins with their own advantages, disadvantages, and prospects.
Still, here are some factors to consider when choosing which crypto to buy for beginners:
- Project value
- White Paper
- Reputable team
- Open source code and its timely updates
- No unrealistic promises
Taking these factors into account in the early stages can help ensure that a coin has long-term prospects, is useful, and therefore has the potential to increase in price.
Choose a Cryptocurrency Exchange or Platform
When choosing an exchange for buying crypto for beginners, finding the optimal balance among all factors is crucial. Exchanges differ in their approach to security, user interface, and regulation. The key is to be as informed as possible, considering all options along with their pros and cons, and learning to think long-term. Ultimately, you can experiment with different exchanges by exchanging small amounts to determine which one you find the most comfortable.
Create an Account and Get Verified
Once you’ve selected an exchange, the next thing is to register an account and get verified. This process typically involves providing your email address, setting a password, and sometimes, verifying your identity through some documentation. Keep in mind that Know Your Customer (KYC) process is crucial for preventing fraud and meeting regulatory requirements.
Fund Your Account
After verification, you'll need to deposit funds into your account. Most exchanges support a variety of funding methods, including bank transfers, credit cards, and sometimes even PayPal. Choose the method that best suits your needs in terms of fees, speed, and convenience.
Place an Order to Buy Cryptocurrency
Once your funds are deposited, you can place an order to buy some crypto. You'll need to choose the trading pair and specify the amount of cryptocurrency you want to purchase.
Select a Storage Option
After purchasing cryptocurrency, you have to decide where to store it. You can keep it on the exchange or transfer it to a personal wallet. While exchanges are convenient for active trading, personal wallets offer greater security for long-term storage.
Transfer Your Cryptocurrency
If you choose to use a personal wallet, the final step is to transfer your cryptocurrency from the exchange to your wallet. Ensure you double-check the recipient's wallet address before confirming the transfer to avoid losing your funds. And you’re done!
How to Keep Your Cryptocurrency Secure
Now that we've explored how to purchase cryptocurrency, let’s move on to other important aspects. Whatever cryptocurrency you choose to invest in, you should secure a wallet in advance to store it — or more precisely, to store the combination of keys that confirm your right to own and transfer/receive these assets.
You can choose either a software or a hardware wallet. The former allows easy access to your currency at any time and enables active trading. Hardware wallets, on the other hand, are physical devices similar to USB drives. They are more secure than software wallets because they store keys offline, away from the Internet. They are ideal for storing assets that you don’t plan to use for a while.
- Examples of software wallets: Exodus, Edge, Metamask.
- Examples of hardware wallets: Ledger, Trezor, Safepal.
Pros and Cons of Investing in Crypto
Today, cryptocurrency is becoming increasingly popular as an investment instrument and there are many reasons for this.
- Potentially high returns: The crypto market's volatility is not only a risk but also an opportunity to earn significant returns. Therefore, cryptocurrency investments can be particularly appealing to investors interested in rapid portfolio growth.
- The deflationary nature of cryptocurrencies: Many cryptocurrencies have a limited supply of coins, which can potentially lead to an increase in their value over time due to this scarcity.
- Technological and innovative assets: Cryptocurrencies and blockchain bring innovation to financial technologies, offering new ways to conduct and manage transactions.
- Fast and confidential transactions: Cryptocurrencies enable transactions to be carried out almost instantly worldwide while providing a high level of privacy.
- Large selection of available assets for investment: There are many different cryptocurrencies and tokens, each offering unique features and capabilities.
Still, like any investment asset, crypto has its drawbacks. Among the most serious are:
- High risks: Investing in cryptocurrencies involves high volatility and uncertainty, which may result in significant financial losses.
- Difficulty of forecasting: The cryptocurrency market is extremely unpredictable, and even experienced analysts can be wrong in their forecasts.
- A large number of scammers in the industry: The cryptocurrency market attracts scammers who can take advantage of the technology's inherent complexity and anonymity to deceive investors. This, in turn, damages the industry’s reputation and slows its development.
Tips and Tricks on Buying Crypto for Beginners
To succeed in the crypto industry, you need to know not only how to buy cryptocurrency, but also how to plan effectively, persist in your efforts, and continually strive to gain new knowledge. Below are some important tips that will help you navigate the initial stages of investing in digital currencies.
Watch the Volatility
Investing in cryptocurrency can be both profitable and unprofitable, but there are ways to minimize the risks. Choose a clear strategy and stick to it, despite any price fluctuations. Remember that cryptocurrency is volatile by nature; it's unrealistic to expect the asset to only increase in value. It is generally believed that the optimal time to buy cryptocurrency for beginners is when it has remained at a stable, low level for some time. Therefore, it's unwise to ‘buy high’ since the price is likely to subsequently fall.
Invest Only What You Can Afford to Lose
Don't invest more than you can afford to lose. This is the number one rule not just for cryptocurrency traders, but for all investors. If you're struggling to pay your bills, then delay investing until you have some extra money — never take out loans or get into debt for these purposes.
Practice Proper Storage and Security Store
Make sure to choose a reliable wallet for storing funds. It is best to focus on services that are not primarily related to storage. The owner of the funds must be responsible for their safety — this is the essence of decentralization. Additionally, it is safer in terms of protection from hacker attacks. When choosing storage for cryptocurrencies, consider several options at once. It is better if the investments are distributed across multiple wallets rather than concentrated in one.
Use Two-Factor Authentication (2FA)
When working with an exchange, it is necessary to enable two-factor authentication (2FA) to secure your account. For example, you can set this up through the Google Authenticator app or via a text message to your phone. When using Google Authenticator, be sure to save the backup key. It is also advisable to use a complex password and a secure email address for registration, with 2FA enabled on the email as well.
Keep Your Private Keys Safe
Keep your twelve-word seed phrase safe. A seed phrase is the master key to your cryptocurrency wallet. Anyone who gains access to it can freely access your wallet and all the funds stored there. Therefore, make sure it is not written down in any visible place.
Also, handle private keys with care. A private key functions similarly to a seed phrase but provides access only to a specific type of asset. For instance, all Ethereum coins are controlled by a single Ethereum private key. Bitcoin and other cryptocurrencies use many private keys, each controlling one address. If one key is compromised, it could potentially put the others at risk as well. Therefore, store these keys in the safest possible place.
Other Ways to Invest in Cryptocurrenc
The crypto market offers many ways to invest in cryptocurrency beyond the standard crypto purchase. Although it's better for beginners not to dive straight into trading but to start by buying a small amount of cryptocurrency and holding it, let's consider other investment methods suitable for more experienced traders.
- Crypto ETFs: A cryptocurrency ETF is an exchange-traded fund whose price is tied to one or more digital assets. Crypto ETFs make it easier to access cryptocurrency investments for stock market investors, both institutional and retail. In January 2024, the Securities and Exchange Commission (SEC) approved several ETFs that invest directly in Bitcoin.
- Crypto futures: Crypto futures are a way to invest in cryptocurrency based on its predicted future price. Essentially, a futures contract is an agreement between two parties to sell or buy digital currency at a future date for a predetermined price. At the end of the contract, the asset is sold, thereby closing the contract.
- Crypto exchange or broker stocks: Buying individual stocks of companies within the crypto industry, such as crypto exchanges, bitcoin mining companies, and banks that provide solutions for crypto companies, is another way to invest in cryptocurrency. However, novice investors should be aware that this strategy carries risks — various market factors can cause the stock prices to drop significantly.
Join the Safest Way to Buy Cryptocurrencies at Switchere
If you're ready to start investing in crypto, Switchere.com comes as a perfect exchange choice that offers one of the safest and most convenient ways to buy cryptocurrency for beginners. With its robust security measures and straightforward purchasing process, Switchere.com makes it easy for beginners and seasoned investors alike to purchase crypto securely.
At Switchere, you can buy crypto with a credit card issued by Visa, Mastercard, and Maestro, as well as through direct bank transfers or Apple Pay. Additionally, Switchere has a full-featured mobile app available for both iOS and Android devices, allowing you to make crypto transactions and access your account from anywhere.
Final Thoughts
From all of the above, we can conclude that learning how to purchase cryptocurrency does not require you to be a professional or understand IT technologies. It is enough to act carefully and take into account the nuances of cryptocurrency transactions and storage.
However, it is safe to say that digital assets are an extremely risky investment. Therefore, before making your first investments, ensure you understand all the basics of crypto buying for beginners. We have outlined the main steps and aspects of investing in crypto. It is crucial to remember and apply two main rules: first, security comes first; and second, invest only what you can afford to lose.
FAQ
An Ultimate Guide on How to Buy Cryptocurrency for Beginners
It's been 15 years since Bitcoin was launched, and even those who initially regarded it as an experimental project must admit: cryptocurrency is gradually becoming an integral part of our daily lives. At the same time, the number of services where you can buy cryptocurrency is also expanding.
In this article, we will explore topical issues such as what cryptocurrency is, the main ways how to buy cryptocurrency for beginners, and also discuss all the positive and negative aspects of this type of investment in 2024.
What Is a Cryptocurrency?
Before we explore how to purchase cryptocurrency, let’s start with the basic definitions. Cryptocurrency is a digital unit issued on the Internet, and its principles are based on cryptography. The creation of all cryptocurrencies relies on blockchain technology — a chain of blocks organized according to specific rules, whose immutability is secured through cryptography. The blockchain is not controlled by any financial authority (such as a bank) or government. Instead, the system operates on a peer-to-peer computer network made up of user computers (nodes).
In simple terms, cryptocurrency is a means of payment that exists exclusively in electronic form and represents a specific mathematical code. In the circulation process of these assets, an electronic signature is used, encrypted using cryptographic methods — hence the name. Individual units of cryptocurrency are called coins. As mentioned before, these coins exist only online and have no physical form, unlike traditional money.
Types of Cryptocurrencies
Today, there are about 24,000 different cryptocurrencies in the market, which can be sorted into at least a hundred categories. The same asset can be classified into several categories at the same time, depending on the criteria considered. However, one of the most common ways to classify cryptocurrencies divides them into two main types: coins and tokens.
Crypto Coins
Crypto coins typically operate on their own blockchain platforms. However, some platforms like Ripple may use different types of distributed ledger technology, instead of the blockchain. Almost all popular and well-established cryptocurrencies can be used to buy goods and services function in the same way as regular currencies. While some digital coins aim to challenge conventional fiat money, others are tailored for specific industries or uses. Still, regardless of their focus, all cryptocurrencies provide the essential features needed to manage, record, and secure transactions on their networks.
In addition to payments, coins usually play an important role in infrastructure. For example, Ethereum allows users to develop and run decentralized applications (dApps) on its network.
Crypto Tokens
The key difference between tokens and coins is that tokens usually do not have their own blockchain. Instead, they are used in decentralized applications built on other blockchains, such as Ethereum or Binance Smart Chain, adhering to their specific standards. Tokens can be used to purchase goods and services within dApps or to receive certain benefits, such as preferential commissions and participation in voting on project development.
Tokens can be divided into several main categories:
Utility. These are necessary for performing certain functions within the system. Utility tokens are usually distributed at ICO/IEO to provide early value to the company's product or service.
Security. They serve as digital analogues of securities and can give their holders the right to partial management of the company, recorded in a smart contract.
DeFi. DeFi project tokens allow you to earn on yield farming, participate in decentralized governance, trade, create synthetic assets, and much more.
NFT (Non-Fungible Tokens). An NFT is a unique, non-replicable, and indivisible digital asset widely used in the gaming industry, metaverses, and DeFi projects.
Ways to Buy Cryptocurrency
A lot of time has passed since the creation of the very first cryptocurrency exchange, Mt. Gox, and the crypto sector has come a long way since then. Today, there are a variety of ways to buy cryptocurrency for beginners.
Centralized Exchange
Centralized exchanges (CEXs) are the most popular way of buying crypto for beginners. CEXs are run by an organization that controls all operations, and provides maintenance, development, and security, similar to a traditional stock exchange. Transactions on these exchanges are subject to third-party fees, which cover the costs of facilitating interactions between buyers and sellers. In addition, in most cases they support fiat, meaning you can buy cryptocurrency for traditional currencies.
Therefore, for those just getting acquainted with the crypto sector and learning how to buy cryptocurrency, centralized exchanges such as Switchere.com offer the most convenient entry point.
Decentralized Exchanges
Decentralized exchanges (DEXs) let you trade Bitcoin and other altcoins freely, without the limits and third-party involvement typical of centralized platforms. On such exchanges, your account functions as a wallet, allowing direct transfers to and from it.
There are currently about a hundred decentralized protocols, some still in development and others already in active use for trading. They all share one common feature: the funds always remain under the user's control, which eliminates the security issues often seen in centralized exchanges.
All-in-One Exchanges
Hybrid cryptocurrency exchanges (HEXs), or all-in-one crypto platforms, may soon replace CEXs and DEXs. Hybrid exchanges aim to achieve the perfect balance by combining the positive aspects of centralized exchanges — such as collaboration with large investors and trust from many users — with the advantages of decentralized exchanges, which include reliable storage and the absence of a central authority.
Crypto ATMs
Crypto ATMs, also known as Bitcoin ATMs, are essentially exchangers embedded in publicly accessible hardware devices and are another good way to buy crypto for beginners. With their help, you can buy and sell cryptocurrencies, though typically only the most popular ones like Bitcoin, Ethereum, XRP, Dash, Dogecoin, Tether, etc.
A crypto ATM resembles a regular ATM; it is also equipped with a screen, keyboard, and bill acceptor. You can find these machines in shopping centers and other public spaces in large cities.
Cryptocurrency Brokers
A cryptocurrency broker is an intermediary that helps make transactions with digital currency and charges a commission for its services. Trading on an exchange requires a lot of knowledge and skills that a beginner might not have. A brokerage company is ready to support a trader at all stages of trading, providing assistance in opening accounts, placing buy/sell orders, and finding suitable counterparties.
It's important to note that brokers set the prices at which assets are traded. These prices may be based on quotes from well-known exchanges, liquidity providers, and financial agencies. However, brokers may also use non-market quotes to trigger traders' stop-loss orders.
How to Buy Cryptocurrency As a Beginner
Newbies who have recently become aware of the cryptocurrency market amid its rise may have several questions: What is the best crypto to buy for beginners? How and where can I buy cryptocurrency? And is it really worth investing in? Below, you will find a simple, step-by-step guide on how to buy cryptocurrency for beginners.
Decide on a Cryptocurrency You'd Like to Invest In
We do not provide investment advice on when to buy and sell crypto for beginners, nor do we recommend that you follow the advice of people, even experts, who advocate investing in a particular currency. Always conduct your own research and consider all the risks.
Of course, Bitcoin remains the primary investment asset among cryptocurrencies. However, there are tens of thousands of other coins with their own advantages, disadvantages, and prospects.
Still, here are some factors to consider when choosing which crypto to buy for beginners:
- Project value
- White Paper
- Reputable team
- Open source code and its timely updates
- No unrealistic promises
Taking these factors into account in the early stages can help ensure that a coin has long-term prospects, is useful, and therefore has the potential to increase in price.
Choose a Cryptocurrency Exchange or Platform
When choosing an exchange for buying crypto for beginners, finding the optimal balance among all factors is crucial. Exchanges differ in their approach to security, user interface, and regulation. The key is to be as informed as possible, considering all options along with their pros and cons, and learning to think long-term. Ultimately, you can experiment with different exchanges by exchanging small amounts to determine which one you find the most comfortable.
Create an Account and Get Verified
Once you’ve selected an exchange, the next thing is to register an account and get verified. This process typically involves providing your email address, setting a password, and sometimes, verifying your identity through some documentation. Keep in mind that Know Your Customer (KYC) process is crucial for preventing fraud and meeting regulatory requirements.
Fund Your Account
After verification, you'll need to deposit funds into your account. Most exchanges support a variety of funding methods, including bank transfers, credit cards, and sometimes even PayPal. Choose the method that best suits your needs in terms of fees, speed, and convenience.
Place an Order to Buy Cryptocurrency
Once your funds are deposited, you can place an order to buy some crypto. You'll need to choose the trading pair and specify the amount of cryptocurrency you want to purchase.
Select a Storage Option
After purchasing cryptocurrency, you have to decide where to store it. You can keep it on the exchange or transfer it to a personal wallet. While exchanges are convenient for active trading, personal wallets offer greater security for long-term storage.
Transfer Your Cryptocurrency
If you choose to use a personal wallet, the final step is to transfer your cryptocurrency from the exchange to your wallet. Ensure you double-check the recipient's wallet address before confirming the transfer to avoid losing your funds. And you’re done!
How to Keep Your Cryptocurrency Secure
Now that we've explored how to purchase cryptocurrency, let’s move on to other important aspects. Whatever cryptocurrency you choose to invest in, you should secure a wallet in advance to store it — or more precisely, to store the combination of keys that confirm your right to own and transfer/receive these assets.
You can choose either a software or a hardware wallet. The former allows easy access to your currency at any time and enables active trading. Hardware wallets, on the other hand, are physical devices similar to USB drives. They are more secure than software wallets because they store keys offline, away from the Internet. They are ideal for storing assets that you don’t plan to use for a while.
- Examples of software wallets: Exodus, Edge, Metamask.
- Examples of hardware wallets: Ledger, Trezor, Safepal.
Pros and Cons of Investing in Crypto
Today, cryptocurrency is becoming increasingly popular as an investment instrument and there are many reasons for this.
- Potentially high returns: The crypto market's volatility is not only a risk but also an opportunity to earn significant returns. Therefore, cryptocurrency investments can be particularly appealing to investors interested in rapid portfolio growth.
- The deflationary nature of cryptocurrencies: Many cryptocurrencies have a limited supply of coins, which can potentially lead to an increase in their value over time due to this scarcity.
- Technological and innovative assets: Cryptocurrencies and blockchain bring innovation to financial technologies, offering new ways to conduct and manage transactions.
- Fast and confidential transactions: Cryptocurrencies enable transactions to be carried out almost instantly worldwide while providing a high level of privacy.
- Large selection of available assets for investment: There are many different cryptocurrencies and tokens, each offering unique features and capabilities.
Still, like any investment asset, crypto has its drawbacks. Among the most serious are:
- High risks: Investing in cryptocurrencies involves high volatility and uncertainty, which may result in significant financial losses.
- Difficulty of forecasting: The cryptocurrency market is extremely unpredictable, and even experienced analysts can be wrong in their forecasts.
- A large number of scammers in the industry: The cryptocurrency market attracts scammers who can take advantage of the technology's inherent complexity and anonymity to deceive investors. This, in turn, damages the industry’s reputation and slows its development.
Tips and Tricks on Buying Crypto for Beginners
To succeed in the crypto industry, you need to know not only how to buy cryptocurrency, but also how to plan effectively, persist in your efforts, and continually strive to gain new knowledge. Below are some important tips that will help you navigate the initial stages of investing in digital currencies.
Watch the Volatility
Investing in cryptocurrency can be both profitable and unprofitable, but there are ways to minimize the risks. Choose a clear strategy and stick to it, despite any price fluctuations. Remember that cryptocurrency is volatile by nature; it's unrealistic to expect the asset to only increase in value. It is generally believed that the optimal time to buy cryptocurrency for beginners is when it has remained at a stable, low level for some time. Therefore, it's unwise to ‘buy high’ since the price is likely to subsequently fall.
Invest Only What You Can Afford to Lose
Don't invest more than you can afford to lose. This is the number one rule not just for cryptocurrency traders, but for all investors. If you're struggling to pay your bills, then delay investing until you have some extra money — never take out loans or get into debt for these purposes.
Practice Proper Storage and Security Store
Make sure to choose a reliable wallet for storing funds. It is best to focus on services that are not primarily related to storage. The owner of the funds must be responsible for their safety — this is the essence of decentralization. Additionally, it is safer in terms of protection from hacker attacks. When choosing storage for cryptocurrencies, consider several options at once. It is better if the investments are distributed across multiple wallets rather than concentrated in one.
Use Two-Factor Authentication (2FA)
When working with an exchange, it is necessary to enable two-factor authentication (2FA) to secure your account. For example, you can set this up through the Google Authenticator app or via a text message to your phone. When using Google Authenticator, be sure to save the backup key. It is also advisable to use a complex password and a secure email address for registration, with 2FA enabled on the email as well.
Keep Your Private Keys Safe
Keep your twelve-word seed phrase safe. A seed phrase is the master key to your cryptocurrency wallet. Anyone who gains access to it can freely access your wallet and all the funds stored there. Therefore, make sure it is not written down in any visible place.
Also, handle private keys with care. A private key functions similarly to a seed phrase but provides access only to a specific type of asset. For instance, all Ethereum coins are controlled by a single Ethereum private key. Bitcoin and other cryptocurrencies use many private keys, each controlling one address. If one key is compromised, it could potentially put the others at risk as well. Therefore, store these keys in the safest possible place.
Other Ways to Invest in Cryptocurrenc
The crypto market offers many ways to invest in cryptocurrency beyond the standard crypto purchase. Although it's better for beginners not to dive straight into trading but to start by buying a small amount of cryptocurrency and holding it, let's consider other investment methods suitable for more experienced traders.
- Crypto ETFs: A cryptocurrency ETF is an exchange-traded fund whose price is tied to one or more digital assets. Crypto ETFs make it easier to access cryptocurrency investments for stock market investors, both institutional and retail. In January 2024, the Securities and Exchange Commission (SEC) approved several ETFs that invest directly in Bitcoin.
- Crypto futures: Crypto futures are a way to invest in cryptocurrency based on its predicted future price. Essentially, a futures contract is an agreement between two parties to sell or buy digital currency at a future date for a predetermined price. At the end of the contract, the asset is sold, thereby closing the contract.
- Crypto exchange or broker stocks: Buying individual stocks of companies within the crypto industry, such as crypto exchanges, bitcoin mining companies, and banks that provide solutions for crypto companies, is another way to invest in cryptocurrency. However, novice investors should be aware that this strategy carries risks — various market factors can cause the stock prices to drop significantly.
Join the Safest Way to Buy Cryptocurrencies at Switchere
If you're ready to start investing in crypto, Switchere.com comes as a perfect exchange choice that offers one of the safest and most convenient ways to buy cryptocurrency for beginners. With its robust security measures and straightforward purchasing process, Switchere.com makes it easy for beginners and seasoned investors alike to purchase crypto securely.
At Switchere, you can buy crypto with a credit card issued by Visa, Mastercard, and Maestro, as well as through direct bank transfers or Apple Pay. Additionally, Switchere has a full-featured mobile app available for both iOS and Android devices, allowing you to make crypto transactions and access your account from anywhere.
Final Thoughts
From all of the above, we can conclude that learning how to purchase cryptocurrency does not require you to be a professional or understand IT technologies. It is enough to act carefully and take into account the nuances of cryptocurrency transactions and storage.
However, it is safe to say that digital assets are an extremely risky investment. Therefore, before making your first investments, ensure you understand all the basics of crypto buying for beginners. We have outlined the main steps and aspects of investing in crypto. It is crucial to remember and apply two main rules: first, security comes first; and second, invest only what you can afford to lose.