Cryptocurrencies are the talk of the town right now. And with the hype surrounding them, it's natural to want to buy some of your own. In this guide, you will learn how to buy digital currency like Bitcoin, Litecoin, and Ethereum—both directly from an exchange and through a broker.
Directly from an exchange
If you want to buy a cryptocurrency directly from an exchange, you can do so by signing up for one. This is the easiest and fastest way to get your hands on cryptocurrencies. The downside is that it's also the least secure way to purchase them because there are no guarantees about how well-regulated or secure any given exchange might be.
You must find a reputable exchange. There's no shortage of illegitimate exchanges online right now—but there are also many legitimate ones too! The best way to find out which ones are legitimate is through word-of-mouth and reviews online. If there aren't any reviews available yet or anyone in your network hasn't tried using one particular site yet, then don't worry too much about it just yet, either! Just make sure whichever site you choose has been around for at least two years and has good ratings/reviews before proceeding further down this path.
Using a credit card
If you want to buy a small amount of cryptocurrency, or if you're just getting started with trading as an investment vehicle, a credit card purchase is fine. Just be aware that there are fees for buying and selling cryptocurrencies. You'll also need to set up an account with an exchange before making your first purchase.
If you have the time and resources for a more involved process—and especially if you're planning on investing in larger amounts of cryptocurrency—you may want to consider purchasing from an exchange directly rather than going through an intermediary.
Using a bank account
This is the simplest way to buy cryptocurrencies, but it can be slow and expensive. As per the experts at SoFi, “You'll need to verify your identity by submitting copies of your ID, proof of address and a photo of yourself holding up a sheet of paper with your bitcoin wallet address on it.” Once you've done that, you'll need to wait for three days while the exchange verifies your account before you can actually use it.
The verification process is necessary because some exchanges require users to go through this process before depositing money or buying cryptocurrency on their platform. There's no fee associated with verifying your account, but there will usually be minimum balances required before depositing any funds into an account or purchasing cryptocurrency from an exchange.
From an individual or broker
Buying cryptocurrency from individual sellers or brokers is a good option for those who want to buy large amounts of cryptocurrency. Brokers tend to be more expensive than exchanges, but they can also offer better deals on specific cryptocurrencies. Some brokers charge fees for buying or selling cryptocurrency, so buyers should check the reputation of their broker before using them.
As you'll have seen, there are many different ways to buy cryptocurrencies. You can purchase them with fiat currency or exchange them directly with another cryptocurrency. You can even use a credit card in some cases!
