It is predicted that approximately 57 million people will purchase cryptocurrency this year. Do you aim to be one of these people?
If so, it is important to make sure you do not dive in headfirst. You need to understand the different options that are available to you and determine how you are going to go about making your purchase.
With that being said, in this post, we are going to explore some of the easiest ways to purchase your first digital currency so you can get a better understanding.
Some things to consider before purchasing your first digital currency
Before we take a look at some of the different purchase options available, there are a few things to keep in mind, which will impact your ability to purchase cryptocurrency and the options available to you.
Firstly, your location matters. There are different rules and regulations in place around the world relating to cryptocurrency. Check your country’s regulations before you part with your hard-earned cash.
Next, you should never invest more than you can afford, as is the case with any type of investment. While cryptocurrency has proven to be very lucrative for a lot of people, it is also very volatile and prices are changing all of the time. There are no guarantees, so you should never use cash you cannot afford to lose for an investment like this.
You also need to make sure you check out the fees being charged by the website you purchase from. Some are cheap, others are not. There is nothing worse than taking all of the time to set-up an account and go through all of the checks only to find that the fees are extortionate. At the end of the day, you want value, and so fees definitely need to be taken into account.
You also need to have a plan before you start buying. What sort of cryptocurrency do you want to purchase? What are your goals and objectives? Not all cryptocurrencies value are going to be available for sale on every website or purchasing portal.
Plus, as we will discuss a bit later, some platforms only enable you to buy cryptocurrency using cryptocurrency, which is no good for those looking to make their first purchase. This is why you need to have a plan of action, understand the cryptocurrency you want to invest in, and make sure the platform you are considering offers this.
Finally, various payment methods are available too, including bank transfer, credit card, debit card, e-wallets, and even cash, so consider this when making your decision.
What are the different ways you can buy your first digital currency?
There are a number of different approaches you can use to purchase your first digital currency. Let’s take a look at them in more detail:
Use Apple Pay
One option available to you is to use Apple Pay. A lot of people use Apple Pay because it is convenient. If you have Apple smartphone or device, you can easily store your payment information, making any purchase as easy as making just one click. Companies like Moonpay are established to facilitate purchasing via your Apple Pay device.
However, there are a lot of other reasons why you may want to buy BTC with Apple Pay, or purchase any other cryptocurrency. For example, security is a real plus point here. As you do not need a physical credit or debit card, the chances of fraud and someone stealing your information are reduced considerably.
In fact, you won’t even need to use your card number to make a crypto purchase. Instead, a token called a “device account number” is used to complete the transaction. This is beneficial because it considerably lowers the chances of there being a security breach or information theft.
Buy via a cryptocurrency exchange
A cryptocurrency exchange is a platform where sellers and purchasers can meet to trade digital currencies. Exchanges tend to have quite low fees, yet they usually have more complicated interfaces. There are a number of different types of trades, as well as advanced performance charts. If you are a new cryptocurrency investor, this may be a bit too much to handle.
However, if you are tech-savvy and you have invested in other areas before, you may find the best cryptocurrency exchanges straightforward. It all depends on your level of experience when figuring out whether or not to go down this route.
Some of the well-known cryptocurrency exchanges include Binance.US, Gemini, and Coinbase.
Plus, while the trading interfaces may be a bit overwhelming for a novice, there are some user-friendly purchasing options. You do not have to dive right into the complicated part of the system.
Convenience does come at a cost, though, which will be a bit disappointing to learn. You will be charge quite a bit more in fees if you use one of the beginner-friendly options in comparison to if you were to purchase the same amount of crypto using the standing trading interface.
Because of this, you may think it is worth spending a little bit of time learning about the platform, rather than spending more money for the same amount of cryptocurrency.
One thign that beginners do need to keep in mind is that some exchanges will only enable you to purchase crypto utilizing other crypto, which would mean you would need to locate another exchange to purchase the tokens from first before your preferred exchange accepts you to trade. This is obviously no good if you are looking to buy your first digital currency.
So, make sure you select an exchange that enables fiat currency purchases and transfers made with U.S. dollars.
Purchase via PayPal
If you are a regular PayPal user, you may have already noticed that it is possible to purchase cryptocurrency on this platform. Via your home page, there should be a cryptocurrency section next to your wallet. You can easily purchase Bitcoin or Ether, and you can do so for as little as $1.
Unlike a lot of the other options, you won’t need to go through the account opening process if you already use PayPal, which 426 million people do. Plus, as an account user, you will already be familiar with the layout, dashboard, and the way PayPal works, meaning you will find it intuitive to use.
There are a number of drawbacks associated with this approach though, and you do need to look at both sides when making your decision. For example, there is a limited number of exchanges that offer this option when trading cryptocurrency.
Furthermore, there are still stringent limitations regarding how much crypto can be purchased and there are some fees that you will need to account for. However, if it is convenience that you really care about, you will struggle to find better than PayPal.
Purchase using a cryptocurrency broker
Another option is to use a cryptocurrency broker. A brokerage is designed to remove the complexity from buying crypto, providing you with a simple interface that interacts with the exchange on your behalf.
However, do note that this simplicity usually comes at a trade-off in terms of higher prices.
There are also some brokerages that will claim to be free. If this is the case, ask yourself how they actually make money? It could be that they are selling data about what you and other traders are purchasing and selling to large funds or brokerages. It may also be that they are not executing your trade at the optimal market price.
While this is not always the case, find out why an exchange is free before agreeing to use it.
Two of the most well-known crypto brokers out ther at the moment include SoFi and Robinhood.
While brokers are highly convenient, you do need to be careful when it comes to moving your digital currency off the platform. Some brokers have put restrictions in place. For example, if you use Robinhood or SoFi, you are not allowed to transfer your crypto holdings out of your account.
This may not seem like much of an issue, however, when you become more experienced and advanced, you may want to move your digital currency into a crypto wallet for greater security. Nevertheless, your broker may not allow you to do this.
Final words on how to purchase your first digital currency
So there you have it: an insight into some of the different options that are available to you when it comes to purchasing your first digital currency.
There is no right or wrong option. However, it is important to assess every solution carefully, aligning one that is the most convenient for you while also taking matters like security and fees into account as well.