Cryptocurrency is the future, and that is becoming obvious by the day. Many people now buy into the idea behind cryptocurrency, which has greatly increased its popularity and adoption over the last few years. If you are also thinking of joining the wagon and investing in cryptocurrency, it is good you know forehand that cryptocurrency is also a delicate terrain to tread.
If you are buying your first crypto, you want to make sure you do that safely – in a safe environment. In this post, we will be showing you some steps you need to follow to buy your first cryptocurrency safely and in a safe environment. This is not applicable to only some crypto; you should follow the steps regardless of the type of cryptocurrency you are buying.
Cryptocurrency Comes with a Lot of Risks
Let’s take Bitcoin, for example – at least it is the first crypto and the most popular as of the time of this writing. Bitcoin is a decentralized cryptocurrency that offers a whole of benefits over the traditional fiat currencies, including security and privacy. The crypto is backed by a strong, solid technology known as blockchain technology. Apart from Bitcoin, there are now a lot of cryptocurrencies in the market.
However, before you buy any type of cryptocurrency, you should know that they are extremely volatile. Their prices fluctuate a lot and are very unpredictable. There may be a quick rise in price today, and in just 24 hours after, the price can steeply fall back to the ground.
At the same time, getting careless with your crypto investment can make you lose them completely. Whether you are buying your crypto from a crypto broker or exchange, you should make sure safety is at the top of your list. You want to ensure you buy your crypto safely without any issues. So, let’s see some easy steps you can follow to ensure safety purchase of any crypto of your choice.
Tips for Buying Cryptocurrencies Safely
#1: Do your research
Reduce the number of risks you face by first understanding the crypto you are actually investing in. Know that crypto is volatile and have a good investment strategy regarding the type of crypto you are buying. There are many cryptos out there to choose from. Check the one that best fits your portfolio and strategy. Then go for it.
#2: Choose your exchange or broker wisely
There are several ways to buy cryptocurrency but using crypto exchanges and brokers is the most common among them all. When you are thinking of buying cryptocurrency, you should first conduct thorough research on the exchange or broker you want to use. Each exchange platform has its own unique pros and cons. So weigh these factors and use that to figure out which platform is best for you.
While some provide utmost security, some offer low transaction costs, and some are best at customer support. So check all of these and choose one that is best for you.
#3: Choose a reliable wallet
Unlike your traditional currencies, you don’t hold or store cryptocurrencies in banks. Instead, you need a crypto wallet to safely store your cryptocurrency after buying it. While some exchanges will offer that you store your cryptos on their platform, that is not recommended because exchange platforms are susceptible to hacking. And when that happens, you will be losing all the cryptocurrencies you have on their platform. So getting your own secure crypto wallet to store your cryptos is the best option.
There are different types of crypto wallets, but they are categorized into two; hot wallets and cold wallets. Hot wallets tend to be easier to use and need to be connected to the internet before you can use them. Most hot wallets are also free. On the other hand, cold wallets are physical devices that don’t need an internet connection before you can use them. Because they don’t require internet connectivity, they tend to be more secure than hot wallets. However, they are not free like hot wallets.
#4: Deposit funds
Once you have found a reliable crypto exchange or broker you can use for the purchase and also have your wallet handy, the next thing is to deposit some fiat currencies like Euro or U.S. dollars into your account. Different exchanges have different payment methods. But common payment methods include bank transfer, debit or credit cards, PayPal, etc.
However, before you use your credit card for making payments for crypto purchases, you should know that this method incurs more fees than when you use bank transfer or debit cards.
#5: Buy your cryptocurrency
Now that all is set and you also have some funds deposited into your account on the exchange you want to use, you can now go ahead to buy your crypto. Just log into your account on the platform and specify how much crypto you want to buy. You will be required to provide your wallet’s public address where the crypto would be sent, and you will get the cryptocurrency in your wallet once the transaction is complete.
But be careful with crypto investment. It is not advisable to use money meant for an emergency to invest in cryptocurrency, and you shouldn’t use all your money either. It is better to invest with your spare money and have a strong strategy in place so you don’t lose the money.
Buying cryptocurrency can be risky, so you need to tick every safety box to make sure you don’t lose your money. If you follow the steps highlighted above, you will be cutting down the risks and increasing your chance of having your investment protected.