Cryptocurrencies made headlines as they spiked in value towards the end of 2017. The entire cryptocurrency market capitalization reached an all-time high value of more than $800 billion, sending them right into the mainstream. Below is a comprehensive guide on how to buy cryptocurrency using the most popular means for it.
Reasons to Buy Cryptocurrency
Everyone has their own reasons for investing, but it’s almost always the case that they want to make a return.
Investing in Bitcoin and other cryptocurrencies has become popular partly because of their high volatility. 2017, for example, saw Bitcoin spike from about $1,000 at the beginning of the year to more than $20,000 at the end.
At the time of writing this, Bitcoin is trading at around $3,665 - 80 percent less than its all-time high value a year ago.
This goes to show that the asset class carries serious risks, but it also makes way for unprecedented returns.
In any case, below are a few of the common reasons for which people buy cryptocurrency.
As cryptocurrencies gain popularity, different industry players have begun offering a wide range of services geared towards providing a quick and easy way into the market.
As a result, you can currently buy bitcoin, ripple (XRP), ether (ETH), and almost all of the other popular cryptocurrencies using your debit card, credit card, gift cards, PayPal, Skrill, and so forth.
You can even buy Bitcoin from special ATMs.
In other words - the barrier to entry has been lowered notably.
It’s Getting More Popular
The cryptocurrency market, as a whole, is here to stay. While it’s still in a very nascent stage, the merit behind cryptocurrencies has been recognized and they are beginning to gain traction.
In fact, popular US economist Paul Krugman compared Bitcoin to Gold, admitting that the former “has more utility” than the latter.
The abovementioned Bitcoin ATMs have now grown to be more than 4,000 throughout the whole world, which does speak for increased demand.
A lot of different institutions, countries, governments, and even banks have attested to their interest in Bitcoin as well as blockchain technology.
It Makes Sense
If anything, investing in cryptocurrencies diversifies your portfolio.
As any experienced investor will tell you, diversification is key because you don’t want to keep all of your eggs in the same basket.
Buying cryptocurrency is a way to balance your investment portfolio. At the same time, the high volatility of the asset class, which is one of its key characteristics, is also something that may increase the potential for increasing your return.
Of course, the risks are also substantially higher.
How to Buy Cryptocurrency on Binance
If you want to begin trading cryptocurrency on Binance, you would first have to register an account. The process is fairly straightforward.
Once this is done, you’d have to deposit the cryptocurrency you want to trade with. Don’t worry about selection - Binance has a broad portfolio of supported digital assets.
Keep in mind, though, that Binance is a predominantly crypto-to-crypto exchange and it doesn’t support fiat-to-crypto trades in all regions. There are just a couple of regions where this is possible.
Hence, if you want to trade on Binance you would have to deposit cryptocurrency directly and then start exchanging.
Trading is rather easy. You have to choose the cryptocurrency that you want to trade with and take a look at the available trading pairs.
For example, if you want to buy Bitcoin, you can do so using Ethereum, Litecoin, and other cryptocurrencies. You’ll get real-time platform exchange rates and your trade will be executed as soon as your target price is reached.
How to Buy Cryptocurrency on Coinbase
Coinbase is another popular cryptocurrency exchange and it’s currently the largest one based in the US. It has its headquarters located in San Francisco.
To buy cryptocurrency on Coinbase, you have to sign up for an account. Once again, there’s nothing challenging about that.
By doing so, you will have a place to store your cryptocurrency and a very convenient payment method to convert your cryptocurrency into USD or EUR and vice versa. You can deposit through a credit card, debit card, and other convenient payment methods.
As soon as you’re done with setting up your account, you’d have to connect a bank account or a debit or credit card. There are a few verification steps which are fairly straightforward and can be completed within the same day. Coinbase support is relatively quick in verifying your information.
Once you’ve connected your card or bank account, you can begin buying cryptocurrencies. Coinbase has a limited amount of options when it comes to it and it currently supports Bitcoin, Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), and ZRX.
How to Buy Cryptocurrency on Bitfinex
Bitfinex is also one of the major cryptocurrency exchanges and it offers a wide range of digital assets that you can trade with.
One of the core differences with Binance, however, is that you can engage in fiat-to-crypto trading on the platform. This is pretty convenient.
Setting up an account is relatively easy and the verification process also goes through rather quickly.
The process is absolutely the same as in Binance - you’d have to select the trading pair of your preference, determine price targets and execute trades.
How to Buy Cryptocurrency with Cash
Buying cryptocurrency with cash is something that has its ups and downs compared them buying it with a bank transfer or on a cryptocurrency exchange.
For starters, cash purchases are faster. They are usually peer-to-peer and you will receive your cryptocurrency as soon as the seller has received his cash. There is no need for you to set up a third-party account and go through any tedious verification processes.
Additionally, cash purchases are private. You won’t necessarily have to reveal any kind of personal information.
There are a few different ways you can go about buying cryptocurrency with cash. For once, you can send the money through a bank transfer which takes up to about 3 business days. Keep in mind, though, that there are charges that apply.
Buy Cryptocurrency in Person
A direct peer-to-peer purchase is something you should only do with a trusted party. Perhaps you have someone close to you who has cryptocurrency or wants to buy them from you.
The process is fairly simple - you give them the money as they transfer the cryptocurrency.
At the same time, it’s important to note that there are a lot of meetups that take place regularly as cryptocurrencies are becoming more and more popular. There are also plenty of conferences that you can attend and meet people that you can trade with in the future.
Buy Cryptocurrency via an ATM
Bitcoin ATMs are growing in popularity. As we mentioned above, there are more than 4,000 of them spread throughout the world.
The buying process is usually rather easy - you would have to put in some money and provide a QR code for the ATM to scan. After that, it would send the amount of cryptocurrency automatically to your wallet.
Starting from January 2019, people in France can even buy Bitcoin in tobacco shops, Reuters reports.
How to Buy Cryptocurrency with PayPal
PayPal is perhaps the most popular online payment processor. There are a few different ways that you can buy cryptocurrency with PayPal.
You would first have to find a platform that supports PayPal, to begin with. One of these you can use is LocalBitcoins. This is a peer-to-peer trading platform which connects buyers with sellers. It’s essentially the same thing as if you are using cash.
How to Buy Cryptocurrency with Skrill
Skrill is another very well-known international online payment processor.
It is supported by a few different platforms which would allow you to deposit cash and buy cryptocurrency.
Again, LocalBitcoins supports Skrill. Another platform you can go through is BitPanda or VirWox. Both of these are cryptocurrency exchanges.
As you can see, there are plenty of different ways you can buy cryptocurrency. As they begin to grow in popularity, it’s likely that it will become even more accessible and more companies will enable it.
The above is not an extensive list and there are other platforms, exchanges, and, in general - means of buying cryptocurrency.
However, these are one of the most commonly known and easiest ways to do it.
Images courtesy of PayPal, Skrill, Binance, Bitfinex, Coinbase, Pixabay.
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