The prospect of buying cryptocurrencies, especially for a first-time buyer, can be a tad overwhelming, to say the least. Experienced heads have seen the cryptocurrency market blossom over the years since Bitcoin launched. However, individuals wishing to purchase Bitcoin or any other altcoin during the early days of crypto had very limited options. Today, the scenario is different, with buyers having several options, such as centralized crypto exchanges, decentralized crypto exchanges, and cryptocurrency brokers. You can also gain indirect exposure to cryptocurrencies by investing in crypto funds and companies that focus on crypto.
In fact, for a newcomer in the crypto space, the sheer number of options could be overwhelming. This article looks to simplify that dilemma and looks at the most convenient way to make your foray into crypto.
Key Points
- Cryptocurrencies are a type of digital money secured via blockchain technology.
- Investing in cryptocurrencies can be done in several ways, such as investing in crypto companies and crypto ETFs (Exchange Traded Funds) or buying it directly through crypto exchanges.
- Centralized exchanges are often considered the simplest method of purchasing cryptocurrencies.
- Remember, investing in cryptocurrencies is risky, so it is essential to thoroughly research or seek financial advice before buying/investing in crypto.
Different Ways Through Which You Can Purchase Crypto
Now, there are several ways to get your hands on some crypto, ranging from relatively straightforward to quite complex. You can purchase cryptocurrencies through centralized and decentralized cryptocurrency exchanges or brokers, or if you don’t want direct exposure to cryptocurrencies by investing in crypto-focused companies and funds. Let’s look at each in a little more detail.
Centralized Exchanges
The most straightforward way of purchasing cryptocurrencies is through centralized exchanges (CEX). A centralized cryptocurrency exchange functions similarly to a stock exchange, bringing an air of familiarity to the entire process. These platforms act as an intermediary between buyers and sellers, allowing them to trade different cryptocurrencies, and are often considered the gateway to the crypto ecosystem. Centralized exchanges require users to furnish a considerable amount of information and documentation before trading to comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations. CoinSmart is an example of a centralized exchange.
Decentralized Exchanges
There are decentralized exchanges for those who do not wish to go down the centralized route. Decentralized exchanges allow users to transact directly with one another and cut out intermediaries. This means users maintain complete custody of their assets instead of handing over the management of the funds to an intermediary. Examples of decentralized exchanges include platforms such as PancakeSwap, Uniswap, dYdX, and others. However, decentralized exchanges are plagued with issues related to low liquidity, smart contract vulnerabilities, slow speeds, and limited functionalities.
Cryptocurrency Brokers
The third option you have is buying cryptocurrencies through crypto brokers such as Robinhood. These platforms fulfill a role similar to that of stockbrokers, acting as intermediaries and allowing buyers to place an order to purchase cryptocurrencies through the broker. While cryptocurrency brokers are convenient, they may place some restrictions on moving your assets off the platform.
Alternative Methods To Purchase Cryptocurrency
There are ways through which you can gain indirect exposure to cryptocurrencies as well, such as investing in companies connected to the crypto space or investing in a crypto exchange-traded fund (ETF)
Investing In A Crypto-Related Company
You can invest in companies that use or own crypto in reserve through an online brokerage that allows you to purchase shares of these companies. For example, CoinSmart is a publicly-traded company, and you invest in it by purchasing the SMRT stock.
Crypto ETFs
Crypto Exchange Traded Funds allow you to invest in many cryptocurrencies in one fell swoop. This means immediate diversification and less risk than investing in individual crypto assets.
Factors To Consider Before Buying Cryptocurrencies
Out of all the options discussed above, centralized exchanges offer the most convenient route. However, there are several factors that you must consider before choosing an exchange.
- Jurisdiction – Ensure that the exchange is available in your region.
- Ease-of-Use – Some cryptocurrency exchanges can have quite an intimidating user interface for newer users. If you are a beginner, it is crucial to choose a beginner-friendly platform. However, some advanced users may need a more sophisticated platform.
- Liquidity – It is important to choose an exchange that does not have any issues related to liquidity.
- Security – Centralized exchanges are a frequent target of hackers and other malicious entities. This is why choosing a platform that offers robust security and holds most of its assets offline is imperative.
- Transparency – Transparency is also another critical aspect to consider. Always ensure that the platform is transparent about its finances.
- Regulation – Always choose a platform that complies with all the necessary KYC and AML regulations.
One platform that offers its users all of the above factors is CoinSmart. CoinSmart is publicly listed and comes with a simple, easy-to-navigate user interface with tools for both new and experienced investors.
How To Buy Cryptocurrency On CoinSmart
Let’s look at the steps needed to buy cryptocurrency on CoinSmart via a step-by-step walkthrough.
- First things first, go on the CoinSmart website. Log into your CoinSmart account. If you have not created an account, simply click “Sign Up For An Account.”
- You will now be redirected to the “Sign Up” page. Enter your email address and create your password. Remember to create a strong password. Once you have entered all the necessary details, click “Sign Up.”
- Once your account is created, you will be prompted to verify your email. Go to your inbox, open the mail sent by CoinSmart, and click on “Activate Your Account.”
- Following this step, we highly recommend setting up 2FA for added security.
- Once you set up your 2FA, verify your phone number, and upload a government-issued ID card such as a passport or driver’s license.
- Once you have completed these steps, CoinSmart will verify the documents. Once verified, you can begin trading.
- Log in to your newly created account. Once you have logged in, you will be redirected to your dashboard, where you can view everything related to your accounts, such as your portfolio value, a list of available cryptocurrencies, a ten-day chart, and the market value of the asset.
- Now, before purchasing your crypto, you have to fund your account. To add funds to your account, click on “Add More Funds.” Choose whichever option is most convenient for you and fund your account.
- Once you have funded your account, you can purchase your crypto.
CoinSmart gives you two options through which you can purchase crypto.
Fiat Currency – CoinSmart users can purchase cryptocurrency directly using fiat currency. Choose the currency you wish to use, then choose the cryptocurrency you wish to purchase and complete the transaction.
Direct Swaps – Users on CoinSmart can also directly swap one cryptocurrency for another through the platform’s SmartTrade feature. For example, if you have BTC, you can swap it for any available cryptocurrencies on the platform.
In Closing
Investing in cryptocurrencies comes with risks, thanks to their inherent volatility. However, despite the recent upheaval in the crypto space, interest in purchasing crypto remains. While traders have understandably become wary of centralized platforms, the alternatives, such as decentralized exchanges and crypto brokers, have their fair share of shortcomings.
Centralized platforms are still the most accessible avenue into the crypto ecosystem as long as you select a trusted platform. CoinSmart, as a publicly traded platform, is compliant with all regulatory requirements and ensures complete transparency of all operations.
Disclaimer: The content of this email is strictly for information purposes only. All of the opinions expressed in this email are not connected to CoinSmart and are not intended to provide you with investment advice. It is important that you do your personal research and/or consult an investment advisor to determine what is right for you.
