Digital assets are becoming the new normal — 4 steps to buy cryptocurrency

Cryptocurrencies are virtual property that exchange on a 24/7 global market. If you are considering adding cryptocurrencies like bitcoin, ether, or dogecoin in your investment portfolio, you have got several alternatives for doing so. 

"Cryptocurrency is a unit of measure. It is a digital token that can be transferred from one birthday party to every other, however no longer duplicated," explains Charles Allen, chief govt officer of BTCS, Inc. 

Unlike physical fiat currencies (e.G., america Dollar), cryptocurrencies are decentralized, virtual currencies which can be usually used to buy goods or services. These belongings make use of blockchain era to make certain that transactions among every celebration are steady.

"If I personal a bitcoin, I do not genuinely own whatever bodily," Allen says. "I simply personal a key that permits me to move a report or a unit of measure from one character to some other, without a trusted 1/3 celebration. And this is virtually all of the cryptocurrency is. So if I very own two bitcoins, I can flow it from myself to someone else without a trusted third birthday celebration in the middle. And that transaction might be verified with the aid of this decentralized network of computers from nodes and minors."

1. Choose a broker or cryptocurrency exchange 

If you're interested in buying and selling cryptocurrency, the first step is choosing a platform to do so. Generally, you can choose from a traditional broker or dedicated cryptocurrency exchange.

Traditional brokers: There are a few online brokers that offer ways to buy and sell cryptocurrency, in addition to other assets like stocks, bonds, and ETFs. These platforms tend to offer lower trading costs but fewer crypto features.

Cryptocurrency exchanges: You'll have many cryptocurrency exchanges to choose from, each with varying offerings of cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.

Cryptocurrency exchanges

A crypto exchange is a platform dedicated to facilitating the trading of cryptocurrency. Each exchange has their own rules when it comes to the buying, selling, and trading of cryptocurrency. 

The best exchange for you depends on your needs, but beginners should look for exchanges that offer simple web and mobile interfaces, educational resources, and readily available customer support.

Depending on the crypto exchange, you can trade one cryptocurrency for another, or exchange fiat money (like the US Dollar) for cryptocurrency or vice versa. Prices are based on daily market rates. 

Brokerages

Traditional online brokerages that offer cryptocurrencies are few, but more options are becoming available for crypto-oriented traders. 

Online brokerages usually don't offer as many cryptocurrencies as crypto exchanges (nor do they provide interest-earning account perks like staking). If you're looking for a wider range of assets and account options, crypto exchanges might be a more beneficial option to consider.

Other ways to invest in crypto

You'll also have multiple other options to choose from when it comes to buying crypto. In the past year, payment services like PayPal, 

Cash App

, and Venmo all expanded their accepted payment options, allowing you to buy, sell, or hold cryptocurrencies like bitcoin.

2. Fund your account

After you've chosen a crypto exchange or online broker, you'll need to fund your account to begin trading. "Although it differs by platform, most crypto exchanges allow users to purchase crypto using fiat currencies such as the US Dollar or the Euro using their debit or credit cards," says Marie Tatibouet, chief marketing officer at Gate.io.

Another thing to look out for is fees. You may run into deposit/withdrawal transaction fees in addition to trading fees. And the fees you pay for funding or withdrawing from your account typically depend on your payment method.

For instance, Coinbase charges a 3.99% fee for debit card transactions, and it charges $10 for wire transfers. ACH transfers, however, are free. 

These fees vary per exchange, so you'll want to pay close attention to each platform's prices before you get started.

3. Place an order

You can usually place an order with the click of a button on your broker's or exchange's web or mobile platform. If you're planning to buy cryptocurrencies, you can do so by selecting "buy," choosing the order type, entering the amount of cryptocurrencies you'd like to purchase, and confirming the order. The same process applies to "sell" orders.

4. Select a storage method for your assets

After you've purchased your cryptocurrency, you'll need to store it in a safe place to protect it from hacks or theft.

This is where cryptocurrency wallets come in. A crypto wallet is a physical device or online software used to securely store the private keys to your cryptocurrencies. Some exchanges offer built-in wallet services, making it easy for you to store directly though the platform. But all exchanges or brokers don't automatically provide wallet services for you.

Is crypto a good investment?

cryptocurrencies have many advantages. For one, you can buy them 24/7, so you won't be limited to trading during set hours like regular stock exchanges that open from 9:30 a.m. to 4 p.m. ET. Prices also regularly fluctuate by large percentages, opening the door for big returns if that price swing falls in your favor.

But this 

volatility

 is also what makes cryptocurrencies a speculative investment. In fact, even more passive crypto tactics like staking aren't completely immune to loss, nor are virtual assets absolutely invulnerable to cybersecurity threats.