How to buy cryptocurrency?
More and more people are buying cryptocurrencies as it is slowly integrating into the financial infrastructure. If you are considering purchasing cryptocurrencies, you must choose the right platform.
Exchange platforms are the most popular choice to buy cryptocurrencies. Other options include brokers, ATM, and peer-to-peer platforms.
This article is a detailed guide as to where and how to buy cryptocurrency.
Before you consider buying cryptocurrency, it’s essential to analyse various options. This should enable you to choose the best platform for your purchase.
Cryptocurrency exchanges
Cryptocurrency exchanges are online websites where you can buy crypto coins against your local currencies. Cryptocurrency exchanges are the most popular platforms for buying cryptocurrencies as they are automated and easy to use. Think of them as the ‘Amazon’ of cryptocurrencies. The Amazon-analogy is suitable for exchanges, as sellers and buyers do not directly communicate with each other.
To buy cryptocurrency on an exchange platform, set up your exchange account, choose your crypto coin, deposit the money and you are good to go. After buying cryptocurrency it is advised to store them in a wallet rather than the exchange platform itself.
Cryptocurrency brokerage
Cryptocurrency brokerage platforms are often termed as 'Over-the-Counter Market (OTC)'. As the name suggests brokerage platforms work as an intermediary between the seller and the buyer. Unlike exchanges where you have to navigate the best deal yourself, brokerage platforms match the buyers and sellers for a sale. This process is much quicker and convenient as you don't have to scroll through different deals.
Some popular cryptocurrency brokerage platforms include Coinbase, Kraken, CoinCorner, etc.
Peer-to-Peer (P2P) platforms
If you want to keep malicious eyes away from your crypto transactions, P2P platforms are for you. P2P platforms involve direct contact between buyers and sellers. Sellers list their asking price and buyers (like you) have to choose a bid that they are comfortable with.
P2P platforms are more secure than other buying options. Some P2P platforms like LocalBitcoins also offer escrow services to prevent fraud.
Bitcoin ATMs
If cryptocurrency isn't physical currency, how can you withdraw crypto coins from ATMs?
You can buy cryptocurrencies from Bitcoin ATMs. You have to enter your wallet address and feed the ATM with your local currency. Your crypto funds will be transferred to the specified wallet address within 30 minutes.
The downside of Bitcoin ATMs is they are less in number, approximately 9,600 Bitcoin ATMs across the globe. You may find it difficult to locate them in your vicinity. The transactions fees are also high ranging from 7-12%.
Also, not all Bitcoin ATMs support all cryptocurrencies. Bitcoin, Ethereum, and Bitcoin Cash are commonly supported.
How to buy cryptocurrency?
Before you buy cryptocurrencies from the above-mentioned platforms you must consider the following factors:
Geographic location
Due to certain rules and regulations, exchange platforms do not operate globally. You have to confirm the availability of exchange platforms in your region. For instance, Coinbase operates in the U.S and some European nations. CoinCorner is available in Australia whereas Coinberry operates in Canada.
Transaction fees
The transaction fees vary depending on the platform. Exchange platforms charge 1-4% and Bitcoin ATMs charge 7-12%. The transaction fees of brokerage platforms differ from platform to platform.
Available cryptocurrencies
All cryptocurrencies aren't listed on every platform. Before you consider buying crypto coins, check their availability with different platforms.
Payment options
Various platforms have different modes of payment. Payment options include bank transfers, PayPal, Western Union, Moneygram, etc.
Deposit limits
Exchange platforms or other buying options set maximum and minimum deposit or purchase limits. This depends on factors like purchase history, payment method, account verification, and much more. Be aware of the purchasing limit before you make a purchase.
Summary
You can purchase cryptocurrency from exchanges, brokerage websites, P2P platforms, and Bitcoin ATMs. While placing your purchase consider factors like location, transaction fees, available crypto coins, payment options, and deposit limits.