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7 Ways to Buy Cryptocurrency for Beginners

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Cryptocurrency has become a popular investment choice in recent years, and for good reason. The market has seen tremendous growth, and there are now a variety of ways to buy cryptocurrency. If you’re a beginner, it can be overwhelming trying to figure out where to start. This guide will outline five ways to buy cryptocurrency, so you can find the method that best suits your needs.

Why to Buy Cryptocurrency Now Today

There are many reasons why you might consider buying cryptocurrency. Here are just a few:

  • High potential returns: Cryptocurrency has the potential to generate high returns, as the market is still relatively new and volatile. For example, Bitcoin’s price rose over 10 times in 2017. Though past performance does not guarantee future results, the potential for high returns continues to attract new investors.
  • Diversification: Cryptocurrency can be a good way to diversify your portfolio. Because cryptocurrencies like Bitcoin operate independently of banks and governments, they can provide a non-correlated asset to help spread out risk. Adding a small portion of crypto to a portfolio of stocks and bonds can potentially boost returns and reduce overall volatility.
  • Hedge against inflation: Some believe that cryptocurrency can be a hedge against inflation, especially in countries with high inflation rates or weakening currencies. For example, residents in countries like Venezuela and Zimbabwe have turned to Bitcoin to preserve their purchasing power as their national currencies became devalued.
  • Access to new technologies: Cryptocurrency is often associated with new and innovative technologies, such as blockchain. Investing in crypto assets provides exposure to these cutting-edge developments that could disrupt existing industries. These new technologies also have the potential to increase the overall value of the cryptocurrency ecosystem.
  • Ease of use: It is now easier than ever to buy and sell cryptocurrency thanks to user-friendly exchanges and payment platforms. New investors can get started with just a few clicks and a small initial investment. The barriers to entry are much lower compared to investing in stocks or bonds.
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Where to Buy Cryptocurrency

There are a variety of places where you can buy cryptocurrency. Here are a few of the most popular options:

1. Traditional Trading Platforms

Traditional trading platforms, such as ETRADE and Robinhood, are a good option for beginners who are already familiar with using these platforms. These platforms offer a user-friendly interface and a variety of features, such as charting and technical analysis tools. However, it is important to note that traditional trading platforms typically charge fees for cryptocurrency trading.

Pros

  • Easy to use interface
  • Charting and analysis tools
  • Can link bank account
  • Purchase crypto alongside other assets

Cons

  • Higher trading fees than crypto exchanges
  • Fewer currency options compared to crypto exchanges
  • Do not control private keys

2, P2P Exchanges

buy-crypto-cash-deposit-bybit

P2P (peer-to-peer) exchanges allow you to buy cryptocurrency directly from other people. This can be a good option if you are looking for a more personal experience. However, it is important to note that P2P exchanges can be more risky than traditional exchanges, as you are dealing directly with other individuals.

Pros

  • More direct interactions
  • May find better rates than exchanges
  • Some ways to trade anonymously

Cons

  • Less protections or insurance compared to exchanges
  • Higher fraud risk when dealing with individuals
  • Smaller selection of payment methods

3. Crypto Exchanges

buy-cryptocurrency-traditional-trading-platforms-bybit

Crypto exchanges are specialized platforms that allow you to buy and sell cryptocurrency. These exchanges offer a variety of features, such as margin trading and staking. However, it is important to note that crypto exchanges can be more complex to use than traditional exchanges.

Pros

  • Access to a wide variety of cryptocurrencies
  • Advanced trading features like margin trading
  • Can withdrawal crypto to personal wallet

Cons

  • Complex interface compared to traditional platforms
  • Higher risk of hacks or exploitation
  • Need to manage private keys yourself

Some popular crypto exchanges include:

  • Coinbase/Coinbase Pro
  • Binance
  • Kraken
  • KuCoin
  • Crypto.com

4. Mobile Payment Services

Some mobile payment services, such as PayPal and Venmo, now allow you to buy and sell cryptocurrency. This can be a good option if you are already using these services. However, it is important to note that mobile payment services typically charge fees for cryptocurrency trading.

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Pros

  • Easy to use familiar app interface
  • Can buy crypto alongside normal transactions
  • Some consumer protections

Cons

  • Higher fees than dedicated exchanges
  • Cannot withdraw crypto, held within app
  • Limited currency selection

5. Bitcoin ATMs

crypto-atms
crypto atms

Bitcoin ATMs are machines that allow you to buy and sell Bitcoin using cash. This can be a good option if you want to buy Bitcoin in person. However, it is important to note that Bitcoin ATMs typically charge high fees.

Pros

  • Transactions are anonymous
  • Instant access to buy Bitcoin with cash
  • No need for bank account

Cons

  • High transaction fees, around 5-10%
  • Only buy/sell Bitcoin, no altcoins
  • Require physical access to find ATM location

6. How to Buy Cryptocurrency on Cash App

Cash App is a popular way to buy cryptocurrency, especially for beginners. Here is a step-by-step guide on how to buy crypto on Cash App:

  • Download the Cash App mobile app for iOS or Android and register for an account.
  • Tap on the profile icon in the top-right corner and scroll down to ‘Crypto’ and tap ‘Enable Crypto’.
  • You will need to verify your identity by providing your legal name, birthdate, address, and the last 4 digits of your SSN or tax ID.
  • Once verified, tap the dollar sign icon on the Cash App home screen. At the bottom will be a ‘Bitcoin’ tab where you can enable Bitcoin buying and selling.
  • To buy Bitcoin, tap the ‘Buy’ button and enter the amount in dollars you want to purchase. Confirm the order.
  • The Bitcoin will be immediately added to your crypto wallet within the Cash App. You can track its value and choose to sell back to cash at any time.

The same general process applies to buying other cryptocurrencies like Litecoin or Bitcoin Cash, by tapping those tabs instead of Bitcoin. Overall, Cash App offers a fast and convenient way to buy crypto directly from your mobile device.

7. Buy Cryptocurrency Directly

buy-bitcoin-with-cash-in-person

You can also buy cryptocurrency directly from a cryptocurrency company. This is a good option if you want to buy a specific cryptocurrency that is not available on a traditional exchange.

For example, you can buy XRP tokens directly from Ripple, the company that created the XRP Ledger. On Ripple’s site, you can wire money directly to Ripple or use a debit/credit card to obtain XRP. This gives you access to the native token of the XRP ecosystem.

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Similarly, other blockchain projects like Uniswap or Polygon allow you to convert money directly into their ecosystem tokens. You interact directly with their decentralized applications to swap dollars for their crypto.

The benefits of buying directly from a crypto company include:

  • Access to unique native tokens
  • Avoid exchange fees or spreads
  • Support ecosystem development

The downsides include:

  • Limited payment options compared to exchanges
  • Less liquidity makes prices potentially more volatile
  • Lack of exchange features like trading or staking

Overall, purchasing cryptocurrency directly from a project can make sense for gaining exposure to unique assets or supporting a specific blockchain ecosystem. Just be aware it comes with fewer protections compared to centralized exchanges. Do your own research on any project before buying their native crypto assets.

Conclusionway to buy cryptocurrency

There is no single “best” way to buy cryptocurrency – each method has its own pros and cons. As you evaluate the different options, consider factors like supported currencies, fees, payments methods, features, and your comfort level with the platform.

For most beginners, starting with a mainstream exchange like Coinbase or using a payment app like Cash App is recommended. This provides an easier on-ramp to buying cryptocurrencies. But as you learn more, you may consider using specialized crypto exchanges to access unique features or buy more niche currency options.

Remember to start small and only invest what you can afford to lose when buying cryptocurrency. The market is still young and volatile. While the potential upside is high, there are also significant risks involved. Do your own research, choose your entry point carefully, and stay up to date on the latest crypto news. Being an informed investor is critical whether you’re a crypto beginner or expert.

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