Looking to buy crypto but don’t know how? It may seem like there are a ton of hoops to jump through, but it really just comes down to being prepared before you start your next exchange. In this article, we’ll walk you through the entire process of converting fiat currency (like USD) into cryptocurrency, including what steps you need to take beforehand, what you should look out for when trading with an exchange and how to protect yourself from scams and hacks along the way.
The reason why people don’t start with crypto
Without a doubt, one of the biggest deterrents for people when it comes to investing in cryptocurrency is that they don’t know how. It’s intimidating. The idea of having to purchase and store a digital currency like Bitcoin can be overwhelming. Not only do you have to take into account how much money you’re willing to invest, but also how you’re going to purchase your first coins and how you plan on storing them safely. If you want to convert fiat (traditional currency) into crypto (digital currency), there are three main options: Buy with cash or credit card; buy with another digital currency; or mine your own coins. Let's look at each option in more detail...
Is it hard?
Yes. Yes it is. It’s hard to buy crypto, let alone convert fiat currency into crypto. There are a few reasons for that. First of all, because most crypto exchanges only accept credit cards or wire transfers, neither of which an average user is likely to have on hand. To add insult to injury, even when you do find an exchange that accepts these forms of payment, they often charge high fees per transaction—and higher than some bank-to-bank transactions! In fact, many exchanges will charge you between 5% and 10% for any single purchase over $100 USD. That’s certainly not what we’d call ideal or convenient; luckily there are still some ways around these limitations
Where do I start?
One question we frequently hear is, where do I start? Well, when it comes to trading cryptocurrency like Bitcoin, you’re going to need a few things: a wallet where you can securely store your digital currency, an exchange where you can buy and sell coins (aka your fiat), and an account with a crypto-only exchange where you can convert your fiat into coins. Let’s walk through each one.
What are my options?
The first thing you need to do is figure out how you’re going to acquire your cryptocurrency. Once you’ve done that, it comes down to how you want to manage your holdings—that is, which type of wallet will best suit your needs. Do you prefer control over security? Then go with a paper or hardware wallet. Do you care more about mobility? Then opt for a mobile app-based wallet. And so on and so forth. In addition, if/when (we hope!) crypto goes mainstream, it’s possible that banks and other traditional financial institutions will begin offering digital-to-fiat solutions—which would make it even easier than ever before! You can check out Bankrate’s resources on crypto wallets here.
Which option is best for me?
If you want to get into cryptocurrency but don’t know how, there are several different ways you can go about it. Read on for a breakdown of each option. The first step is deciding whether you want to buy crypto or mine it. Buying cryptocurrencies through an exchange like Coinbase is simple, and most exchanges accept both credit cards and bank transfers for purchases, making it easy for people with cash on hand (or card in wallet) to simply buy bitcoin. However, buying crypto doesn’t give you any financial control—your tokens remain locked in an exchange until you decide to cash out your holdings by selling them or transferring them away from an exchange. If that’s what you want—quick simplicity—then buying might be right for you.
Conclusion
If you’re interested in converting fiat to crypto, but you don’t know where to start, there are a few easy ways that we’ve outlined above. Which option is best for you will depend on your needs and preferences. If you’re a long-term investor with a lot of money to put into your portfolio and you want centralized control over your investments, using an exchange may be best for you. If you’re looking for fast access, security and less overall hassle from entering and exiting trades—or if you want an easier way to convert fiat into crypto in the first place—you might find that buying crypto directly from an ATM fits your needs better.
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