There are now plenty of investment tips for those taking their first steps into cryptos. However, when Bitcoin was launched in 2009, it was just an interesting phenomenon in the world of finance. Although more far-sighted people saw its potential, interest in cryptocurrencies only developed many years later.
Crypto investments are growing in popularity, mainly due to the continued support that decentralized finance ( DeFi ) is getting from billionaires and tech leaders in today’s world. Today, investors can use exchanges like Bybit to buy and obtain cryptos.
However, if you plan to invest in currencies, you should only do so if you understand that cryptos are a high risk and high reward investment. Since cryptocurrencies are fluctuating, you risk suffering significant financial losses if you start investing being misinformed about them.
In this guide, we discuss some investment tips so that beginners don’t make a fatal mistake.
How to invest in cryptocurrencies as a beginner
As a beginner, you can invest in cryptocurrencies by choosing a crypto exchange or broker, creating and verifying your account, depositing an amount in fiat currency for investment, placing your order for cryptos and selecting a storage method, such as a wallet.
But that’s just a summary of what you need to do to invest. If you want to learn how to get started in cryptocurrencies and receive crucial investment advice on where and how to start, this section will guide you through this step.
Choose a cryptocurrency exchange or broker
First of all, you need to select a broker or a cryptocurrency exchange. They allow you to buy cryptocurrency but they have specific differences.
Cryptocurrency exchange platform
A crypto exchange is a place where you can trade cryptocurrency with buyers and sellers. The fees collected by these platforms are generally low. However, they offer several types of transactions and interfaces that may seem difficult to understand at first.
Some popular cryptocurrency exchanges include Bybit, Coinbase, and Gemini.
When choosing an exchange, be sure to select one that allows you to buy crypto with fiat currency, such as US dollars. Some platforms only accept crypto, which means you will need one cryptocurrency to buy another.
As a beginner, you may not own cryptocurrency. If so, you will need an exchange that accepts fiat currency to purchase your crypto.
A cryptocurrency broker makes it much easier to trade cryptos than an exchange. The interface is easy to use, although the fees can sometimes be higher.
Two popular cryptocurrency brokers are SoFi and Robinhood.
The importance of crypto wallets will become apparent as you read this material. Some crypto savvy enthusiasts also prefer to keep their holdings in hardware wallets . That being said, it is essential to keep in mind that some brokers do not allow you to transfer your holdings from their platforms.
For example, SoFi and Robinhood do not allow you to move your holdings into a wallet or elsewhere from your account. If you ever want to keep your cryptocurrency in a secure wallet, you will need to think about this when choosing a broker.
Create an account
After choosing an exchange or broker, the next step is to sign up. Platforms require you to verify your identity through different methods. This is essential to prevent fraudulent activity.
For verification of your identity, you may need to submit a scanned copy of your passport or driver’s license. The platform will then ask you to upload a selfie to verify that your face matches the photo on your driver’s license or passport.
To buy crypto from an exchange or broker, you must have fiat currency in your account. You can deposit money there by bank transfer or debit/credit card.
After depositing the funds, you will have to wait a few days before using that money to buy crypto. The duration depends on the platform you are using.
Pro Tip: While you can use your credit card to deposit funds on some cryptocurrency exchanges, we don’t recommend doing so. Your credit card company will treat this purchase as a cash advance. Generally, cash advances involve a higher interest rate as well as associated fees. As a result, you may have to pay a certain transaction percentage in the form of cash advance fees.
Choose a cryptocurrency to buy
Once the money you have deposited is available, you can choose from hundreds, if not thousands, of cryptocurrencies. Among the most popular are Ethereum and Bitcoin.
You can identify a cryptocurrency by its symbol, which looks like a nickname. For example,