Where & How to Buy Cryptocurrency in 2023

In the following section, we will analyse ways to buy cryptocurrency, starting from the platform to choose up to the final transaction.

Step 1: Find an appropriate platform to buy cryptocurrency

The first step to buying cryptocurrency is to understand which platform may better fit your needs. The differences between these platforms include commissions, allowed services, integrated wallets, security systems and the possibility to withdraw cryptocurrency.

Furthermore, you should consider that some platforms’ focus on a particular type of client and offers specific services these users may find useful. Before starting your trading experience, make sure to be aware of your knowledge limits and financial possibilities to choose the platform with which you can make the best use of your investments. 

Some of the most popular platforms are Coinbase, Binance, eToro, and Coinmama. Each of them has its strength and weaknesses on which you should focus to decide the one that best fits your need. For example, eToro is a great option if you are just starting trading. You are allowed to put your account in "copy mode" and automatically follow your favourite traders' decisions. 

Step 2: Registration / Create a New Account

When you have decided on the platform you want to use to buy cryptocurrency, you can go ahead with your registration. During this process, you will be asked to share some personal information, such as your full name and birth date. Each platform may require different levels of verification, but all will almost certainly include KYC. The choice you will have to make is between more regulated platforms that need full disclosure of your personal information or more discrete ones that are likely to be unregulated.

Step 3: Deposit Funds 

At this point, you will be able to make your first deposit. You will choose your favourite payment method, but keep in mind that accepted payments may change based on the platform you are using. Minimum deposit amounts may vary as well: for example, eToro requires a minimum fund of $200 to start making operations. Other platforms may as well not have a lower limit for deposits, like Pepperstone.

Step 4: Start Trading or Buying Cryptocurrency

Your funds should become available very quickly, depending on the method you chose to fund your account. 

You will now be able to trade or buy cryptocurrency, but the operations available to you may depend on the account type you have. If the platform you chose is a crypto broker, it will most likely offer you CFD and futures contracts. A cryptocurrency exchange will allow you to buy cryptocurrency and provide a wallet service that comes along with your account. 

There are some exceptions to these cases: Binance and BitMEX, for example, offer tools like margin trading, leverage tokens, crypto loans and future contracts to their users. These instruments are quite complex to use if you do not have the necessary experience, so you should be careful and do your due diligence before considering those options.

Step 5: Optional Steps

Now that you started using your platforms, you will be able to apply the strategy you prefer to start making a profit with your investment. Some of the actions you may take from here are the following:

• Moving funds to a wallet

If you plan to keep your investment for a more extended period, the best choice is to put your funds in a separate cryptocurrency wallet, preferably a hardware device. This will prevent possible hacker attacks against you.

• Sell high, rebuy low

Another option may be to profit from the trend of the market, trying to anticipate its oscillations, selling when the price is high and buying again when it lowers. This will give you the chance to profit from the difference.

Available Payment Methods for Buying Cryptocurrency

You can find that some payment methods work better than others, based on availability and personal preferences. Below we will outline some of the most popular methods people use.

• Buy Cryptocurrency with Cash

Like any other goods or services, paying with cash is becoming more complex with time, especially for this kind of financial service. You can buy cryptocurrency with cash in person or through a cryptocurrency ATM.

• Buy Cryptocurrency with Credit / Debit Card

Buying cryptocurrency with credit or debit cards is undoubtedly the most common payment method. Most platforms allow this type of transaction, but it still requires some waiting for the payment to be delivered depending on your service provider. 

• Buy Cryptocurrency with Bank Transfer

Every platform allows users to pay for their services with bank transfers. Some of them ask you to insert an identification code when you place the order on your bank portal, so make sure to remember this detail. The provider may have trouble identifying your payment if that number is missing.

• Buy Cryptocurrency with other Cryptocurrency

Another popular way to buy cryptocurrency is to exchange it with another crypto coin. Many platforms nowadays allow these operations. 

• Buy Cryptocurrency with PayPal

Users have widely asked for this payment method, as it is one of the easiest and quickest to use. Several platforms are now looking to integrate PayPal payments into their services. 

What are the Fees for Buying Cryptocurrency?

Cryptocurrency exchange and brokers are financial intermediaries and, as such, they make their money from transactions that take place on their platforms. This is why it is necessary for them to apply some fees to be able to keep running their service. 

This fee can be expressed as a flat tax that gets applied to any service or as a percentage of the transaction that is being executed. You should carefully evaluate what type of fees your platform applies depending on the strategy you will be using. If you plan to keep your funds in the long-term, maintenance fees will have more relevance compared to transaction fees. Conversely, if you exchange your investment daily, transaction fees or withdrawal fees will make more of a difference for you.

The cryptocurrency market is influenced by almost anything you can think of. World news events, stock market fluctuations, elections and even social media, to name but a few, have the power to affect the value of cryptocurrencies. If you are new to investing in crypto, you should dedicate enough time to researching and reading as much as you can about news, politics, recent developments and technical analysis before you actually buy cryptocurrency. Your work will pay off - the most informed investors are always better positioned to make the most out of the opportunities available to them. 

What drives cryptocurrency's price?

As mentioned above, many factors can influence cryptocurrency's price. Main influencers include world news events, national regulatory changes, technological developments, business partnerships and collaborations, elections, even celebrity endorsements and social media.

Another large influencer on the price of cryptocurrency can be economic uncertainty, as recently proven by the COVID-19 pandemic. During this time, cryptocurrencies demonstrated remarkable resilience to the financial strain. This, with other factors, caused a new bull run, with many investors being able to recoup losses caused by the lockdown, like loss of employment for instance.  

How to Sell Cryptocurrency

There are a few different ways to sell cryptocurrency. You may do this through an exchange, a direct deal, or a peer-to-peer transaction. Exchanges are the most natural choice since they were developed primarily to purchase and sell cryptocurrencies more safely and simply. However, if you want to sell to an individual directly rather than through the platform, you can do so either by meeting in person or online through a P2P network. It should be noted, however, that brokerage and exchange platforms facilitate transactions within a regulated environment, offering protection from bad actors. 

You may also choose to simply enter into a CFD. A brokerage platform would be the best choice for this approach. A CFD trade allows you to capitalise on market opportunities without having to actually take ownership of the underlying asset.