Thursday, June 23, 2022

How To Get Started On Crypto

Choosing A Crypto Exchange For Trading

How to Get Started With Crypto

Once youre ready to start trading cryptocurrencies your first job will be to find a suitable exchange. That might not be as easy as it sounds because there are different types of exchanges to consider and different regulations based on where you live.

The first consideration to be made is whether you want to use a centralized exchange or a decentralized exchange . For beginners we do recommend using a centralized exchange. It will be easier to get started, and they will provide you with more tools and support. Decentralized exchanges are great and we love them, but they arent really suitable for beginning traders in our opinion. Plus the decentralized exchange will limit you to trading only the coins on the chain thats supported by the DEX .

There are a huge number of cryptocurrency exchanges to choose from, and youll want to read through their terms and conditions to get a feel for which one will support your own trading best. Some have a wider selection of cryptocurrencies, some have better fees, and some have better support.

You have so many exchange choices.

Other potential exchanges include Kraken, BitMex, Poloniex, and Gemini.

Note that many exchanges remain crypto-only, meaning you are unable to deposit or withdraw fiat cash from the exchange.

Whos Involved In Crypto

Silicon Valley techies and Wall Street wizards arent the only ones trading Bitcoin. An August 2021 CNBC and Momentive Poll found that 1 in 10 people in the U.S. has invested in cryptocurrencies. Thats why Coinsource has Bitcoin ATMs in states from coast to coast.

60% of respondents expressed interest in cryptos long-term growth, 33% appreciate the ease of making their own trades, and 26% enjoy the excitement of investing.

What Is A Paper Wallet

To keep it very simple, paper wallets are an offline cold storage method of saving cryptocurrency. It includes printing out your public and private keys in a piece of paper which you then store and save in a secure place. The keys are printed in the form of QR codes which you can scan in the future for all your transactions. The reason why it is so safe is that it gives complete control to you, the user. You do not need to worry about the well-being of a piece of hardware, nor do you have to worry about hackers or any piece of malware. You just need to take care of a piece of paper.

Also Check: What Is Cryptocurrency Mining And How Does It Work

Learn About Fundamental Analysis

Fundamental analysis is one method for determining the actual value of an asset. In fundamental analysis the financial and economic factors of the asset are studied to reach whats considered a fair value for the asset. This analysis can be very broad and takes in such things as the broad economy, conditions within the industry, and the state of the company or project, which can even include the strength of the brand and the management.

The ultimate goal of fundamental analysis is to determine the fair value of the asset to see if it is currently overvalued or undervalued. Then the trader or investor can use that information in their investing decisions.

If you want to find the true value of an asset fundamental analysis in invaluable.

When it comes to performing fundamental analysis on cryptocurrencies the analysis will include the emerging field of on-chain metrics. This includes the number of holders, the top holders, how many addresses are on-chain, the growth of the blockchain, hash rate, and many other metrics. Using all of the available data about the project the analyst can determine the strength of the network and the potential value of the project.

In time the market will mature and then fundamental analysis will be far more useful.

Keep Assets In Cold Storage

How to Get Started with Crypto: 3 Simple Ways

While you may have selected a reputable exchange in order to store your cryptocurrency, you never know when the sky might fall. The cryptocurrency space has a history of surprises when it comes to hacks. Funds can be lost in a hack at any moment, so its always encouraged to keep your assets off the exchange as much as possible. This is certainly a leap, so take your time to research options. One option for a convenient mobile hardware wallet is the Ledger Nano X. Its simple, it works, and you can rest easy because your funds are secure.

Being the guardian of your own bank is great, but it means you must find services which can accommodate keeping funds off the exchange. Unfortunately, the options are few and far between. Thankfully, those people who rebalance their portfolio can continue rebalancing even when most assets are stored offline. This is possible because rebalancing only requires trading the delta for each rebalance period. The delta is the amount of the asset which must be traded in order to once again reach your desired allocations. You can read more about how to keep your assets off the exchange and still rebalance in this article here.

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Indirect Solutions For Crypto Trading

While things are getting better in terms of access and removing restrictions on cryptocurrency exchanges, there will likely still be some of you out there who will either have difficulty dealing with a traditional centralized exchange, or simply dont want to deal with one of these exchanges. Fortunately there are still some options that you could explore.

There are plenty of cryptocurrency exchange alternatives to choose from.

If you still want to buy actual cryptocurrency you could try Squares Cash App, which is a particularly good way to avoid using Coinbase if you are just interested in buying and selling Bitcoin. This is also a good option if you need to buy some Bitcoin to deposit to another exchange for trading.

Some other options for very basic crypto trading include Robinhood and Paypal. The downside to these options is that neither allow you to withdraw crypto from their platform, and youll only find a handful of the largest cryptocurrencies to trade.

The upside to using Robinhood is they also offer access to equity markets, meaning you can take an even more indirect approach to crypto trading through the various Greyscale Trust products, or through trading stocks that are related to crypto, such as Coinbase, Bakkt, or Riot Blockchain.

How To Get Cryptocurrency

To get many of the most notable cryptocurrencies, people have to mine them. This means they get crypto as a prize for validating security on the network, a job that gets more and more complicated as time goes by and the blockchain grows. To do this validation, miners require high-powered computers, which is why youll see huge Bitcoin farms packed with machines to work through the necessary calculations around transactions.

At this point, validating demands a large amount of computing power, not to mention a considerable amount of energy. This makes setting up a mining farm very expensive and no longer worth it for individuals to get involved. Theres also the question of the environmental impact of these digital coinseven the greener versionswhich may motivate more climate-conscious users to stick to buying and selling.

Recommended Reading: How To Transfer Bitcoin To Your Bank Account

Choose Crypto Exchange Platform To Trade On

At present, there are a number of popular crypto exchanges available that can be utilized. If you are wondering what exchanges are, please note that the portals which connect our world to the crypto-worlds are exchanges.

Since each exchange has different terms of services, therefore it is advised to perform a lot of research and go through several reviews. Before selecting an exchange platform, make sure that the exchange is available in your area. For instance, Coinbase, one of the most popular exchange platforms, is not available in India. Apart from this, check the reputation of the exchange. For example, are people happy with their services, is it ever hacked, how secure it is? Most importantly, check for exchange rates. Different exchanges have their own exchange rates, which may vary. If you find satisfactory results, you can finalize one.

Some of the most popular crypto exchange platforms are:

  • Coinbase
  • Cash App and others.

Get A Ledger Hardware Wallet

Easiest Way To Make Money Trading Crypto in 2021 (How to Get Started)

Protect yourself with a hardware wallet. I recommend Ledger because theyre the simplest to use, in my opinion.

What makes a hardware wallet so secure? On the Ledger, you are given a random list of 24 words in a specific order. With your hardware wallet, youll get a sheet of paper where you can write them down in order. These are not generated on your computer and will be generated directly on your advice. So even if your computer was compromised, your recovery seed would be safe.

Youll be required to create a pin, and you also have the option of an optional passphrase, which adds an extra layer of security. For the long-term holder, you need a hardware wallet. Not only are they easy to use, but theyre also about as secure as you can get.

Read Also: Why Should I Buy Cryptocurrency

Wait For Crypto Exchange

ETFs are extremely popular investment tools that let you buy exposure to hundreds of individual investments in one fell swoop. This means they provide immediate diversification and are less risky than investing in individual investments.

There is a huge appetite for cryptocurrency ETFs, which would allow you to invest in many cryptocurrencies at once. No cryptocurrency ETFs are available for everyday investors quite yet, but there may be some soon. As of June 2021, the U.S. Securities and Exchange Commission is reviewing three cryptocurrency ETF applications from Kryptcoin, VanEck and WisdomTree.

To Trade Or Not To Trade

When you buy or sell a cryptocurrency, you are actively taking ownership of the coin itself.

These purchases are affected via a cryptocurrency exchange, and you will also have to choose a cryptocurrency wallet to securely and safely store your cryptocurrency.

If you are trading in cryptocurrencies, then things are a little different.

When you spread your bets or even straight trade your cryptocurrency, you are speculating on whether the market that you choose will rise, or fall, when you are trading in cryptocurrencies, you never actually have direct ownership of the currency that you are trading.

Trading is excellent fun, and when done well, you can be set to make yourself a hearty profit. It is quick and easy to open an account, and you can usually be trading within five minutes.

It does require that you keep your finger on the pulse of the cryptocurrency industry such as reading the news and monitoring trends and a whole variety of charts.

To understand the substantial difference, read our article on The Difference Between Investing and Trading Cryptocurrency.

Investing In Crypto

If you decide that investing in cryptocurrencies is something you want to try, you are going to need to find yourself an exchange where you can purchase your coins.

There are two types of exchanges, those where you can purchase your cryptocurrency with fiat currency, and those where you need to hold a currency such as Bitcoin already, to be able to buy other types of coins.

Also Check: How Is Money Made In Cryptocurrency

Exchange Cryptocurrency To Cryptocurrency

If however, you already have some Bitcoin stashed, or you would prefer to purchase Bitcoin and then use it to trade with other cryptocurrencies, then these cryptocurrency- cryptocurrency exchanges are most definitely worth a look.

This is usually the next step, after you dip your toes into cryptocurrency world, but these are the exchanges you should be using if you decide to go for trading:

This is one of the fastest growing exchanges in the world. Launched in 2017, it has grown at an incredible rate and managed to acquire a pretty good reputation in the process.

Binance has also become a crypto-community latest sensation due to a large number of available coins.

It is available in multiple languages, it offers a very user-friendly interface, and it also provides super high-speed processing of orders, which is very convenient. You can only trade cryptocurrencies on it though, and all payments must be effected in cryptocurrency, not fiat currency.

One of the great things about it is that they are always adding new coins and it is one of the first to offer coins after a successful ICO, something a lot of the other exchanges are a bit slow to pick up.

Other Ways To Buy Or Invest In Bitcoin

Crypto Chart Reading Basics  How to Get Started Trading ...
  • Bitcoin ATMs. These work like normal ATMs, only you can use them to buy and sell bitcoin. Coin ATM Radar shows more than 7,000 bitcoin ATMs around the U.S.

  • Peer-to-peer bitcoin owners. You can buy bitcoins directly from other bitcoin owners, much like you would buy items on Craigslist, through peer-to-peer tools like Bisq, Bitquick and LocalBitcoins.com. Use extreme caution if buying bitcoin directly from individuals.

  • Bitcoin futures.TradeStation offers a way for investors to trade on bitcoin futures, but this is pro-level stuff, not for amateurs. Heres how to get started trading futures.

  • Grayscale funds. Grayscale Investments is a digital currency asset manager. Two of its investment trusts Grayscale Bitcoin Trust and Grayscale Ethereum Classic Trust are publicly traded over the counter, which means you can buy them through many discount brokers. There are fees, and GBTC often trades at a premium, that is, GBTC shares often cost more than bitcoin, even though bitcoin is its only holding. The thinking is that some investors are willing to pay extra to buy bitcoin through a traditional exchange, without needing to worry about wallets and storage.

Recommended Reading: How To Trade Crypto On Coinbase Pro

Selling Your Cryptocurrency On Coinbase

With your bank account or Paypal account linked, you can sell as much cryptocurrency as your weekly withdrawal limit allows.

Remember the Buy/Sell button? Click there.

In Buy/Sell, click the Sell Tab. First, type. in the dollar amount you want to sell or click sell all. You can also choose the amount in the crypto youre selling. Second, select the crypto youre selling. Then select where youre depositing it to. Finally, click that blue button, and sell!

Spot Trading On Binance For Beginners

For trading the spot markets, we need to navigate to Markets at the top of the screen. This is situated next to the Buy Crypto tab. Search the crypto or coin that you would like to trade. In the case of our tutorial, we would like to trade Polygon . Seeing that we will be paying for MATIC with USDT we will click on the Fiat Markets tab. Next, click on Trade.

Binance Market MATIC/USDT

This will bring us to the trading window. Within the trading window, we have the option of either buying or selling the MATIC/USDT pair. . This can be done with either a Market order , which will lead to an immediate transaction. Or, a Limit Order is when you input a specific target price at which you would like the order to execute. For the purposes of this tutorial, we will be executing a Market order Buy.

To execute our Market buy, we will click on BUY at the top. Then enter the amount of USDT we wish to trade, $199.32 or maximum in this case. Make sure that the Market order tab is selected and click the green button, Buy MATIC.

MATIC Market Buy Order

BOOM. Congratulations, you have just executed your first trade. As you can see in the screenshot below, we can now see confirmation of the executed Market buy. Once we navigate back to our Fiat & Spot wallet, we will see we now have MATIC worth $199. Or 142.2 MATIC.

MATIC Confirmed in Wallet

For selling obviously we would follow the same procedure, except that we would select SELL and then click, Sell MATIC.

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How Many Cryptocurrencies Are There What Are They Worth

More than 10,000 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs. The total value of all cryptocurrencies on Aug. 18, 2021, was more than $1.9 trillion down from April high of $2.2 trillion, according to CoinMarketCap. The total value of all bitcoins, the most popular digital currency, was pegged at about $849 billion, regaining some ground from recent price lows. Still, the market value of bitcoin is down from April high of $1.2 trillion.

How To Buy Cryptocurrency On A Decentralized Exchange

How / Where to Start Mining Crypto? Simple Software to get started!
  • First create an account on a centralized exchange
  • Create a hot wallet by adding as an extension to your browser
  • Be sure to physically write down your secret passphrase on paper and keep it safe!
  • Transfer crypto from the wallet on your centralized exchange to your hot wallet
  • Evaluate and choose a blockchain ecosystem you want to use
  • Find a decentralized exchange that has the liquidity and assets you want on the ecosystem you want
  • Buy crypto!
  • The question, what type of exchange to use depends on a number of factors. What is your risk tolerance? What are your investment goals and timelines? What is your investment or trading strategy? How important is security, privacy, or decentralization to you?

    There are a lot of variables and trade-offs to consider, and no one-size fits all answer. One thing is for certain: crypto investing can be risky so do your own research, and do not make investments without strong conviction.

    If you want to learn more about how to safely invest in CeFi and DeFi exchanges, our Crypto Investment School course has a comprehensive curriculum taught by crypto investors whove got real-world experience.

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