You heard the buzz, Bitcoin is soaring, the price just keeps going up and up. Are you one of the many persons concluding that it is too late to invest in and trade Bitcoin and other cryptocurrencies? Well, if you are, I am here to assure you that it is still very early times, cryptocurrencies are still in the infancy stages. If you feel the price of a Bitcoin is too high, then you should know that there are multiple other cryptocurrencies that are just starting to gain traction. Most of these other cryptocurrencies are fairly new so you can purchase some for less that 1 USD.
One main reason why the average Joe hasn’t yet started investing in cryptocurrencies is because it is not as straight forward as buying a precious asset and storing it in a vault. To get started with trading and investing in cryptocurrencies you need to know where to buy the currencies and how to exchange them for other currencies, and at the end of the day you need to know how to get your money back out of the system. In this article I walk you through the entire process and also share a few very important trading and investing tips that I have learned.
In addition to whatever you learn in this article, I would recommend that you also do your own research so as to be as informed as possible if/when you do decide to start investing and or trading cryptocurrencies.
Before we begin I would like to invite you to take the time out to watch this extremely informative video on Bitcoin and cryptocurrencies titled “Andreas M. Antonopoulos educates Senate of Canada about Bitcoin“. What is important about this video is it helps you to understand what future impact the Bitcoin technology will have, and in doing so will give you an understanding as to why Bitcoin is currently successful, why Bitcoin and other cryptocurrencies are here to stay, and how they are revolutionary along with problems that they are solving worldwide.
If you have decided to take the leap towards investing in or trading cryptocurrencies then i’ll walk you through everything I know. In this post you will learn:
- Where and how to purchase Bitcoin
- How to trade Bitcoin for other cryptocurrencies
- Why You Should Consider Investing in cryptocurrencies Other Than Bitcoin
- My current top cryptocurrencies
- How to safely store your cryptocurrencies
- How to sell your cryptocurrencies for USD
- Other Useful tips
Where and how to purchase Bitcoin
To safely purchase Bitcoin you need to do so from a Bitcoin exchange. A Bitcoin exchange allows you to do two things: Buy Bitcoin with United States Dollars (USD), trade Bitcoin for other cryptocurrencies. Most Bitcoin exchanges allow you to trade Bitcoin for other cryptocurrencies but not all exchanges allow you to buy Bitcoin with USD. You will first need to buy Bitcoin from an exchange that allows you to purchase it with USD then you can freely transfer it to another exchange that allows you to trade it for other cryptocurrencies.
Exchanges that allow you to buy Bitcoin
For persons outside of the US like myself, Bitcoin can be purchased with USD from Bitstamp, Kraken, and CEX.IO. There are multiple other exchanges, however, I am only familiar with these three and have only personally used two: Bitstamp and CEX.IO. I have signed up for a Kraken account, but have not yet utilized their services. Kraken is a very popular exchange and it has gotten good reviews, so it’s definitely worth a try.
Bitstamp – Bitstamp is a UK based Exchange, it allows international customers to join and you can purchase Bitcoin by wiring money (USD) to Bitstamp and also by using a credit card. My last bank wire to Bitstamp was done on a Thursday and Bitstamp received it on Monday morning which I thought was great. Typically a wire takes minimum three business days. If you are a Jamaican like I am, I recommend using NCB to do wire transfers, BNS literally turned me away with some stupid excuse that Bitstamp needs to provide an American bank for me to wire money to.
Bitstamp allows you to wire as low as $50 USD or even possibly a lower amount to buy Bitcoin, which is great if you just want to give it a try at first. If you plan on using a credit Card then you have a $100 USD limit.
If you plan on opening an account with Bitstamp please do so now! Bitstamp will require that you upload photos of a valid ID to them for the purpose of verifying your identity, due to the increase in customers wanting to register with Bitstamp, this registration process can take over a week.
Kraken – “Founded in 2011, San Francisco-based Kraken is the largest Bitcoin exchange in euro volume and liquidity and also trading Canadian dollars, US dollars, British pounds and Japanese yen. Kraken is consistently rated the best and most secure Bitcoin exchange by independent news media.”
I have very little experience with using Kraken however, it is highly rated and seems to have all the options and services that you need. Kraken allows you to buy Bitcoin and possible other cryptocurrencies with USD.
CEX.IO – CEX.IO is not very popular, however it does allow international customers to purchase Bitcoin using a credit card or by first wiring money to an account you have set up with them. If you choose to wire money to CEX.IO please note that you have to wire at least $5000 USD. If you plan on using a credit card for purchasing Bitcoin from CEX.IO, the least amount of Bitcoin you can purchase from CEX.IO is 0.01 Bitcoin. As of this writing, 0.01 Bitcoin is $220.35 USD.
Please note that all exchanges that allow purchasing of Bitcoin using a credit card will charge you a slightly higher exchange rate.
How to trade Bitcoin for other cryptocurrencies
Most exchanges do not allow you to buy cryptocurrencies other than Bitcoin directly using USD, to get other cryptocurrencies other than Bitcoin you need to first purchase Bitcoin then exchange it for another currency.
Another thing you should note is that Exchanges such as the one’s that I have listed which allow you to purchase bitcoin with USD have very few other cryptocurrencies that you can trade bitcoin for. In order to trade Bitcoin for other cryptocurrencies you need to send your Bitcoin to an exchange that has a huge volume of multiple cryptocurrencies. The exchanges that I am now referring to are those that do not allow you to buy Bicoin directly with USD. Examples of such exchanges are: Bittrex, Cryptopia, Binance.
Bittrex – Bittrex is currently my number one go to exchange for trading Altcoins (Altcoin is a popular term used to refer to the 100+ cryptocurrencies other than Bitcoin). Bittrex is a United States based exchange and is largely used by US citizens, but it is accessible to international customers. It is safe to say that Bittrex has all the popular cryptocurrencies and then some.
As I have mentioned above, you need to buy Bitcoin or another cryptocurrency, send that currency to Bittrex and then you can trade it for other currencies.
Below you can watch a video on how to trade cryptocurrencies on Bittrex. At first this might seem like a complicated task, but I assure you, this is only due to the fact that you are new to the interface of these exchanges. Once you get familiar with one exchange, then you will know how to use all of them because they all function pretty much the same way.
Cryptopia – Cryptopia is not as popular are Bittrex, but I do believe that you can find altcoins on Cryptopia that have not yet listed on Bittrex, so it is good to have an account on it just in case. One of my top altcoin is Electroneum, this particular coin has just launched and is three days old as of this writing. Cryptopia is currently the only exchange that has currently listed Electroneum so it’s always good having an account in case you want to be an early investor in new projects that are listed on Cryptopia.
Cryptopia works very similar to Bittrex, i’ve added a video below showing how to transfer Bitcoin to Cryptopia then exchange it for Electroneum. Please note that this is the same process you would use if you were exchanging Bitcoin for any other altcoin on Cryptopia.
Binance – Binance is very similar to Bittrex, however, it has a more advanced user interface for those who prefer more options. Based on the cryptocurrency listings I would also assume that Binance has roughly the same amount of Altcoins available to trade as Bittrex. Binance is an international Cryptocurrency exchange with offices in Tokyo, Hong Kong, Singapore, Europe, South America and more. Binance was launched just July of 2017 and has quickly grown to become one of the largest cryptocurrency exchanges.
Why You Should Consider Investing in cryptocurrencies Other Than Bitcoin
As you become more familiar with other cryptocurrencies such as Ethereum, Ripple, Litecoin, Dash, Electroneum etc., you will quickly learn that they are not just some other coin like Bitcoin trying to compete for second place. These altcoins and many others are in fact new technological ideas created on top of the blockchain technology, and they are aiming to solve current real world problems which makes them solid future investments.
Ripple for example is utilizing the blockchain technology to help banks send and receive wire transfers at far lower prices and at super fast speeds solving two great issues that banks currently have. It literally takes minimum two-three business days to send a bank wire transfer to another country around the world, with Ripple banks can do that same transfer within less than a minute for a fraction of the cost.
What you should also note about some of the popular altcoins is that they sometimes increase in price far faster than Bitcoin, so if you invest wisely you can make far better returns.
My current top cryptocurrencies
For the short time that I have been learning about cryptocurrencies, I have chosen a few favorites which I think will be good future investments. Please note that this is not financial advice, you need to do your own research so you can be comfortable with your investments.
My current top Cryptocurrencies are:
The USD evaluation of the overall cryptocurrency market has seen a huge increase over the years. All top cryptocurrencies have increased in price and are expected to go even higher as more persons flood the cryptocurrency markets. As a result of this, it is highly predicted that all top cryptocurrencies will be good investments.
How to safely store your cryptocurrencies
Due to the rapid increase in prices of cryptocurrencies, they have become a honeypot for hackers. Cryptocurrencies themselves cannot be hacked or are super secure, however, hackers have been quite successful in figuring out ways to steal them from their owners. If you have been keeping up with cryptocurrency news then chances are you’ve heard of multiple incidents where exchanges and individuals have been hacked and cryptocurrencies stolen.
Due to the high risk of storing cryptocurrencies online (in exchanges) it is highly recommended that you store your cryptocurrency in a desktop wallet, in a paper wallet or in a Hardware wallet.
Desktop wallet – A desktop wallet is a software provided by the developers of a specific cryptocurrency, it is installed on your computer and allows you to send your cryptocurrency to it for storage. Desktop wallets safely secure your crypto coins in the event that the exchange that you are using gets hacked.
You can also utilize third party desktop wallets such as Exodus. Exodus allows you to store multiple types of cryptocurrencies all on your computer. These are very secure and also allows a way for you to restore your wallet to another computer if your current computer crashes.
Paper Wallet – In short a paper wallet is a piece of paper printed out by you that stores the keys/ address (characters and/bar code) which links to your cryptocurrencies stored on the network. You can print a paper wallet, transfer your cryptocurrencies to the address and store that paper wallet in a vault. Many persons whom have large amounts invested in cryptocurrencies choose this method to store their currencies since it’s impossible for someone to hack.
Hardware Wallet – some desktop wallets can be installed on flash drives as a means of keeping your cryptocurrencies safe, there are companies such as Ledger which provides a very popular hardware wallet called the Ledger. The Ledger is a password protected hardware wallet in the form of a flash drive which provides a super secure way to store your cryptocurrencies.
Ledger offers multiple types of Hardware wallets for different types of users:
How to sell your cryptocurrencies for USD
Selling your cryptocurrencies for USD is very similar to the process of initially purchasing cryptocurrencies with USD. Please note that the same exchanges that allow you to purchase Bitcoins will allow you to sell them for USD and also provide a bank wire transfer option for you to wire the money back to your local bank account.
You should also note that there are multiple companies that offer Cryptocurrency debit visa cards, these cards allow you to withdraw money from a local ATM at the current exchange rate of your cryptocurrency. Two companies that offer Cryptocurrency debit visa cards are TenX and Cryptopay.
- Buy low, sell high
- Try to avoid watching the price of your invested cryptocurrency 24/7
- Have a solid plan before you decide to invest
- Diversify Your investment
- Set Strong passwords and use 2-Step verification on Exchanges
Buy low, sell hight – The only possible way to make money from an investment is to buy when the price is low and sell it when the price goes up. This might seems like a no-brainer, however, almost every singe person who ends up trading Bitcoin seems to fail at doing this because of the lack of patience and fear of missing out (FOMO). Due to the emotional part of us and sometimes greed, we make split second decisions to buy a cryptocurrency because we see the price going up and up, but as soon as you buy, other persons decide to sell and suddenly the price goes down below the price that you bought the coin for, when you notice the bad decision that you’ve made you immediately sell at a lower price fearing that the price might go even lower.
Ensure that you do prior research before investing in any cryptocurrency, if you end up investing in a cryptocurrency that you believe is a very good project, and the price goes down after investing, I would recommend that you be patient and don’t sell your position because good projects always go back up in price.
Try to avoid watching the price of your invested cryptocurrency 24/7
After investing in cryptocurrencies one very popular thing that everyone does is to get addicted to watching the price every minute of the day to see if it will go up or down. It’s all good when the prices go up, but not so good when it goes back down, and due to the emotional attachment you might end up making quick decisions that could negatively affect you financially.
If you have done your research and invested wisely then try not to worry when prices don’t suddenly go in your favor. Unlike the stock market the prices of cryptocurrencies are constantly rising, so many persons expect to make a fortune overnight. While this is possible you should still plan on being patient because some good projects might take a few months before they gain mass adoption.
Have a solid plan before you decide to invest
Cryptocurrencies are still very new and in some ways are very different from previous investments such as the stock market. Their value can literally go up over 100% in just a few hours and back down twice as fast. If you plan on investing long term lets say minimum one year, then this shouldn’t be something that you have to worry about. Even though prices fluctuate short term, the overall price long term of good cryptocurrencies iis always higher.
If you plan on investing short term, lets say you intend on taking some profits after your investment reaches a certain price, I would recommend that you leave the amount of cryptocurrency that you plan on selling on the exchange of your choice and set a sell order at the price that you wish to take your profits. When placed a sell order automatically executes at the given price so you don’t need to be online to manually sell your coins at your preferred price. All exchanges allow you to set both buy and sell orders.
Diversify Your investment
Similar to investing in stocks, it is recommended that you do not put all your eggs in one basket. No matter how successful one cryptocurrency is, it is always best to invest a fraction of your money in another project just in case something goes wrong. Diversifying your portfolio is also a good solid way to maximize on your returns.
Set Strong passwords and use 2-Step verification on Exchanges
For added security, please ensure that you set strong passwords when signing up for an account at any cryptocurrency exchange and use 2-Step verification on exchanges that offer the option. 2-step verification is quite simple, just download the Google Authenticator app and scan barcode that your exchange provides to set it up. Once set up the Authenticator app will generate a code at specific intervals which you will use to login to the exchange.
Cryptocurrencies are predicted to play a major role in tomorrows financial world. It is predicted that many countries will adopt them and they will become a standard currency used for the purchase of everyday goods and services. This is part of the reason why the adoption of cryptocurrencies is increasing rapidly all across the world. If you had decided to invest in any one of the top ten cryptocurrencies last year, you would have most certainly doubled and in most cases over ten times multiplied your investment today.
Don’t rush in, take time out to increase your knowledge on the subject and make your own informed decision before you decide to invest. If after you have done your research you decide not to invest, there is a very good chance that you will feel very stupid this time next year.
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