Note: This is not financial advice. This is for educational purposes only. Please note that cryptocurrency is a highly volatile asset class; only invest what you can afford to lose.
"How to buy crypto" is a popular query that's blowing up Google's search engine at the moment as more people become interested in cryptocurrency. El Salvador recently passed a bill to adopt Bitcoin (BTC) as legal tender, Elon Musk is gushing over Dogecoin, and there's plenty of talk about Ethereum as it's the most popular digital asset next to BTC.
As such, cryptocurrency is becoming more mainstream; many are even ready to purchase digital tokens for themselves. Buying intangible, virtual currencies may sound like a far-out, baffling concept for some, but I assure you that the process is super easy. In fact, it's so simple, you'll be kicking yourself for not joining the crypto bandwagon sooner.
How to buy crypto
Before buying cryptocurrency, you must choose an exchange that has the digital asset you want. Most exchanges will have Bitcoin, Ethereum and Dogecoin due to their popularity and high demand, but some lesser-known cryptocurrencies like XRP and SafeMoon require specific outlets (e.g. decentralized exchanges) for purchasing them (I have guides on how to purchase XRP and SafeMoon).
For the sake of simplicity, this guide will focus on purchasing well-established cryptocurrencies. The best cryptocurrency exchange for beginner crypto investors is Coinbase. There are two versions: Coinbase and Coinbase Pro. The former's UI is highly intuitive and easy to use. The downside is that its fees are ridiculously high. Coinbase Pro, on the other hand, has an off-putting UI that targets advanced traders, but its fees are significantly cheaper.
For this tutorial, we'll be focusing on how to use Coinbase Pro to buy crypto. Why? Because a smoother UI simply isn't worth the upcharge. This tutorial will help you master Coinbase Pro so you can buy today's most popular cryptocurrencies.
1. Sign up for a Coinbase account. Although Coinbase Pro is a separate platform from Coinbase, you must onboard with Coinbase before you can use the Pro version.
2. Go to Pro.Coinbase.com.
3. Consider how much you'd like to spend on crypto. You should also compensate for any fees. Click on "Deposit."
4. Click on your currency. For this guide, I'll be using USD.
5. A window titled "Deposit USD" will pop up. You have the option of either clicking Bank Account (ACH transfer) or Wire Transfer. I'd recommend the former because Coinbase Wire Transfers come with a $10 fee (including whatever fee your bank tacks on).
6. A new window will appear prompting you to input how much money you'd like to deposit into Coinbase Pro under "Amount."
7. Click "Preview Deposit" followed by "Deposit USD."
Although the deposit hasn't been cleared yet, Coinbase lets you to trade instantly. The trade-off is that you're not allowed to withdraw any funds off the platform for 5 to 6 days.
How to buy crypto with your deposited funds
1. Determine which cryptocurrency you'd like to buy. In this case, we'll use Dogecoin as an example. Click on the "Trade" tab.
2. On the top-left, click on "Select Market." In the search bar, type in Dogecoin (or whatever crypto you prefer). Trading pairs will appear. In my case, DOGE-USD popped up. This just simply means that I can swap USD for DOGE and vice versa. Because I have USD I want to trade for Dogecoin, I'll click on DOGE-USD.
3. Under "Order Form," make sure the "Buy" button is selected in green. Market should be selected by default (this means that you'll buy your cryptocurrency at its current price). You can also choose Limit and Stop for advanced trading techniques, but to keep it simple, let's go with Market.
4. Type in the amount you'd like spend on your crypto under "Amount." You can click on "Max" if you want to use all of your fiat. You'll get a quote on Coinbase's fee. In my case, spending $500 on Dogecoin begets a 20-cent fee. (On regular Coinbase, the fee would be $7.24!)
5. Click on "Place Buy Order," and voila, you've got your crypto!
Crypto buying tips
Now that you know how to buy cryptocurrency, there are some tips you should be aware of before diving into the digital-asset world.
- To keep your cryptocurrency safe, get a Ledger Nano X or Trezor Model T to store you digital assets in a hardware wallet (as opposed to keeping it online where it's susceptible to being hacked)
- Stay away from cryptocurrency exchanges that don't allow you to move your digital assets to other platforms and wallets (e.g. Robinhood)
- Enable two-factor authorization to add an extra layer of safety to your Coinbase Pro account
As always, make sure to exercise proper risk management when buying cryptocurrency; it's an extremely risky asset class.