Look for a physical address for the exchange to confirm that the exchange is located in your country. You can typically find this on an "about" page that lists basic information about the exchange. Limit your choices to exchanges that take traditional money. Some exchanges require bank transfers, while others accept PayPal or credit or debit cards. While using your credit or debit card for your purchase may be convenient for you, it is less secure than other methods. You also want to take note of how long the exchange takes to complete your transaction.
If you are comparing two exchanges that are otherwise equal, but one takes over a week to complete a transaction, while the other completes transactions within 24 hours, you likely want to go with the second choice.
Determine how you want to use cryptocurrency. There are some exchanges that prohibit or limit withdrawal of cryptocurrency from your account. This would be fine if you simply want to buy cryptocurrency as an investment. Think in terms of what you might have an interest in doing in the future, and give yourself room to expand as your comfort with crypto grows. Decide what types of cryptocurrency you want to buy. Compare fees at different exchanges. There are different types of fees charged by exchanges, and these can vary widely.
The most basic fee is a network or miner fee, which will also be the lowest typically only a few cents USD per transaction. This fee varies anywhere from 0. You may also be charged transactional fees by the exchange based on your trading volume. These fees range from 0. Look for a straightforward, intuitive interface that you can easily navigate.
Beginner-friendly exchanges include Coinbase, Bitit, Cex. Do some research off the website of the exchange itself to find unbiased articles and reviews. Read about the history of the exchange and its founders. You may have to dig deep to find negative stories that the exchange developers attempt to hide from search results so as not to dissuade potential customers. Beyond that, personal and financial information you transmit to the site should be encrypted.
Part 2. Gather materials for verification of your identity. Because of the level of security required, setting up an account at a cryptocurrency exchange is a little more involved than setting up your usual online account. Have basic identification and payment information handy, as well as keeping your mobile phone nearby and your email account open. Provide the requested personal information.
On the home page of the exchange, click on the button to sign up or create an account. You may also be asked to choose a username and password. Make sure your password is complicated and secure. Verify your email and set up 2FA. Once your information is received, the exchange will send an email to the address you provided. The exchange also will send a text message to your mobile phone with a code you must enter to access your account.
This process will occur every time you log on to your exchange account. Provided you enter your password correctly, the exchange will send a code to your phone. Because the verification links and codes are only valid for a brief period of time, it is recommended that you have your phone nearby and your email account open.
Upload a government-issued photo ID. To complete the registration process, some exchanges require you to scan both sides of a government-issued photo ID and upload the scanned images to the exchange. However, the total amounts of cryptocurrency you can purchase or hold will probably be limited. The exchange also may limit the number of trades you can make per day or week.
Take a selfie with a specified logo or written phrase. However, some exchanges may limit the size or volume of your trades until you complete this step. Some exchanges may send you a unique code that also must be written on the piece of paper. Part 3. Connect your method of payment. Depending on the method you choose, it could take 3 to 5 days for the connection to be completed.
If you have to wait for your method of payment to connect, watch the markets for a few days and look around the exchange to become more familiar with the interface and transaction process. Place your order. You could even lose your investment if you forget or lose the codes to access your account, as millions of dollars of Bitcoin already has been. If you purchase cryptocurrency through an exchange, you have more options:. 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 , the U. As with any investment, make sure you consider your investment goals and current financial situation before investing in cryptocurrency or individual companies that have a heavy stake in it. This means you should invest carefully and with caution. Kat Tretina is a freelance writer based in Orlando, FL. She specializes in helping people finance their education and manage debt. John Schmidt is the Assistant Assigning Editor for investing and retirement.
Before joining Forbes Advisor, John was a senior writer at Acorns and editor at market research group Corporate Insight. Select Region. United States. United Kingdom. Kat Tretina, John Schmidt. Contributor, Editor. Editorial Note: We earn a commission from partner links on Forbes Advisor. Choose a Broker or Crypto Exchange To buy cryptocurrency, first you need to pick a broker or a crypto exchange. What Is a Cryptocurrency Exchange? Learn More On Crypto.
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