How to buy Cryptocurrency
You've read up on crypto, accepted the risk and met your other financial priorities but how do you actually buy crypto?
Cryptocurrency cannot be purchased through your bank or investing firm. Instead you'll have to go through a cryptocurrency trading platform to exchange your local currency into a digital one.
There are hundreds of cryptocurrency exchanges but we recommend the most popular ones such as Coinbase, Gemini and Kraken for newcomers.
Things to consider when choosing an exchange
Not all exchanges offer every single cryptocurrency. Some niche coins might only be available on certain exchanges
Cryptocurrency investments are not backed by a central institution like FSCS-insured bank accounts are. If your account is compromised, or the platform where you keep your coins is hacked, you could be at risk of losing your investment.
Exchange fees can vary greatly, and may be applied as a flat fee upfront or as a percentage of your trades. In addition, fees might be based on price volatility, and many are charged per transaction.
What happens next?
Depending on the exchange you choose, you may need to provide personal information. Once finished, you'll be able to connect your bank account or debit card to transfer money into an exchange account in order to place an order.
Typically, you can enter the amount you want want to spend in your usual currency and the exchange will buy at the current rate.
If you buy a fractional share of a coin, like bitcoin, whatever amount you put in will be reflected in the exchange as a percentage of a total bitcoin. For example, at the time of writing, bitcoin is valued at £31,000. If you invested £1000, you would own 3.22% of a coin.
Market orders and Limit orders
A market order means you purchase the cryptocurrency at that moment, for the current market price.
A limit order means you'll set a price you want to pay for the cryptocurrency. Once the token reaches that that point, it will automatically be purchased.