How to buy and trade cryptocurrencies: A comprehensive guide

How to buy and trade cryptocurrencies

Are you increasingly getting interested in cryptocurrency and looking for easy ways to buy cryptocurrencies? Well, we have you covered as today’s guide on how to buy cryptocurrencies has everything you’re looking for and more.

Before we jump into the nitty-gritty of today’s post, we would like to mention that there are a few things we want you to keep in mind, such as what cryptocurrency you’d like to invest in and how you intend to pay for it, and which cryptocurrency exchange you should use. Let’s jump right in, shall we?

Choosing a broker or exchange

If you’re interested in buying cryptocurrency, you’ll need to choose a platform from which you’ll be buying cryptocurrency. To make things easy for you, you can either opt for a traditional broker or choose a dedicated broker, which we will be emphasizing on as we delve further into this guide.

Traditional brokers: Many online brokers today provide crypto enthusiasts with the option to buy their favorite digital currencies in addition to offering other financial instruments like ETFs, stocks, and bonds. While traditional brokers are renowned for offering low trading fees, they have limited crypto features, which you should be wary of. 

Cryptocurrency exchanges: When it comes to buying cryptocurrencies via exchanges, there are tons of exchanges out there you can choose from. But before you decide to opt for any exchange, it’s crucial to consider essential details like the type of cryptocurrencies, interest-bearing options, and wallet storage options supported by different exchanges. Also, keep in mind that many exchanges charge asset-based fees.

Buying cryptocurrency through an exchange

Bitcoin and other cryptocurrencies can’t be bought via your bank or investment firm as most banking institutions have yet to adopt a framework for digital currencies. More so, there are still a lot of regulatory issues regarding cryptocurrencies, so many banks and investment firms are still watching how things evolve. You’ll have to use an exchange if you’re interested in buying cryptocurrencies right now. Thankfully, there are hundreds of cryptocurrency exchanges you can use to buy cryptocurrencies.

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CFDs are complex instruments and involve a high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

While some of these exchanges have a brilliant selection of digital assets you can choose from, some have limited cryptocurrencies you can buy.

 Some leading cryptocurrency exchanges with impressive track records of offering quality services include Coinbase, Binance, Kraken, eToro, SoFi, and others. These exchanges make it easy for crypto enthusiasts to buy and sell cryptocurrencies.

That said, here are some things you want to consider when choosing an exchange:

Security

 While cryptocurrency investments come with many benefits, remember that cryptocurrency investment comes with many risks. More so, cryptocurrency investments are not currently backed by a central institution like the FDIC. What this means is that if the exchange you opt for is compromised or your account is breached, you may end up losing your investment, and we are sure you wouldn’t like that.

If you decide to invest in cryptocurrency and have decided to store your digital assets on wallets provided by an exchange, please ensure you go for an exchange with robust security architecture to protect your investment. To be on the safe side, we suggest you go for an exchange that uses offline and cold storage to safeguard users’ assets. Also, ensure you opt for an exchange with robust protection against theft. 

Regarding exchanges with robust security features, we highly recommend opting for Binance, Coinbase, and eToro, as they have impeccable security measures to protect crypto investors.

Fees

When choosing an exchange to buy cryptocurrency from, you want to pay special attention to the fees charged. Speaking of fees, it’s important to note that exchange fees can vary significantly. While some exchanges charge a flat fee upfront for their services, other exchanges charge traders in terms of the percentage of their trades. Also, while some exchange fees are based on price volatility, many exchanges charge based on transactions.

Even though fees should definitely be considered, professionals believe crypto enthusiasts get what they pay for, especially if they opt for top and more established exchanges like Binance and Coinbase. Here is what you should know- when an exchange provides more protection, better security, and access to more critical features, they may charge slightly higher fees.

While some exchanges charge based on spreads or margin, others charge a flat rate or percentage of total trade, which can vary based on payment methods, location, and more.

Exchanges with more structured trading features tend to use a fee model determined by price fluctuation. This is typically known as maker-taker fees. What this typically means is that if you buy at the current market price, the exchange will charge a taker fee. On the flip side, you can set your preferred price for buying a digital asset. Once the market reaches your preferred buying price and activates, you’ll be charged a maker fee.

Before choosing an exchange, please ensure you go through the respective fee charged. This way, you know exactly what you’re being charged. While most exchanges will typically provide a comprehensive breakdown of fee structure when you buy a digital asset, it’s important to factor this in beforehand, so you don’t end up paying more than you intended.

Support cryptocurrencies

Not all exchanges support all the cryptocurrencies available out there. That said, most crypto exchanges support popular cryptocurrencies like Ethereum, Bitcoin, XRP, and more. Also, keep in mind that some niche altcoins can only be traded on specific exchanges.

If you’re interested in an exchange that supports a wide array of digital assets, it’s best to stick with mainstream exchanges like Binance, Coinbase, eToro, Kraken, and SoFi.

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Top exchanges to buy cryptocurrency from

 We have put together a short overview of the best exchanges to buy cryptocurrency from to simplify your job. Let’s dive in, shall we?

Binance

Binance is the most reliable exchange to buy cryptocurrency from. They have a wide array of cryptocurrencies you can start buying and charge one of the lowest fees we have come across in the crypto space. In addition to supporting tons of digital assets, Binance has robust security features to safeguard users’ investments.

Compared to other exchanges, Binance has a significant presence globally, making it possible for crypto enthusiasts around the globe to invest in cryptocurrency. While very few crypto exchanges, including the likes of Coinbase, have a license to operate in the US, Binance has a U.S.-based subsidiary designed to offer its services to crypto enthusiasts in the U.S.

Coinbase

Another exchange that has been doing pretty well since it kicked off operation several years ago is Coinbase. Like Binance, Coinbase supports many cryptocurrencies, including top digital assets like Bitcoin and Ethereum. And yes, the exchange is licensed to operate in the U.S., where only very few crypto exchanges operate because of regulatory restrictions.

What we like most about Coinbase in addition to the wide array of available assets on the platform, are the low fees they charge for crypto activities. While their fees may not be as low as what you get with  Binance, it is pretty much within the industry average.

For crypto enthusiasts in the U.S. looking for an exchange where they can start trading cryptocurrencies right away, you’re welcome to check out eToro.

eToro

eToro has an enviable track record in the crypto space. Since sojourning into cryptocurrency, eToro has become a go-to exchange for people who want to invest in cryptocurrency. Like Binance and Coinbase, eToro has a decent selection of cryptocurrencies you can invest in right away. Besides supporting leading cryptocurrencies like Bitcoin and Ethereum, traders can also invest in popular altcoins like Cardano, XRP, SOL, and others,

What’s unique about eToro is the competitive trading fees they charge. Although their fees aren’t as low as what you get with Binance, we love that they keep their fees low enough for investors not to worry.

Additionally, they have a robust security architecture to protect users’ assets and have a hassle-free registration process. More so, they are regulated by top-tier financial bodies.

Let us also quickly add that eToro also allows investors to trade stocks, CFDs, indices, and more besides offering crypto services.

If you’re looking for a low-risk exchange that supports a variety of digital assets and makes it seamless to buy cryptocurrencies, you’ll love eToro for its unique propositions.

 

Exchange Features
Binance Binance has a global presence and supports over 80 cryptocurrencies. They also support margin and futures trading. With the inception of DeFi, Binance now supports staking in addition to charging lower fees.
Coinbase Coinbase supports over 50 cryptocurrencies you can start trading right away. They have also launched DeFi services and now offer staking to their users. They are licensed to operate in the U.S., making them an obvious choice for traders in this location.
eToro When it comes to supported cryptocurrencies, eToro trails the likes of Binance and Coinbase as they only support a handful of digital assets. They are licensed to operate in the U.S., making them highly recommended for crypto enthusiasts in this location. And yes, they charge a minimal trading fee.

 

Buying crypto using crypto trading bots

Time they say waits for nobody, and this is even more true in the crypto space, especially because of the insane volatility that comes with crypto trading. This is why many traders opt for a carefully calibrated, safe, and reliable trading strategy to trade the financial markets.

Unlike traditional stock markets, where everything stops on Friday and resumes on Monday, in the crypto space, the market works non-stop. This makes it almost impossible for traders to keep track of market fluctuations, diversify their risks, reduce errors and remain disciplined 24 hours, seven days a week. But with the help of crypto trading bots, traders now have a solution to these lapses. Read on as we take a deeper dive. 

What is a crypto trading bot?

A crypto robot or bot is an automated software powered by sophisticated algorithms and Artificial Intelligence. When deployed for trading cryptocurrencies, crypto bots are able to analyze the market twice faster than humans. This means it can easily spot profitable trading opportunities before manual traders pick them up. 

The cool thing about auto trading bots is their insane success rate, as we have seen some leading crypto trading bots like CoinRule, 3Commas and CryptoHero deliver impeccable success rates.

With crypto trading bots, you don’t have to beat yourself about missed trades or missed opportunities as it is always ahead of the market.

Whether you want to buy undervalued digital assets or add new crypto coins to your portfolio, crypto bots will help you automatically buy and sell assets timely. And yes, it works automatically, meaning you won’t have to spend hours analyzing the market and looking for profitable opportunities.

We know that the thought of using crypto trading bots is already appealing, but hey, you need to be careful when choosing a crypto trading bot, and that’s because all bots are not created equal. And the reality is that the vast majority of crypto bots on the market are designed by anonymous bot creators who aren’t particularly interested in the performance of their bots but only looking to sell their generic bots to as many users as possible.

But because we want you to only get the best, we would make some recommendations of crypto bots to use. So make sure to stick around and read to the end.

How Do Crypto Trading Bots Work?

Are you wondering how crypto bots work? Well, read on as we will get to that shortly. While using trading bots to trade on an exchange, you can grant access and withdraw it anytime. To use crypto bots on an exchange of your choice, you’ll need to authorize the bot to access your account using API keys. For those new to using crypto trading bots, it would interest you to know that API simply means Application Program interface.

Now let’s get into the exciting part. By deploying a trading bot on an exchange, it should seamlessly analyze the market, spot profitable opportunities, and execute the trades on your behalf. What’s even more exciting about trading bots is that it delivers exceptional speed and efficiency. More so, three is little to no margin for error. And, of course, it doesn’t trade with emotion, which is an incredible benefit, especially when you compare it with manual trading.

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A reliable trading bot will help you reach your investment goals faster than when you’re trading manually.

To put things simply, here is a simple breakdown of how a crypto trading bot works:

Data analysis: If you have been trading for a while, you’ll agree that data is king. Unlike humans, machine learning-powered programs are able to identify, gather and analyze an insane amount of data quicker and more efficiently. This is why data analysis is critical to the success of a crypto trading bot. 

Signal generation: Once a crypto trading bot analyzes the available data, it scans the market for profitable signals traders can benefit from. Compared to manual trading, where analysis will take several hours, a crypto trading bot can generate profitable signals within minutes based on market data.

Risk allocation: Because trading bots are designed to make your life easy, they also help with risk allocations according to preset parameters put in place by the trader. In terms of risk allocation, the bot is able to determine how and what extent of capital is to be allocated to a trade.

Execution: Once everything aligns, the next thing is for the bot to execute the trade, whether buy or sell positions. Remember that the entire process works according to a trader’s set parameters.

Top trading bots for buying and selling cryptocurrencies

As we promised, we will provide you with some recommendations regarding crypto trading bots you can use across different exchanges. Let’s jump right into our recommendations. 

Coinrule

Coinrule is one of the leading automated crypto trading bots on the market currently. The bot was launched in 2018 and became an instant sensation because of its incredible success rate. What’s unique about Coinrule is that it caters to both newbies and experienced crypto traders.

The U.K. trading bot platform works 24/7 and is powered by sophisticated algorithms and artificial intelligence design to allow traders to maximize the profits they make from trading digital assets. 

Coinrule offers many tools, including 150+ trading templates traders can deploy to trade cryptocurrencies profitably. And whether you’re new to trading or have been trading for some time, Coinrule is going to give you an edge. 

Coinrule is super easy to use, so beginners would find it worth checking out. For traders who aren’t too sure about what trading strategy to use, you can choose from the trading templates provided by Coinrule. Coinrule provides easy “If/Then parameters, which make it easy to set up your preferred trading strategy.

That said, the number of rules, exchanges, templates, and trade volume you can access depends on your plan.

If you want to know exactly what Coinrule offers, you’re welcome to read our detailed review of this trading bot.

CryptoHero

Automated trading is generating a lot of buzz and making trading easy for both experienced and novice traders. But while there are many cryptocurrency trading bots on the market, CryptoHero has stood out from the competition, and that’s because of the insane success rate it delivers and, of course, the fact that it is easy to use. 

Since CryptoHero launched several years ago, it has become the go-to choice for traders looking for a bot that delivers on its promises. Added to its remarkable success rate, CryptoHero has a good reputation.

What’s exciting about CryptHero is the fact that you can connect it with leading crypto exchanges in the market, including Binance, Coinbase, Kraken, and Crypto.com. More so, it handles the entire trading process automatically, so you won’t need to spend hours analyzing and trading the market.

CryptoHero offers different subscription plans you can choose from. Read our in-depth CryptoHero review to learn everything you need to know about CryptoHero, including how to use it to buy cryptocurrency across different exchanges.

Investing in crypto without owning it

Have you thought about investing in cryptocurrency but don’t want to own it? Well, we have you covered as we have found a few ways you can invest in Bitcoin and other digital assets without ever owning one.

That said, while opting for this option wouldn’t completely shield you from the volatility that comes with cryptocurrency trading, we like that it can give you some protection from losses. Now that we have established some background, let’s jump right into how you can invest in cryptocurrencies without owning them.

Invest in companies that hold bitcoin or another cryptocurrency

One brilliant way to invest in bitcoin and other digital assets without owning or holding them in a wallet is to invest in the stocks of companies that provide crypto-related services or hold some cryptocurrencies.

This includes a wide range of publicly traded companies that offer services that includes storing or paying with cryptocurrencies. You can also invest in companies that have added cryptocurrencies to their balance sheet.

For instance, Tesla and MicroStrategy have directly invested in Bitcoin in the past. Two years ago, Tesla reportedly bought $1.5 billion worth of Bitcoin, adding that it would begin receiving digital currency as a means of payment for its services. Similarly, Micro strategy, a leading software firm, announced that it would sell $600 million in convertible debt, investing the money realized to buy Bitcoin.

So, investing in Tesla stocks or MicroStrategy shares would mean indirectly investing in Bitcoin and other digital assets without owning them. Makes sense, right? We thought so too.

Consider companies with technology that relates to Bitcoin or blockchain

Another brilliant way to invest in cryptocurrency without owning one is to invest in companies, especially publicly traded companies with bitcoin or blockchain technology.

Some companies you want to consider include Paypal or Square, which have integrated blockchain technology that allows users to trade cryptocurrency on their platforms. Also, companies like Galaxy Digital and Riot Blockchain offer exclusive services that focus on cryptocurrency and the underlying technology.

At this point, we would also like to add that top brands like Amazon, IBM, Google, Microsoft, and SAP use blockchain technology in different areas of their business. What this simply means is that investing in any of these companies’ shares will provide some crypto exposure without actually investing in it.

CFD crypto trading

One of the popular ways of investing in cryptocurrency without owning or holding it is through crypto CFD trading, and yes, there are a dozen of CFD platforms that allow traders to invest in crypto CFD trading. But before we give you all the details, let’s bring you up to speed on what CFD trading means.

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 CFD, also known as Contract for Difference trading, is a unique trading option that allows traders to trade and invest in an asset by simply engaging in a contract with a broker instead of directly opening a position for an asset in a market.

 CFD trading is basically a contract where a trader and a broker agree to replicate market conditions and settle the difference among themselves when the trade position closes. CFD trading has a lot of benefits you won’t get with direct trading.

 With CFD trading, you can invest in a cryptocurrency without holding it in your wallet. Also, CFD trading grants traders access to overseas markets, leveraged trading, and short (SELL) positions for instruments that typically do not offer that option.

CFD crypto brokers

Are you ready to start investing in cryptocurrency without owning it? Well, now is an excellent time to give CFD trading a try. And to make things easy for you, we have put together a list of top brokers that support crypto CFD trading. Here, check them out:

 eToro

eToro is one of the leading CFD crypto brokers out there. So in case you’re interested in a broker that supports CFD trading, you won’t be disappointed to check out eToro. And just so you know, we have a comprehensive review of eToro on our website. Hit this link to learn everything there is to know about eToro, particularly their CFD trading services.

AvaTrade

Cryptocurrencies indeed carry inherent value. This has made them legitimate financial instruments that can be bought and sold for profit. While most people who invest in cryptocurrencies typically use exchanges and own a wallet where they store their cryptocurrencies, many brokers, including Avatrade, allow traders to trade cryptocurrencies via CFDs without needing to own the cryptocurrency.

With Avatrade CFD trading, you don’t own the underlying cryptocurrencies; instead, you simply speculate on the price changes. Assuming you place a buy order, you make a profit when your position edges higher. And on the flip side, you make a loss if your position edges lower. 

Follow this link to read our comprehensive review of AvaTrade.

Fortrade

Another brilliant broker that supports CFD trading is Fortrade. This makes the broker a go-to platform for traders looking to invest in cryptocurrencies without owning or holding the digital asset in their wallets. What’s particularly thrilling about a platform like Fortrade is the low trading fees they charge for CFD trading.

If you’re out for a low-risk crypto CFD broker that allows you to trade various crypto tokens without having to own them, you won’t go wrong to give Fortrade a try.

And yes, we have an in-depth review of this broker on our website. Follow this link to read everything there is to know about Fortrade.

Admiral Markets

Do you want to benefit from fluctuating cryptocurrency prices without owning the asset in your wallet? Well, Admiral Markets have you covered. They provide crypto CFD trading services for people who want to invest in digital assets but don’t want to own them.

And like many brokers out there, we like that Admiral Markets charge a competitive trading fee.

Ready to start your crypto CFD trading journey? Well, why not check out Admiral Markets to see what they offer in terms of CFD trading.

Crypto CFD trading bot

Are you looking for a smart way to trade crypto CFDs profitably? Well, now is an excellent time to give crypto CFD trading robots a try. By deploying a crypto CFD trading bot, you’re improving your chances of success as these bots analyze the crypto markets better than humans.

The cool thing about crypto trading robots is that they offer a better success rate than when trading the markets manually. More so, crypto CFD trading bots are designed to work automatically, so you won’t spend tons of hours analyzing the market.

While using crypto CFD trading bots offer a lot of promises, especially for people just starting; we would like to add that you should take your time to choose a broker and robot that delivers exactly as promised.

Although there are tons of CFD crypto trading bots out there you can leverage to trade cryptocurrencies, our personal favorite is Bitcoin Mastery, and that’s because of the unique proposition it offers. In addition to using this bot to trade Bitcoin, you can also use it to trade other digital assets.

What we love most about Bitcoin Mastery is its incredible success rate. Unlike many crypto CFD trading robots, Bitcoin Mastery delivers up to a 98% success rate, an insane feat that other bots can only dream of.

 And good enough, this bot can be easily integrated with top CFD crypto brokers like eToro and Fortrade.

Is crypto a good investment?

Cryptocurrencies offer many advantages you won’t enjoy with other financial instruments. For starters, you can trade cryptocurrencies 24/7. This makes them the go-to option for traders who want to trade assets that aren’t impacted by time limits. With traditional stocks, you would have to wait for the market to open before you can start trading.

Also, cryptocurrencies attract a lot of volatility, which offers an opportunity for traders to make a lot of money, especially if a trade goes their way.

Unfortunately, volatility is what makes digital assets a speculative investment. So while you can make insane profits, you’ll also incur significant losses if trades don’t play out as you predicted. Even passive crypto investments such as staking aren’t immune to losses. So make sure you do your due diligence before trading crypto CFDs.

We would also like to add that many exchanges have a geographic location. So before signing up on a broker that supports CFD trading, ensure you do thorough research to know whether their services are available in your location.

In a nutshell

There are many brilliant ways to invest in cryptocurrencies, and this post has covered that in detail. If you have read to this point, we are sure you know all of the easy ways you can trade cryptocurrencies. Besides buying cryptocurrency directly from a crypto exchange, you can even trade digital assets without owning one in your wallet.

But before you start investing in digital currencies, we always recommend you familiarize yourself with digital assets and how it works. While trading digital assets can make you rich, it can also bankrupt you. So ensure you do your homework before you jump in.

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