To invest in cryptocurrencies, you must know the resources you need to prepare to make your foray into investing by focusing on Bitcoin. You must have a secure internet connection and an account with a cryptocurrency exchange along with a personal secured digital wallet beyond the exchange account. If you are using a Know Your Customer (KYC) platform, then you must have your identification documents ready at hand. Moreover, you must link your wallet with valid payment methods like bank accounts, credit cards, and debit cards.
Having all things lined up, you are now ready to take the following steps that pave the way for realizing your dream about buying Bitcoin.
Select a cryptocurrency exchange
To hold/buy and sell cryptocurrencies, you must open an account with a cryptocurrency exchange. Choose an exchange that allows its users to withdraw crypto and keep it in their wallet outside the exchange for safety. However, if you trade in cryptocurrency regularly, this aspect becomes inconsequential.
Among many types of cryptocurrency exchanges, some allow customers to operate anonymously without requiring sharing personal information. Although these exchanges might be vulnerable to nefarious activities, it provides services to those without bank accounts like it can happen with refugees or to people from countries with inadequate banking infrastructure.
However, some of the most popular exchanges like Gemini, Kraken, and Coinbase of the US require KYC says Eric Dalius Bitcoin
Link your exchange account to a payment option
After selecting the exchange, keep your documents like social security number, driver’s license, information about your source of fund, and your photograph ready at hand. The information that the exchange might need depends on the state laws and the region you live in. If you have earlier set up a brokerage account, you will find the process similar. Once the exchange accepts your identity, connect your account to a payment option. It can be your bank account, credit card, or debit card. Better avoid using your credit card for buying cryptocurrencies due to their high volatility. Banks are still skeptical about cryptocurrencies and might try to stall your efforts to use the bank account for making payments to crypto exchanges. Know about the fees that the exchanges charge for making deposits by using different kinds of payment methods.
Place an order
Having gone through the above steps, you are ready to place an order. Crypto exchanges offer many options for investing by offering several types of orders. For more customer flexibility, almost all exchanges offer limit and market orders, and some exchanges offer stop-loss orders. Kraken offers most order types.
Use your digital wallet for storing your digital assets like Bitcoin and other cryptocurrencies in the safest way. Using your personal wallet outside the exchange, you have complete control over the private keys for accessing your funds. Your personal wallet is safer than the wallet of the exchange, which is often the target of hackers, says Eric Dalius Bitcoin.
Storing your cryptocurrencies in your personal wallet keeps it safe by minimizing the chances of theft.