4 easy steps to buy cryptocurrency

  1. Choose a cryptocurrency exchange 

If you're interested in buying and selling cryptocurrency, the first step is choosing a platform to do so. Generally, you can choose from a traditional broker or a dedicated cryptocurrency exchange.

• Cryptocurrency exchanges: You'll have many cryptocurrency exchanges to choose from, each with varying offerings of cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.

As you're comparing different platforms, it's wise to consider things like supported cryptocurrencies, security features, fees, storage and withdrawal options, and educational resources.

Cryptocurrency exchanges

A crypto exchange is a platform dedicated to facilitating the trading of cryptocurrency. Each exchange has its own rules when it comes to the buying, selling, and trading of cryptocurrency. 

The best exchange for you depends on your needs, but beginners should look for exchanges that offer simple web and mobile interfaces, educational resources, and readily available customer support.

Depending on the crypto exchange, you can trade one cryptocurrency for another, or exchange fiat money (like the US Dollar) for cryptocurrency, or vice versa. Prices are based on daily market rates. 

Quick tip: With crypto also comes stablecoins. Stablecoins are backed by fiat currencies like the US Dollar to stabilize their value (if it's backed by dollars, you can usually redeem one stablecoin for $1).

It should be noted that not every exchange offers every cryptocurrency. But here are several exchanges and brokerages that do:

You'll also have multiple other options to choose from when it comes to buying crypto. In the past year, payment services like PayPal, Cash App, and Venmo all expanded their accepted payment options, allowing you to buy, sell, or hold cryptocurrencies like bitcoin.

2. Fund your account

After you've chosen a crypto exchange, you'll need to fund your account to begin trading. "Although it differs by platform, most crypto exchanges allow users to purchase crypto using fiat currencies such as the US Dollar or the Euro using their debit or credit cards,"

Another option platforms typically accept is ACH transfers and wire transfers, but the accepted payment methods and time it takes for deposits or withdrawals differs per platform (and not all exchanges accept credit cards).

Plus, the time it takes for deposits to settle varies for different payment methods. For instance, ACH transfers at Coinbase take three-to-five business days. However, debit card transfers are instant, but wire transfers can take one-to-three days.

3. Place an order

You can usually place an order with the click of a button on your exchange's web or mobile platform. If you're planning to buy cryptocurrencies, you can do so by selecting "buy," choosing the order type, entering the amount of cryptocurrencies you'd like to purchase, and confirming the order. The same process applies to "sell" orders.

4. Select a storage method for your assets

A crypto wallet is a physical device or online software used to securely store the private keys to your cryptocurrencies. Some exchanges offer built-in wallet services, making it easy for you to store directly though the platform. But not all exchanges automatically provide wallet services for you.

Quick tip: If your exchange doesn't offer a wallet, you may need to set up one with a personal wallet service. There are several different types of providers that may charge fees depending on whether it's a hot or cold wallet. For example, cold wallets always generally charge fees, while hot wallets generally don't.

There are quite a few wallet providers to choose from, where you'll have the choice between two custody options:

The bottom line

You'll have a number of options — such as crypto exchanges, online brokerages, and even payment services — when it comes to buying and selling cryptocurrencies. And in most cases, you can fund your account with credit or debit card deposits, ACH transfers, or wire transfers (though many exchanges also accept crypto deposits). 

But it's important to choose the right place to buy your crypto. From crypto exchanges like Coinbase or Gemini, the list of avenues for purchasing crypto is vast.