Are you interested in buying cryptocurrencies, but don’t know where to start? You can be forgiven as there are many different methods to buy cryptocurrencies, so it is sometimes really hard to find the best option for your needs.
There are many things you need to look out for before you decide to enter the world of cryptocurrencies. In particular, you need to take appropriate safety measures. Some people get scared off at this point because it all seems too complex and risky. On the one hand, such fears are justified, but on the other hand, everyone can take care of their safety in a relatively simple way.
In this article, we will give you a detailed explanation of all the different methods for buying and selling cryptocurrencies.
TABLE OF CONTENTS
- Buy cryptocurrencies
- Selling cryptocurrencies
- Conclusion: advantages and disadvantages of different buying and selling methods
In the last few years, the process of buying and selling cryptocurrencies has become so simple that everyone can do it. However, before you buy cryptocurrencies, you need to consider some of the important factors that we will briefly explore in the following chapters.
Tip before you start
You have to be aware that prices of cryptocurrencies can be very volatile (unstable), so you should never invest more than you can afford to lose.
Accessibility and locality
Is the service available in your country and in your language? Most of the online exchanges are only in English, and none of them have support for all countries.
The most common and reliable forms of payment for the purchase of cryptocurrencies are credit cards, bank transfers, and even cash. Different websites accept different payment methods, so you will need to choose a service that accepts your preferred payment method.
Different types of cryptocurrencies
There are thousands of different cryptocurrencies (and this number grows every day), so it’s logical that you can’t buy them all in one place. You will need to find a crypto exchange that offers the purchase of the cryptocurrencies that you are looking for. In addition, you have to consider different payment methods.
There are services that offer an exchange between different cryptocurrencies (this is called a crypto-to-crypto exchange), while others offer an exchange between cryptocurrencies and fiat money (this is called a crypto-to-fiat exchange, or a fiat gateway). Kriptomat belongs to the latter category.
Different methods of buying and selling have different trading fees. Keep in mind, however, that crypto-trading services have lower fees in comparison to crypto exchange services. Why?
Different types of exchanges are designed for different needs, and they do business according to different principles. As a general rule, remember that trading services are usually more complex and not friendly to beginners, while the exchanges are usually more user-friendly.
A digital wallet is used to store access to your cryptocurrencies. From a user’s perspective, we could make a loose comparison with a bank account. You will essentially store your cryptocurrencies in the same way as you store traditional currencies (e.g., euros or dollars) on your bank account.
However, you must understand that a crypto wallet doesn’t physically store your cryptocurrencies in the form of a digital file. It merely protects the data about your balance (or available funds) with a pair of cryptographic keys (public key and private key).
This is a simplified explanation, and for a more detailed description, read our article on the crypto wallets.
There are many easy-to-use crypto wallets, but it’s important that you are careful. Cryptocurrencies are, by their very nature, extremely safe, but nobody will be able to help you in case of theft due to decentralization.
The wallet you need depends on the cryptocurrency that you want to buy. If you want to store Bitcoin, then you will, of course, need a Bitcoin-compatible wallet. The same applies to other types of cryptocurrencies.
Fortunately, there are many wallets that support several types of cryptocurrencies.
The crypto wallets are divided into two basic categories:
- Hot wallets – connected to the internet,
- Cold wallets – not connected to the internet,
and four indicative subcategories:
- Hardware wallets – public and private keys are stored on a separate hardware device and written in the digital form. Access is locked with a password (at the very least).
- Paper wallets – public and private keys are written on paper (they can also be written on another, more durable material).
- Online wallets (including mobile) – private keys are owned by the wallet provider (in some cases).
- Software wallets – public and private keys are stored on a computer program and written in the digital form. Access is locked with a password (at the very least).
Each of the listed wallets has its strengths and potential weaknesses. Cold wallets are generally considered to be much safer and are recommended for storing large quantities of your digital assets. Hot wallets are more suitable for frequent access to your assets.
It’s a good practice to use cold wallets for long-term storage, and hot wallets for regular use and trading.
As mentioned, you have quite a few options to buy cryptocurrencies. The two most convenient methods for beginners are certainly buying via an online exchange or buying via Bitcoin ATMs. We will look at the two ways in more detail to help you determine what suits you best.
We will explain the buying process by using Kriptomat as an example. You can also use a mobile app that can be downloaded on Google Play for Android devices and also on the App Store for Apple iOS devices.
Buy cryptocurrency: Credit card
Let’s look at the procedure for opening a user account on Kriptomat and the procedure for purchasing cryptocurrencies with a credit card.
How to buy cryptocurrencies with a credit card:
- Go to Kriptomat and click on one of the registration buttons.
- You will be redirected to the registration screen where you will need to input the following information.
- Enter your real name and last name.
- Enter an email address that actually exists.
- Create a strong password that you don’t use anywhere else.
- Solve the Captcha to confirm that you are not a robot.
- Click the Create account button.
- Sign in to your email because you will receive an email message from Kriptomat. It will contain a confirmation link. Click on this link to prove that you actually have access to this email.
- After clicking on the link, you will be redirected to a page where you have to enter and verify your phone number. This is an additional security step to prove ownership of your user account.
- After entering the number, go to the next step where you will need to enter the six digit code that was sent to your phone number via SMS.
- The identity verification is the last step before using the platform. You will need to upload an image of a personal document (Kriptomat accepts an ID card and a Passport from the list of supported countries) and a “selfie” where you hold the selected personal document in your hand.
- Go to the “Buy/Sell” section and select your coin in the list of cryptocurrencies.
- Select the credit card payment method. You can enter the euro amount you want to spend or the crypto amount that you want to buy. Then click the “Buy crypto” button.
- Confirm the transaction and enter your credit card information. When you are sure that all the information is correct, click the purchase button.
Check out our video guide for a better understanding of the process!
Buy cryptocurrency: Bank deposit (online exchange)
You can also purchase cryptocurrencies in a more traditional way, namely by making a SEPA deposit directly to Kriptomat. SEPA represents the Single Euro Payments Area. You have lower commissions and higher limits in comparison to purchasing with a credit card, although the process is not instant.
The process of transferring money from a personal bank account usually takes about one day, but in principle, SEPA payments can take up to three business days.
In the instructions below, we consider that you already have euro funds on Kriptomat. If you don’t, then you need to link your bank account and make a SEPA deposit.
The procedure for adding a bank account and getting deposit instructions is shown in the following video guide.
How to buy cryptocurrencies (if you already have a linked bank account):
- Sign in to your Kriptomat account and go to the “Buy/Sell” section.
- Select your coin in the list of cryptocurrencies.
- Select Euro as a payment method and enter the amount you would like to spend on your purchase.
- Click the “Buy crypto” button.
- You will be redirected to a page where you can review the transaction and complete the verification.
You will soon receive the cryptocurrency to your Kriptomat wallet! The process usually takes a maximum of a few minutes.
Buy cryptocurrency: Bitcoin ATM
You can also buy cryptocurrencies on a Bitcoin ATM. It is a great choice if you wish to buy cryptocurrencies instantly and in a more anonymous manner. You can use the Bitcoin ATM to buy Bitcoin directly with cash or with a credit card.
Most Bitcoin ATMs operate on the same standardized procedure (just like any other regular ATM), so you shouldn’t have any issues if you simply follow the generalized instructions below. We will be buying Bitcoin in our example.
How to buy cryptocurrencies on a Bitcoin ATM
- Approach the Bitcoin ATM and choose the option to buy.
- Enter how much Bitcoin you would like to buy. Some ATMs also give you the option to choose between different preselected buying amounts. The easiest way is if you choose the option with the lowest amount (usually up to around 2,000 EUR) in order to avoid an additional step that involves identity verification*.
- In the next step, you will need to enter a Bitcoin wallet address to which you want to receive the purchased Bitcoins. Each ATM has a QR code scanner, so it’s best if you simply use your mobile phone and prepare the QR code of your digital wallet address**.
- After entering (or scanning) your Bitcoin wallet address, you will need to insert cash or make a credit card payment.
- Click “Buy Bitcoin“.
- Print the receipt confirming your purchase.
Take a look at the following video to see the process in action.
So now that you know how to buy cryptocurrency, we can focus on how to sell cryptocurrencies. In principle, both procedures are very similar.
Sell cryptocurrency: Bank cashout (online exchange)
The procedure for selling cryptocurrencies through a web exchange is described below. It basically consists of two steps. In the first step, we make the exchange from the crypt into the euro, then we make a euro payment to an associated bank account.
Step one (SELLING):
- Sign in to your Kriptomat account and go to the “Buy/Sell” section.
- Select the “Sell” tab.
- Select your coin from a drop-down list of cryptocurrencies.
- Enter the amount you want to sell. You can enter it either in euros or in crypto. If you enter a euro amount, then the system will automatically calculate how much crypto you will sell. If you enter a crypto amount, then the system will automatically calculate how many euros you will receive.
- Click the “Sell crypto” button.
- You will be redirected to a page where you can review and confirm the transaction.
- You will soon receive euros to your Kriptomat user account! In most cases, the process takes a maximum of a few minutes.
Check out our video guide for a better understanding of the process.
Step two (CASHOUT):
At Kriptomat, you can sell all your cryptocurrencies directly to euro – even the ERC20 tokens that are available elsewhere only in pair with Ethereum (ETH). This means that you don’t need to make double exchanges from token to ETH, and then from ETH to euro.
The video tutorial below shows the procedure of withdrawing cryptocurrencies to your bank account.
Sell cryptocurrency: Bitcoin ATM
The process of selling cryptocurrencies on a Bitcoin ATM is slightly different than the buying process. The main difference is that it can take a little longer since you must first send cryptocurrencies to a specific address and receive a confirmation that you actually sent Bitcoin. Also, note that only 39.6% of ATMs support sales in addition to purchase.
- Select a cryptocurrency
Find the nearest Bitcoin ATM. If it supports more than one cryptocurrency, you will first need to select the one you wish to cashout/withdraw. We will choose Bitcoin (BTC).
- Choose a transaction method
If the ATM supports buying and selling (some of them support only one or the other as displayed on the pie-chart above), you will have to select the option to “Sell Bitcoin“.
- Enter the withdrawal amount
Enter how much Bitcoin you would like to sell. As with buying, some ATMs also give you the option to choose between different preselected selling amounts. The easiest way is if you choose the option with the lowest amount (usually up to around 2,000 EUR) in order to avoid an additional step that involves identity verification.
In any case, we don’t really recommend using Bitcoin ATMs for higher amounts as you will be spending too much on fees.
- Getting a receipt
Once you enter the withdrawal amount, you will be able to request an SMS message that will notify you of the transaction process. We advise you to select this option and enter your phone number. The Bitcoin ATM will then print a receipt with a Bitcoin wallet address.
You will need to send Bitcoin from your wallet to this address. You can also send it from Kriptomat.
The recipient will be the Bitcoin ATM vendor, and their Bitcoin wallet address will be presented in text format and in the form of a QR code. Once they receive your Bitcoin, you will be able to make a cash withdrawal.
Conclusion: advantages and disadvantages of different buying and selling methods
ATMs are currently still a slightly less convenient method since you need to find the physical location of the nearest machine, which is not necessarily an easy task, depending on your current whereabouts. The buying process is quite fast, but it can be confusing, and fees are extremely high (between 5 and 10%). The main advantage of ATMs is certainly that you can use cash, and there is no need to verify your identity for smaller amounts.
Online exchanges are fairly easy to use, and they offer a much larger selection of cryptocurrencies and more payment methods. The registration process can take several minutes, and due to regulatory requirements, some exchanges also require identity verification. This means submitting relevant national documents to ensure the security of the service.
There are other ways to buy and sell cryptocurrencies, but they are usually a bit more complex, so we didn’t present them in this article because it is intended for beginners. If you have any questions, we will be happy to answer them in the comments below!
The text is informative and does not apply as a recommendation for an investment. It does not reflect the personal opinion of the website owner or service owner. Any investment or trading is risky, past returns are not a guarantee for future returns – only risk those assets that you will not miss in the event of a loss.