Your “Three-Step” Crypto Buying Guide
Ready to buy some cryptocurrencies? Follow these simple steps…
Step 1: Amass Some “Reserve Currency”
You should think of bitcoin as the “reserve currency” of the crypto world.
Virtually all cryptocurrencies are priced in bitcoin. So you will need bitcoin in order to buy smaller exchange-traded coins and ICOs.
If you need to make an initial purchase of bitcoin, I recommend going through Coinbase, Gemini or Kraken.
Their interfaces vary, but each of these exchanges helps you accomplish the same goal: buy bitcoin with fiat currency (or “real money”) like U.S. dollars. All you’ll need to do is link a bank account, debit card or credit card.
Of these options, I prefer Coinbase first (please review my instructions for opening a Coinbase account) and Gemini. However, you can also use Kraken if new account creation is not possible on the others.
If you live outside the U.S., you’ll need to research local exchanges that operate in your country of residence. You can do so by googling “[your country] bitcoin exchange.”
Step 2: Set Up a Wallet
Cryptocurrencies are stored in a digital wallets.
Some exchanges (like Coinbase, Gemini and Kraken) provide you with a free wallet when you set up an account. These wallets, provided by the exchanges, are a secure and convenient way to store your bitcoin.
However, as you build out the altcoin segment of your crypto portfolio, you’ll need several different wallets to support the small exchange-traded coins that I recommend. There’s no “one size fits all” wallet… as not all wallets support all cryptocurrencies.
So when I issue a new altcoin recommendation, I will generally provide a recommended wallet for that specific coin.
If you’re interested in taking additional security precautions, you might also consider a “hardware” wallet. These devices often look like USB thumb drives or keychains, and they’re a good option to consider if you’re looking for extra security or if you’re holding large amounts of coins. (I recommend the Ledger Nano or Trezor device.)
Step 3: Get Ready for Smaller Coins!
Once you have bitcoin in your Coinbase wallet, you’ll be one step closer to investing in the smaller exchange-traded coins and ICOs we’ll target in Crypto Asset Strategies.
We’ll do our best to recommend coins that are listed on Coinbase and other major exchanges. But keep in mind that some of the smaller coins that we’re after don’t trade on Coinbase, so you will have to (eventually) create accounts on a few trusted altcoin exchanges.
The list of exchanges we’ll use for altcoin purchases is growing (and will continue to grow) because there’s no “one size fits all” exchange that offers every coin we may wish to buy. With every recommendation, we’ll let you know where you can buy the coin.
These will be solid, secure exchanges that we’ve vetted. However, one or more of them may have restrictions in place pausing the creation of new accounts. If you find that this is the case, remain patient and continue trying. There may not be an “official” communication when the restrictions are resolved.
You will have to transfer bitcoin from your main (likely Coinbase) account to the altcoin exchanges to buy some of the smaller coins.
Please be aware that upon setting up an account on the altcoin exchanges, you’ll likely be required to verify your identity by submitting photocopies of a vital document (state ID, driver’s license or U.S. passport) and/or an unobstructed image of your face. Shortly thereafter, you’ll receive confirmation that the verification process has been completed.