How To Buy Cryptocurrency: A Beginner Trading Guide Step-by-Step

Update December 18th, 2017:

Bittrex is currently closed to new user while they upgrade their systems.  In the interim, you can buy coins from Changelly with Credit/Debit or Bitcoin.  I’ll let everyone know when Bittrex is back up for new registration.  Happy trading!

How to buy cryptocurrency has to be one of the largest topics of online conversation in 2017 — I know I get asked about it all the time.  The fact of the matter is that with ever changing global policies, world leaders and shaky governments, decentralized currencies are needed now more than ever – s0 here is my cryptocurrency trading guide.

Cryptocurrency?  Will I turn into a robot?

Nope!  You’ve probably heard of Bitcoin, one of the original and certainly the most popular cryptocurrency.  It, along with Ethereum & Litecoin will open up the door for your crypto trading adventures.

Today, I’ll teach you how to buy Bitcoin, Ethereum & Litecoin — and in turn — give you the tools you need to be able to purchase any coin on the Bittrex marketplace.

1)  How to Buy Cryptocurrency (Bitcoin, Ethereum or Litecoin) on Coinbase

For those just getting into the hobby of buying and investing in cryptocurrency, I hands down recommend Coinbase.  Sign up for Coinbase here.  If you sign up through my link, we’ll both get $10 worth of Bitcoin for free.

coinbase-sign-up

Here, you will be able buy buy Bitcoin (BTC), Litecoin (LTC) & Ethereum (ETH).  Click the links to find out a little bit more about each coin/platform.

Once you’ve signed up, you may have to go through a couple steps for verification depending on your country of origin.  The verification steps are:

  • Approving a bank account/credit/debit
    • Coinbase will post two test transactions to your account for values ranging from $0.01 – $0.10.  All you have to do is log into your bank website and check what these values were & then confirm them on Coinbase.  Easy peasy.
  • Verifying Identity
    • In some cases, you may have to upload a picture of your photo ID

Once you’ve verified your identity and connected a payment method, you’re ready to buy cryptocurrency.  Click over to the Buy/Sell page any amount of the coin of your choice.  Note, for trading purposes I recommend BTC or ETH — as I’m not aware of any LTC markets.

Coinbase FAQ:

  • Does Coinbase support my country?
    • Coinbase supports the following:
      • USA
      • Australia
      • Canada
      • United Kingdom
      • Austria
      • ​​Belgium
      • Bulgaria
      • Croatia
      • Cyprus
      • Czech Republic
      • Denmark
      • Finland
      • Greece
      • Hungary
      • Ireland
      • Italy
      • Latvia
      • Liechtenstein
      • Malta
      • Monaco
      • Netherlands
      • Norway
      • Poland
      • Portugal
      • Romania
      • San Marino
      • Slovakia
      • Slovenia
      • Spain
      • Sweden
      • Switzerland
  • How long does it take to get my BTC/LTC/ETH?
    • For credit/debit transactions, instantly!  For bank transfers, up to 5 business days.
  • Bitcoin is expensive, do I have to buy a whole coin?
    • No!  You can buy small fractions of any coin.
  • What should I invest in?
    • Sorry, I do not give investment advice.  I advise you to research your investments carefully 🙂

2. Learn How to Transfer Cryptocurrency

Now what do I do with this robot money?

Great question!  Many of those who contact me through my chat window are hoping to enter the wider cryptocurrency markets or transfer their funds elsewhere.  So, now were going to learn how to transfer your coins from Coinbase.

  • Go to the Accounts tab
  • Select the Wallet from which you are going to send funds & click “Send”

  • Once you’ve entered the proper BTC/ETH/LTC wallet address, select the amount you wish to send and you’re good to go!

A few words to the wise.  You must make sure that you are sending BTC to BTC wallets, ETH to ETH wallets, and so on and so forth.  You will lose your assets attempting to send, for instance, Bitcoin to a NEO wallet.

The transaction normally takes up to an hour to be completed on both ends.

3. How To Trade Cryptocurrency on a Marketplace (Bittrex)

So now that you’ve got somewhat of a grip on Bitcoin, Ethereum & Litecoin, you may want to do some speculation and invest in lesser known coins (altcoins).  In order to do that, we’re going to have to use a marketplace or exchange.  For this example, we’ll be using Bittrex — my favorite exchange.

First, create an account on Bittrex.  The process isn’t too complex, but the dashboard can be a little intimidating.  Here’s a little breakdown of the pages:

  • Markets — Here you can see BTC & ETH markets where you can buy altcoins.
  • Individual Market — Here you can see the history of the exchange value of the market you wish to trade in.
  • Wallet —  Here you can see all of your balances & wallets.  Whenever you would like to trade on Bittrex, you’ll need to transfer some funds into a Bittrex wallet to trade with.

Here’s a breakdown of the process using Coinbase & Bittrex:

  1. Determine which asset you are going to trade with (I’ll choose Bitcoin for this demo)
  2. Generate a Bitcoin wallet address on Bittrex by clicking the ‘+’ button on Wallets page, BTC row.
  3. Copy the generated address from Bittrex
  4. On Coinbase, go through the send process described above & send funds to the address you have copied from Bittrex.
  5. Wait for the transaction to settle (Up to 1 hour)

Once you have a Bitcoin balance in Bittrex, you can use it to purchase any other coin on the Bittrex Bitcoin market.  This process can also be replicated with Etherium, using the Bittrex ETH market.

Now that you have funds in Bittrex, just go to whichever market you would like and look to the bottom right to find the buy tab (this image uses the ‘Antshares’ market for example):

Once you’ve found your price, click buy and wait for the magic to happen!  Shoot me a message if you are at all confused.

Additionally, here are some guides I have written on specific coins:

4. Store Your Coins in a Wallet

Lastly, once you’ve had your fill of trading, you may wish to keep your coins secure in a wallet.  For the most secure source, I would use a hardware wallet:

However, if you’re going to be holding altcoins, there are a few web application wallets that will hold different types.  My favorite:

Some coins can only be stored securely in their own wallets from the development team, so you’ll need to do some research on each coin you invest in.

5. Cryptocurrency Trading Strategy

Just like trading stocks, there are many strategies that people live by.  Many are great, many are.. um.. interesting.  However, there are three basic principles that I follow when investing in a cryptocurrency.

I. Strength of Technology

I feel like this one is the most important.  Besides Bitcoin itself, I look primarily at the technology or business behind the coin I am considering investing in.  Take NEO or Ethereum for example.  Both of these many people think to simply be just coins.  However, what they really are are byproducts of the platforms that they power.  The NEO and Ethereum networks are actually very comparable, offering entire platforms upon which to build decentralized applications.  They are in tern, creating a currency upon which their microcosmic economy runs.

However, the actual details of a coin’s purpose will vary from business to business.  You’ll more often than not find that a coin has been created for relatively arbitrary purposes.  There’s a lot of dummy stock in the blockchain buzzword, don’t be fooled.

Thus, this is my #1 priority.  Finding legitimacy in a coin’s value to it’s platform, tech stack, what-have-you, is the first box I’d tick.

II. Coin Supply

Take a look at the top 5 coins on CoinMarketCap.  One of these is not like the other.  Ripple is nearly $500 dollars less than the next highest coin.  Why is this?  Ripple is a legitimate institution?  They’ve seemingly got the right sector — banking?  Why $0.25 per coin?

Now, go a head and look at the circulating supply.  Yeah, there 38 Billion ripple out there.  A price of $1.50 would give this the second highest market cap comparatively to Bitcoin.

These are the simple, often overlooked calculations you need to look at when you’re investing in a coin.  How much could the price of this thing actually rise?

III. Buy Low/Sell High

This is the simplest strategy, but a very important one.  Through traffic on my blog, I can tell that interest piques when a coin’s value is rising.  Oddly enough, it seems when a coin is on an upward trend, people are more anxious to buy.  Then, when a correction happens and the price dips, people sell them off quickly.  Almost in disgust, lol.

You want to be on the opposite side of this equation.  This comes from doing research, following news feeds, trying to predict when some sort of information is going to be publicized, and the value is going to be inflated.  You’ll want to buy before this increase, usually during a dip or correction.  You then in tern should only sell when the value is higher then when you purchased.  And that, my babies, is called a profit.

This is a very simplified list of things to measure, but it should give you more weapons than the average bear.

There we go!  Hopefully you should be well informed on how to buy cryptocurrency, how to trade it, and how to store it.  I’m usually online in the live chat window during USA (PST) hours if you can’t seem to figure something out.

Good luck!

 

Any other questions?