The prices of Bitcoin and other cryptocurrencies have been down more than up over the past couple of years, yet crypto’s popularity has remained strong.

With hundreds of available coins, there is no shortage of options for crypto investors. But before you start buying cryptocurrency, it’s important to understand the basics of crypto investing, including how to choose a platform, open an account, and purchase cryptocurrency. You also need to understand the risks involved.

In this article, I cover the various crypto trading platforms and walk you through the process step-by-step. If you’ve never traded crypto, this is a good starting point.

How to Invest In Cryptocurrency

As you’ll discover later, there are multiple ways to buy and sell cryptocurrency. However, the easiest way for beginners to trade in Canada is through a cryptocurrency exchange. The following four steps take you through the process, from choosing to invest to placing trades.

Step 1: Choose An Investment Amount

Your first step is to decide on an investment amount. Remember, cryptocurrency can be a risky investment, and its value may be volatile. Start by considering how much you’re comfortable investing without causing financial stress. It’s crucial only to invest what you can afford to lose.

Step 2. Choose a Crypto Platform

Next, you need a platform to manage your investments. The easiest way to trade crypto in Canada is through a cryptocurrency exchange. Most crypto exchanges allow you to trade dozens of popular coins and have low fees. Some well-known Canadian exchanges include Bitbuy, Coinsmart, and Wealthsimple Crypto. Most, not all, crypto exchanges are designed to accommodate beginners and advanced traders.

When choosing a cryptocurrency exchange, consider the following factors:

• Fees: Each platform charges fees, including transaction, withdrawal, and deposit fees. Compare the costs to ensure you’re not overpaying for your trades.
• Security: Make sure the platform has a strong security track record and offers features such as two-factor authentication and secure storage for your crypto assets.
• Selection: I recommend finding a platform that offers the widest range of coins, especially if you’re interested in trading lesser-known tokens.
• Ease of use: If you’re a beginner, you’ll want a platform that’s easy to navigate and understand. Look for platforms with clean interfaces, helpful customer support, and user-friendly tools.

By taking the time to research and compare different crypto platforms, you’ll find one that suits your needs and makes your journey into the world of digital currency more enjoyable.

Step 3. Open An Account to Trade Crypto

Once you’ve chosen an investing platform, it’s time to open an account. Most exchanges offer a straightforward registration process. You’ll need to provide your basic personal information, including your driver’s license or passport and proof of address.

The verification process is mandatory for most exchanges as they have to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations.

Once your account has been verified, you can link your bank account or credit card to your crypto exchange account. This way, you can fund your account with fiat currency (Canadian dollars) and transfer your earnings back to your bank account when it’s time to cash out.

Keep in mind that each exchange has different fees and limits for deposits and withdrawals, so it’s important to familiarize yourself with these details before committing to any one platform.

Step 4: Purchase Your Cryptocurrency

Once you’ve decided to invest in Bitcoin, Ethereum, etc., you’re ready to place your order.

Like a regular online brokerage account, most crypto exchanges allow you to place several types of trades, including market orders, limit orders, and stop-limit orders.

A market order is a simple way to buy cryptocurrency at its current price. Limit orders allow you to set a specific price at which you’d like to purchase the asset, and the order will only execute if it reaches that price. Stop-limit orders are similar to limit orders, but they also include a stop price that triggers the limit order.

When you’re ready to buy, choose the option that best suits your needs, and finalize your order.

Popular Crypto Trading Platforms

While cryptocurrency exchanges are the most popular way to buy and sell crypto in Canada, you can also use P2P exchange services and Bitcoin ATMs. Here’s a brief overview of how each one works.

P2P Exchange Services

Peer-to-peer (P2P) exchange services, like Paxful, are an alternative way to trade cryptocurrencies. Instead of using an intermediary like a centralized exchange, you trade directly with other individuals. When using P2P exchanges, keep in mind that transactions may take longer due to the manual nature of the process.

Bitcoin ATMs

Bitcoin ATMs are physical machines where you can buy Bitcoin or, in some cases, sell Bitcoin for cash. They offer a convenient way to invest in cryptocurrencies without requiring an online platform. To find a Bitcoin ATM near you, use a search tool like CoinATMRadar.

Keep in mind that fees for using Bitcoin ATMs tend to be higher than on exchanges, and the transaction limits are often lower. That said, they provide a quick and easily accessible method to invest in Bitcoin for those who prefer a more hands-on experience.

While trading cryptocurrencies, remember to manage your risks and never invest more than you can afford to lose. Experiment with different platforms to find the best fit for your needs and stay informed about the evolving crypto landscape.

Final Thoughts

Cryptocurrency investing offers the potential for high returns. But regardless of your experience level, you should approach crypto with a cautious mindset, as the crypto market is extremely volatile.

Remember, trading crypto is not for everyone. It’s best suited for individuals with a high tolerance for risk and a strong understanding of the technology. So take your time, stay informed, and always consider your personal financial goals before diving in.

Start by familiarizing yourself with the available options. Research the most popular cryptocurrencies, such as Bitcoin and Ethereum. Have a clear strategy in mind and set realistic expectations for your cryptocurrency holdings.

Diversify, set reasonable goals, and be prepared to face the risks associated with buying crypto. Don’t be afraid to ask for help or guidance from professional advisors or experienced investors.

Lastly, remember that investing in cryptocurrency is in no way a guaranteed path to wealth. Continue to invest in mainstream assets, such as stocks, bonds, and real estate, to maintain a balanced portfolio. By following these steps and using caution, you’ll increase your chances of success.

FAQs

What are the best platforms for buying cryptocurrencies?

While there are many cryptocurrency exchanges to choose from in Canada, Bitbuy, and Coinsmart are two that I often recommend. Both of these platforms allow you to trade all of the major coins, are competitive on fees, and make it easy to deposit and withdraw funds.

Their trading platforms are also solid. Keep in mind that every platform has its unique features and fee structures, so it’s important to do your research and select the one that best fits your needs.

What are the safest ways to store digital assets?

You should always protect your crypto holdings. Generally, hardware wallets are considered to be the safest option for storing cryptocurrencies. These devices securely store your private keys offline (cold wallet) and are immune to hacking attempts.

Examples of popular hardware wallets include Ledger and Trezor. You can also use reputable software wallets with strong security features, but make sure to enable two-factor authentication.

Are altcoins worth considering as an investment?

While some altcoins have shown significant growth and potential, they also come with additional risks. As a beginner, it’s important to be cautious when it comes to selecting altcoins for investment.

Research the history behind the coins and only invest in those with a solid use case and a strong development team. Remember, diversifying your portfolio with a mix of established and promising altcoins may help you manage risks and capitalize on growth opportunities.

How do beginners get started in cryptocurrency trading?

If you’re new to the cryptocurrency market, it’s important to start by learning the basics. Educate yourself on key terms, how digital currencies work, and the various cryptocurrencies that are available. Make sure you fully understand the risks, the volatility of the market, and be prepared for fluctuations in your investment value.

Start by investing a small amount on reputable platforms like Bitbuy, and consider dollar-cost averaging (DCA) to ease your way into the market. As you gain more experience and knowledge, you can explore other strategies and techniques suitable for your investment goals.