This article will analyze how to buy cryptocurrency on the stock exchange, not become a victim of scammers and not lose your funds.
Cryptocurrency remains one of the most volatile assets. This is because of the lack of a single emission center and legislative regulation. The cost of coins is constantly changing, sometimes renewing historical highs, sometimes losing tens of percent. If you want to make money on price fluctuations, a cryptocurrency exchange is the right platform.
Create a crypto wallet
The purchased cryptocurrency needs to be stored somewhere. Therefore, before you buy cryptocurrency on the exchange, create a wallet. There are two types of wallets: cold/offline (for example, hardware or paper) and hot/online. The former is needed for long-term cryptocurrency storage and is more secure because they are not connected to the Internet. The latter is convenient for quick access to funds and operations on the exchange. On hot wallets, it is recommended to have a small amount that is needed for transactions at the moment.
The Ledger Nano S hardware wallet is an example of a cold crypto wallet. Photo from the manufacturer’s website
Many cryptocurrency exchanges allow you to create wallets directly in the user’s account. These include the most important sites like Binance or Huobi.
Your wallet will have two keys: public and private. The first will be needed to transfer funds to it. The key is a sequence of characters used similarly to a bank account number.
Choose a venue
Before you buy cryptocurrency on the exchange, sеlect the appropriate platform according to the following parameters:
Reputation. Read user reviews on crypto forums like Reddit or bitcointalk.
Commission size. On average, it is 0.2% but may vary depending on the type of transaction and trading volume.
Daily trading volumes. The higher they are, the more your opportunities to earn.
Variety of payment instruments. For a beginner, this is not the most relevant indicator, but in the future, it may turn out to be necessary.
Location and restrictions. Some exchanges do not work with citizens of several countries. It is better to clarify this in advance.
Support service quality.
The number of crypto exchanges is significant; we will list only a few popular sites in the Russian Federation and the CIS. These are the largest exchanges in terms of trading volume that support operations with fiat currencies (traditional ones, such as the dollar, euro, ruble, and so on) and have a Russian-language interface.
Binance
The largest crypto exchange today. It processes 1.4 million transactions every second, and the daily trading volume is about $30 billion. More than 1,000 currency pairs are traded on Binance; there are pairs with fiat currencies.
Binance has its own BNB token, which can be used to pay fees and other payments within the system.
The exchange has a well-made Russian-language interface, high transaction speed, and low commission: from 0.012% to 0.1%. The commission size depends on the number of transactions; paying in BNB is more profitable. All popular cryptocurrencies are represented on Binance; you can open a wallet in any of them. Users must pass account verification on buying cryptocurrency on the Binance exchange.
Huobi Global
The largest Chinese exchange in terms of trading volume – about $ 6 billion per day. Eight hundred ninety-eight trading pairs are available, including those with fiat. The peculiarity of this exchange is that you can replenish your account with cryptocurrency and withdraw crypto assets without passing verification. For transactions with fiat currencies, the proof is required. The exchange can be used from a mobile phone, there is also a Russian version, but the translation is incomplete. Huobi pays special attention to security and has a distributed anti-hacker protection system. Besides translation into Russian, the disadvantages include high commissions – up to 0.2%.
BitFinex
It has fiat pairs (a total of 313 trading pairs are available), a well-developed Russian version, and round-the-clock technical support in Russian. Commissions are higher than the market average – up to 0.2%. Verification is not required for deposits and withdrawals in cryptocurrency, but for transactions with fiat, it is necessary and quite complicated.
Bithumb
The quality of translation into Russian here is not the highest, but passing verification to buy cryptocurrency on the exchange is unnecessary. Commissions on Bithumb are low – up to 0.1%, and there are no commissions for replenishment. Among the advantages of this exchange is the availability of additional tools for earning, such as mining and staking. The number of trading pairs is 327; there are pairs to fiat.
EXMO
The largest exchange in Eastern Europe is popular in Russia and the CIS. The turnover is small compared to the giants of the industry – about $ 50-60 million per day. One hundred fifty-seven trading pairs are available to users.
The advantages of EXMO include many pairs with fiat, which is convenient for those who buy a cryptocurrency for the first time. There is a well-developed Russian-language interface; you can trade from a mobile phone, and account verification is required.
Commissions on EXMO are higher than the market average and can reach 0.3%. However, this is offset by the ability to purchase Premium Cashback and pay no commissions regardless of the trading volume.
The exchange has offices in London, Kyiv, and Moscow and a UK financial activities license.
After choosing a site, you must register and, if necessary, pass verification.
Choose an asset
It is better to trade an asset that you are familiar with. Beginners should start with the largest and most well-known assets such as Bitcoin, Ethereum, Cardano, Binance Coin, Tether, and Ripple. To get acquainted with the purchase, read the analytics and track price fluctuations on the largest exchanges (some of them are listed in the previous paragraph) over time. Some sites offer demo accounts for beginners to get familiar with the tools before you buy real cryptocurrency on the exchange.
Spot trading is the easiest way to buy cryptocurrencies on the exchange.
The most common option for buying cryptocurrency on the exchange is spot trading. The spot market implies an instant purchase and sale of an asset, and the spot price is the actual cost of a unit of an asset at a given time. Most significant exchanges are highly volatile, and prices change very quickly. When setting prices, crypto exchanges rely not only on the data of aggregators (such as CoinGecko or Coin Market Cap) but primarily on the cost of the last spot transaction. This price is displayed in the so-called order book – a list of all recent transactions. In addition, it is recommended to view prices on other exchanges additionally. The price is formed based on supply and demand, so it may differ in different businesses. Many traders make money by acquiring an asset on one platform and selling it on another.
To buy cryptocurrency on the exchange, determine the bid – the maximum amount that you are willing to give.
Next, create a purchase order – an order. Charges are of several types:
Market – at best available current price and quickly.
limit — at a given or more favorable price; however, the execution of such an order is not guaranteed,
stop market – has a stop price at which the order is placed on the exchange and is instantly executed at the best current price,
stop limit – has not only a stop price but also a limit price at which the order must be completed.
Some exchanges do not work with stop orders; pay attention to this when choosing a platform.
After placing an order, the exchange automatically selects a seller with the conditions that suit you and executes the transaction. As a rule, businesses charge a commission for depositing money into an account for purchase and withdrawing funds.
In addition to spot trading, many other exchange instruments allow you to earn money: options, futures contracts, swaps, and much more. They are suitable for more experienced traders, implying earnings on rate fluctuations.
Other Ways to Buy Cryptocurrency
If your goal is not trading but a quick purchase of a crypto asset, you can use the services of exchangers. The course is fixed there, and verification is not required. In addition, exchangers have a simple interface:
choose the desired pair of currencies,
enter quantity,
send an exchange request
pay for the application and receive cryptocurrency to the specified account.
We wrote more about choosing a suitable exchanger in this article.
The Mine has processed 5,000 exchange requests daily for five years. If you need a proven platform for a quick purchase of cryptocurrency in a convenient way for you, Mine is at your service.
Summary
Buying a cryptocurrency on the exchange for a beginner will have two main stages.
Preparation: choosing a cryptocurrency, creating a wallet in the currency of interest, studying the selected asset, and choosing a site.
Registration on the site, determining the purchase amount, and placing an order.
Exchanges have several cryptocurrencies earning tools, which we will discuss in subsequent articles. If the exchange interface is complex, you can quickly buy cryptocurrency using an exchanger.
