Exchange rates:
528525
Exchangers:
384
Updated:
16:44:36

How to buy cryptocurrency profitably?

When purchasing cryptocurrencies, the first thing to consider is how you will store your tokens. There are two types of wallets - custodial and non-custodial. The first type is similar to regular online banking, where a third-party service manages your funds on your behalf. The second type of wallets provides full access to your funds regardless of the software used, but it requires you to securely store a mnemonic phrase consisting of 12-24 words.

If you lose your password in the first case, you can recover access or verify your identity. However, in the second type of wallet, it is impossible to regain access without the mnemonic code. Moreover, while the first case has certain protection measures against hacking attempts, if a fraudster gains access to the mnemonic code of the second type of wallets, they can freely manipulate your funds.

For this reason, the codes are not stored electronically on a computer but manually written down on a separate sheet of paper.

However, it is important to remember that by using a custodial service, you are transferring your funds to that service and fully depend on its operations. The service can impose various restrictions, fees, conduct unscheduled maintenance, or freeze accounts in case of suspected fraud. Verification requirements to continue using such a service are also not uncommon.

Where to register a wallet?

You can find a suitable wallet for storing Bitcoin through search or in the directory of the official community on the bitcoin.org website.

A list of the most popular cryptocurrency exchanges can be found in a separate section on our website: cryptocurrency exchanges.

The choice of storage method determines the further options for buying cryptocurrency profitably.

How to buy cryptocurrency?

On custodial wallets

Most custodial services offer the option to purchase cryptocurrencies internally using a bank card. Various online wallets and centralized exchanges are custodial services. Simply register with them, complete identity verification, and pay for your purchase using a bank card or electronic wallet.

Unfortunately, convenience comes at a cost. Pay close attention to the fee for topping up your account, as due to acquiring peculiarities, the fee for internal account replenishment can be 3.5% or higher. Sometimes the fee is already included in the exchange rate of the service, which may be higher than the market price.

However, even if an exchange is chosen as the storage method for your funds, significant savings can be made on the purchase. Simply buy cryptocurrencies or stablecoins (special cryptocurrencies pegged to the value of the US dollar) in an exchange office for the purpose of buying the desired cryptocurrency. The most optimal way is to purchase USDT or USDC tokens to your exchange wallet address and then buy the desired cryptocurrency at the market price on the exchange.

It is worth noting that some exchanges allow deposits not only through stablecoins but also through special exchange codes. Examples of such exchanges include Exmo, LiveCoin, Cryptex, and Kuna.

When choosing stablecoins, it is advisable to pay attention to the blockchain on which the token is based, as it affects the speed and size of the transaction fee. Additionally, it is important for the blockchain used by the exchange office to match the blockchain of the exchange's deposit wallet. If this is not explicitly stated, you can clarify with customer support or determine it based on distinctive features:

1... - OMNI

T... - TRC-20

Ox... - ERC-20 (or BEP20)

On non-custodial wallets

If a non-custodial wallet was chosen for storing cryptocurrencies, you can also buy cryptocurrency through an exchange office or with the help of an exchange and then withdraw it. However, when buying on an exchange, pay attention to the withdrawal feesas they can be significant, especially when transferring a small amount in congested blockchains like Bitcoin or Ethereum (ERC-20 tokens).

Exchange offices compete for customers, so you can find very advantageous offers that are close to the exchange rate. You can also pay for your purchase through a bank card, any existing payment system, or in cash. To find an exchange office, you can use our monitoring service, BestChange.ru. This allows you to compare the profitability of rates in different services before making an exchange and check their reputation.

Exchange services may require verification, especially when transferring funds from bank accounts. Information about possible or required verification is indicated with a separate icon in our monitoring, and this information should be clearly stated on the exchange office's website.

Exchange services do not transmit the received information to banks, but in the event of a request from law enforcement agencies regarding the origin of certain funds, user data may be provided to the Ministry of Internal Affairs. This happens very rarely, but it is worth considering.

No matter which purchasing method you choose, do not forget about your security. Try to verify the reputation of services and make payments only after checking all available information.

© BestChange.com – , updated 08/29/2023
Reprints are allowed only with permission of BestChange

See also