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How and Where to Buy Cryptocurrency?

Last updated 7th Jan 2023
Disclosure

This comprehensive guide is your all-in-one reference for learning different aspects of the cryptocurrency buying process including how to choose the right provider, options offering the lowest fee, available payment options, and much more.

To save you time, the top three providers for buying cryptocurrency are Coinbase, Binance, and eToro. These platforms offer the widest range of cryptocurrencies, have excellent reputations with their customer base, and offer intuitive user interfaces.

Best Exchanges to Buy Cryptocurrency

1
eToro
Minimum Deposit
$50
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
2
Opensea
Minimum Deposit
$
Exclusive Promotion
User Score
7
The largest NFT marketplace
3
NBA Topshot
Minimum Deposit
$
Exclusive Promotion
User Score
7
Made for NBA fans
4
Rarible
Minimum Deposit
$
Exclusive Promotion
User Score
7
Aggregated NFT marketplace
5
SuperRare
Minimum Deposit
$
Exclusive Promotion
User Score
6
NFT Art Marketplace

How to Buy Cryptocurrency

In this section, we have outlined the process of buying cryptocurrency. Beginners will find this section time-saving when getting started.

Step 1: Choose a platform for trading cryptocurrency
Step 2: Register an account
Step 3: Complete KYC verification
Step 4: Deposit funds
Step 5: Buy cryptocurrency
Step 6: Transfer to wallet

Buying Cryptocurrency for Beginners - The Best Platforms Compared

This section is a good starting point for beginners who want to explore a suitable platform to fulfill their cryptocurrency trading needs.

Buy Cryptocurrency With Crypto Brokers - The Easiest Way

Crypto brokers are the easiest way for beginners to get started because they handle the trades on behalf of the customer. Also, you can deposit using fiat currencies, and many payment methods are available, which include credit/debit cards, bank transfers, PayPal, and digital wallets. Some of the top providers include eToro, Robinhood, and Coinbase.

ProviderFee (USD 1000)Number of CoinsGet Started
🥇 eToro1%30Start with eToro now
🥈 RobinhoodNo fee16Start with Robinhood now
🥉 CoinbaseVaries200+Start with Coinbase now

The providers listed in the table above have been shortlisted based on their positive reputations among the users. On top of that, these platforms offer transparent fee structures, so you can fully understand how much you are paying while trading on the platform.

eToro

This platform provides the trading of various assets, which include ETFs (exchange-traded funds), stock, and cryptocurrencies. The exchange offers a user-friendly interface, social trading, and excellent educational content. eToro’s CopyTrader™ feature allows other users to copy the trades of expert traders using the platform - perfect for beginners learning the ropes.

Robinhood

Robinhood started out as a disruptor in the brokerage industry, and its competitive advantage can be traced back to commission-free trades. Moreover, there are no withdrawal or inactivity fees, which further incentivizes users to give Robinhood a try. However, other brokers also offer commission-free trades, so Robinhood’s advantage has somewhat diminished.

Coinbase

Coinbase is an American-owned company based in New York. It also offers a competitive fee model, but you will be charged a spread markup on both sides of the trade. The charting tools and easy-to-use mobile app are some of the attractive points of using Coinbase for beginners.

Best Wallets to Store Cryptocurrency - Crypto Wallet Comparison

Crypto wallets are programs or devices that allow you to store your private keys in your personal custody rather than leaving them to the exchanges. The private keys can unlock access to your crypto holdings, hence having them in your personal custody ensures maximum security.

Crypto wallets come in various forms, including hardware wallets that are similar to USB sticks and mobile apps like the Coinbase Wallet or Trust Wallet. Hardware wallets are considered to be the best and safest option to store your keys as these wallets don’t need to be connected to the internet unless you want to send or receive crypto.

ProviderWallet TypeNumber of CoinsGet Started
🥇 Ledger Nano XHardware1800+Start with Ledger Nano X now
🥈 Ledger Nano YHardware1800+Start with Ledger Nano Y now
🥉 Trezor Model THardware1200+Start with Trezor Model T now

The providers listed above offer trusted storage solutions that many customers have had great experiences with. Also, they allow you to store a large number of cryptocurrencies, which means you can store all your coins in one location.

How to Sell Cryptocurrency in 2022 Using eToro?

This section summarizes a beginner-friendly approach to selling cryptocurrency on eToro.

Step 1: Sign in
Step 2: Choose cryptocurrency
Step 3: Confirm transaction

Buy Cryptocurrency CFDs - Best for Trading

CFD (Contract For Difference) in crypto involves trading on the movement of cryptocurrency without having real ownership of the asset. The idea is to predict whether the price of a cryptocurrency will increase or decrease over a specified time period, so you are not buying any assets.

ProviderFee (USD 1000)Number of coinsGet Started
🥇 PepperstoneVaries based on instrument20+Start with Pepperstone now
🥈 EightcapVaries based on instrument250+Start with Eightcap now
🥉 Plus500Market Spread19+Start with Plus500 now

The listed CFD platforms above were chosen because these providers offer the most popular cryptocurrencies for CFD trading, excellent user interface designs and competitive fee structure in the industry. This allows you to save money when trying to profit from crypto price movements. Additionally, these providers are tightly regulated by trusted government-appointed organizations worldwide.

Pepperstone

Pepperstone is an Australian-based financial services company founded in 2010 by Owen Kerr and Joe Davenport. It provides faster registration and responsive customer support. Smooth deposit and withdrawal processes lead to a seamless experience while trading cryptocurrencies.

Eightcap

Eightcap is another Australian-based trading platform that has a strong reputation. The platform offers smooth account opening experiences and quick deposits/withdrawals. Also, their deposits and transaction fees are competitive, so you’ll be saving money when compared with more costly brokers.

Plus500

Plus500 is a global fintech company founded in 2008 with headquarters in the UK. The easy-to-use platform has an amazing mobile app, which you can download from the App Store or Google Play. Also, the fast account opening process means you can start trading shortly after landing on their homepage.

What Is the Difference Between Buying Cryptocurrency and CFDs?

It is important to understand the differences between buying cryptocurrencies and CFDs to help you choose the right transaction type. Here is a summary of the differences you should know about:

  • Asset Speculation: buying cryptocurrency gives you ownership of the asset. In comparison, a CFD contract does not since it is a speculation on if the price of the cryptocurrency will increase or decrease.

  • No Wallet: CFDs do not require a wallet to store the cryptocurrency keys, whereas wallets are required when you buy cryptocurrencies. Therefore, CFDs have fewer security risks since hacking events will not cause you to lose money.

  • Fees: the fees associated with buying cryptocurrencies are typically lower than what brokers charge for CFD contracts.

  • Leverage: CFD brokers usually provide leverage that allows you to get a loan to increase the trading size.

Pros

Easier to get started
Market liquidity is not an issue as going against the broker
You have access to leverage
No need for crypto wallet

Cons

Don’t own the asset - Hence can’t utilize it or spend it
No airdrops
Fees can be higher compared to buying cryptocurrencies

Best Apps to Buy Cryptocurrency - Most Convenient

Apps allow you to buy cryptocurrency without firing up the browser in your laptop. It is a convenient alternative since the apps usually have smoother user experiences. Some of the best apps for buying cryptocurrencies are eToro, Coinbase, Crypto.com, Plus500, and Binance.

ProviderFee (USD 1000)Number of coinsGet Started
🥇 Coinbase app0.6% to 0.40%. Varies based on trading volume.200+Download now
🥈 eToro app1%30+Download now
🥉 Crypto.com0.0750%. Varies based on trading volume.220+Download now

The listed apps for buying cryptocurrencies above were chosen because of their rock-solid market reputations, long years of service, exclusive features, competitive pricing structure, community-driven initiatives, and more.

Buy Cryptocurrencies With Crypto Exchanges - The Cheapest Way

Cryptocurrency exchanges are the cheapest way of buying crypto. These platforms act as the intermediary between the buyer and seller to facilitate the transactions through an order book while charging a small trading fee for every completed transaction. Popular examples of cryptocurrency exchanges include Coinbase, Binance, and Kraken.

To learn more about the leading cryptocurrency exchanges feel free to check out our “Best Cryptocurrency Exchanges” guide. Alternatively, visit your preferred search engine, and search for a long list of popular crypto exchanges.

You can buy cryptocurrency directly on an exchange with fiat currencies, and the ones available depend on the platform. This is done by depositing fiat from methods such as debit/credit cards, bank transfers, digital wallets, and much more. Once the fiat is funded in the platform’s account balance, it can be used to buy cryptocurrencies. The transaction fees and spread depend on the platform.

You can also use some cryptocurrencies and swap them for other cryptocurrencies like Bitcoin, Ethereum, Binance Coin, and Tether.

Bitcoin is arguably the best choice since it is the most popular cryptocurrency and, therefore, widely available.

ProviderFee (USD 1000)Number of CoinsGet Started
🥇 Coinbase0.6% to 0.40%. Varies based on trading volume.200+Start with Coinbase now
🥈 Binance0.10%350+Start with Binance now
🥉 Kraken0% to 0.26%. Varies based on trading volume and currency pair.200+Start with Kraken now

We have chosen the providers listed above because of their competitive and affordable trading fee structure. For example, the trading fee of 0.10% on Binance is an excellent value for someone who is trading large orders Also, these exchanges are tightly regulated by government-appointed organizations like the FCA, SEC, CFTC, and FinCEN.

Buy Cryptocurrencies Using Decentralised Exchanges (DEX) - Best for Altcoins

Decentralized exchanges are peer-to-peer trading platforms where users buy and sell cryptocurrency without the need for an intermediary. This is a great choice to enjoy anonymity while trading crypto since you don’t even need to share an email address. Also, it’s more secure to trade cryptocurrency from a DEX since you can interact with exchanges directly from DeFi wallets.

ProviderFee (USD 1000)Number of CoinsGet Started
🥇 CurveVaries41Get started now
🥈 Uniswap0.3%495Get started now
🥉 PancakeSwap0.25%3584Get started now

The decentralized exchanges listed in the table above offer relatively higher liquidity which means it will be easier to trade with others. Also, you can enjoy anonymity since account registrations or KYC verification is not required.

Can You Buy Cryptocurrencies Using P2P Services?

Yes, cryptocurrencies can be bought using P2P services such as LocalBitcoins. These platforms allow users to post offers with a price and accepted payment method. Buyers can search the platform for offers that provide terms they are willing to accept. In the table below, you will find the top P2P platforms.

ProviderFee (USD 1000)Number of coinsGet Started
🥇 Binance0.10%350+Get started now
🥈 LocalBitcoinsNo fee1Get started now
🥉 Bybit0.1% to 1%. Varies based on VIP level.237Get started now

The P2P providers listed in the table above were chosen because they offer low trading fees, flexible deposit/withdrawal options, and have established huge popularity among the users.

Can You Buy Cryptocurrency Using Other Trading Platforms?

In this section, a long list of alternative trading platforms has been shared so that additional options can be explored for beginners and advanced users. You will find information such as the corresponding fee, the number of supported coins, and a link to our detailed review.

Cryptocurrency PlatformCan You Buy Bitcoin?Fee (USD 1000)Review
BinanceYesStarting from 0.1%; varies based on trading volume.Binance review
TD AmeritradeYes$0 commissionsN/A
BitstampYesStarting from 0%; varies based on trading volume.Bitstamp review
BittrexYesStarting from 0.35%; varies based on trading volume.Bittrex review
CoinbaseYesStarting from 0.6%; varies based on trading volume.Coinbase review
PoloniexYesStarting from 0.155%; varies based on trading volume.Poloniex review
BitMartYesStarting from 0.25%; varies based on trading volume.N/A
BitrueYesStarting from 0.098%; varies based on trading volume.Bitrue review
BlockFiYesStarting from 1% spread; varies based on trading volume.N/A
CoinDCXYesStarting from 0.2%; varies based on trading volume.N/A
CoinSwitchYesStarting from 0.5%; varies based on trading volume.N/A
Crypto.comYesStarting from 0.075%; varies based on trading volume.N/A
EtherDeltaNoN/AN/A
E*TRADENoN/AN/A
FidelityYes$0 commissionsN/A
Gate.ioYesStarting from 0.2%; varies based on trading volume.N/A
HotbitYesStarting from 0.2%; varies based on trading volume.N/A
KrakenYesStarting from 0.26%; varies based on trading volume.Kraken review
KuCoinYesStarting from 0.1%; varies based on trading volume.KuCoin review
RobinhoodYes$0 commissions; varies based on order flow fee and trade volume.N/A
UpholdYesBuy spread of 0.85%.N/A
VenmoYesThe fee will vary based on the purchase or sale amount.N/A
VoyagerYes$0 commissionsN/A
WazirXYes0.2% commissionsWazirX review
WealthsimpleYes$0 commissions.N/A
WebullYes$0 commissions.N/A
Cryptocurrency PlatformCan You Buy Bitcoin?Fee (USD 1000)Review

How to Choose the Best Provider to Buy Crypto

To choose the best crypto trading provider you need to consider some important factors as explained below

  • Security: Dig into the background information of the platform and scratch the details about the credibility of the founding team, security methods deployed, reputation and track record.

  • Fees: compare the deposit, transaction, and withdrawal fees for different providers to find the most affordable option.

  • Available: ensure that the provider allows you to trade coins of interest. Ideally, you will have access to hundreds of cryptocurrencies.

  • Investment Selection: if you want to get into crypto investments, then look at if this is supported by the provider.

  • Educational Resources: some exchanges like Binance offer a crypto academy section that covers different topics on web 3.0 including but not limited to the blockchain, cryptocurrency, DeFi, GameFi, and more. The educational resources help a lot, especially beginners who are trying to explore the sophisticated world of crypto.

  • Bonuses: you may receive bonuses for registering with a provider. This also includes commission-free trades and or cash rewards.

  • User-friendliness: choose a platform that offers a smooth UI and UX to have a better trading and investment experience.

Best Ways to Buy Cryptocurrency

In this section, you will find the top ways of buying cryptocurrencies so that you can explore the method which best suits your requirements.

Buy Cryptocurrency Instantly With Online Banking - The Fastest Way

Many providers allow customers to deposit money with online banking, which is a fast and reliable method of transferring funds. Kraken is an example of a crypto trading platform that supports bank transfers.

Buy Cryptocurrency With PayPal - The Safest Way

PayPal is an industry-leading payment processor that is accepted at many cryptocurrency trading platforms. Moreover, this online payment processor is strictly regulated and offers strong security features when transferring money, which includes 2-factor authentication. An example of a crypto trading platform that accepts PayPal as a deposit method is eToro.

You can also buy cryptocurrency directly on PayPal in limited locations like the US and UK. Simply fund your account with fiat currency, navigate to the crypto section,find the cryptocurrency you want to buy, and choose the amount you wish to purchase.

Buy Cryptocurrency Using a Debit/Credit Card - The Convenient Way

You can use your debit/credit card to deposit funds to a crypto trading platform, but you need to be aware of the very high fees. It depends on your card provider and the platform where you are trading. Coinbase is an example of an exchange that supports credit/debit card deposits.

Buy Cryptocurrency Using Prepaid Cards

Prepaid cards allow customers to deposit money to a crypto exchange anonymously since no personal information is linked to the transaction. For example, PaySafeCard is a popular prepaid card that is offered at crypto trading platforms like Paxful.

Buy Cryptocurrency Using a Neteller, Skrill, or Venmo

Digital wallet services like Neteller, Skrill and Venmo are convenient and fast methods of depositing money to crypto trading platforms. However, you must typically use a credit/debit card or bank transfer to fund the accounts of these services. An example of a cryptocurrency trading platform that accepts digital wallets includes Binance.

Buy Cryptocurrency Using Crypto ATMs

Bitcoin ATMs are available worldwide where you can buy cryptocurrency using fiat currency. The transaction requires you to insert your phone number, verify your identity and scan your wallet QR code. Most people are used to ATMs, so it’s an approachable method of acquiring Bitcoin, but the transaction fees can be high compared to buying online.

Buy Cryptocurrency Using Cash

You can also use cash at crypto ATMs, but the accepted fiat currency depends on your location. You’ll receive the Bitcoin immediately after completing the transaction and you can use services like CointATMradar to find the nearest Bitcoin ATM.

Best Platforms to Buy Cryptocurrency in Other Countries

The best platforms for buying crypto may differ based on the country where you reside. That’s because in each country, the regulations, fees, and license requirements might vary.

CountryBest ProviderProvider TypeFee
AustraliaBybitP2P platform, appStarting at 0.10%, varies based on trading volume.
USABinanceExchange, app, brokerStarting at 0.10%, varies based on trading volume
UKeToroExchange, app, brokerStarting at 1%, varies based on trading volume
BangladeshKrakenExchange, app, broker0.9-1.5%
CanadaBitBuyExchange, app, brokerStarting at 0.1%, varies based on trading volume
HawaiiRobinhoodExchange, app, brokerNo trading fee
IndiaPaxfulExchange, app, brokerStarting at 1%, varies based on trading volume
JapanbitFlyerExchange, app, brokerVaries
New ZealandKuCoinExchange, app, broker0.0125-0.1%
PakistanCapitalExchange, app, brokerNo trading fee
PhilippinesCrypto.comExchange, app, broker0.04-0.4%
SingaporeGeminiExchange, app, brokerStarting at 1.49%, varies based on trading volume
South AfricaCoinSmartExchange, app, broker0.2-0.3%
UAECoinMENAExchange, app, broker,0.09-3.81%

How to Buy Cryptocurrency Safely

It is important to buy cryptocurrency safely, so you do not get scammed or make mistakes that cost you money. Here are the top points of consideration:

  • Regulators: check what regulators have given their seal of approval to the broker or exchange where you want to buy crypto. Ideally, trusted government organizations should vet the platform where you want to execute transactions.

  • Peer-to-peer: When using P2P platforms, make sure to use trusted providers like Binance that allow security features like two-factor authentication and encryption. If the platform does not require KYC verification, then the probability of getting scammed is high.

  • Fees: you need to check the fees ahead of time to avoid getting charged a relatively high fee. Some platforms have hidden charges that can affect any profit you make from crypto trading.

  • Wallets: ideally, if you own a large amount of cryptocurrency, it should be stored in your personal crypto wallet, especially cold storage because it is the safest option. However, you must ensure that the seed phrase to access the wallet is not lost.

  • Custom Reviews: read customer reviews about a platform to get a sense of their reputation. This can help you spot red flags that indicate you should avoid using that platform.

What Are the Fees When Buying Cryptocurrency?

It is important to compare the fees of cryptocurrency trading platforms to get the best deal. In the table below, we have listed various fee types for popular crypto trading platforms. When buying crypto worth 1,000 USD, you can expect to pay a fee of around 10 USD.

PlatformeToro BrokerPlus500 CFDCoinbase Exchange
Deposit feesVariesNo feeVaries
Purchase fees1%Spread of 0.30%1%
Holding feesVariesVariesNo fee
Selling Fees1%Spread of 0.30%1%
Payout fees$5No fee1%
Total feesSpread of 0.30% for selling/buying

Cheapest Way to Buy Crypto

You can save a lot when choosing a platform that charges a low deposit, trading and withdrawal fees. The table below provides 3 of the cheapest providers in the industry.

ProviderFee (USD 1000)Number of CoinsGet Started
🥇 Robinhood016Download now
🥈 Bybit0.1% to 1%. Varies based on VIP level.237Download now
🥉 Binance0.10%350+Download now

The providers listed in the table above were chosen because they are trusted platforms and offer some of the lowest trading fees. You will be hard-pressed to find competitive crypto trading platforms that offer lower fees with similar overall quality levels.

Fastest Way to Buy Crypto

If you want to buy cryptocurrency fast, you need to choose a provider that offers quick deposit methods. The table below provides the top 3 examples for fast crypto purchases:

ProviderFee (USD 1000)Number of coinsGet Started
🥇 eToro10 USD20Get started now
🥈 Kraken0.16-0.26%200+Get started now
🥉 Plus5000.6 pips19Get started now

The providers above offer instant deposit methods, which allows you to quickly fund your account. Also, the user interfaces are intuitive and responsive which means that you can use the platform to quickly find the cryptocurrency that you want to buy.

How to Buy Cryptocurrency Anonymously?

In most cases, you cannot buy cryptocurrency anonymously since a KYC verification step must be completed to register with most providers. However, you can buy crypto from decentralized exchanges anonymously.

How to Buy Cryptocurrency Without Registration or KYC?

There are a limited number of ways to buy crypto without registration or KYC, one of which is using decentralized platforms like Uniswap. Here is the step-by-step process:

Step 1: Choose a wallet
Step 2: Fund wallet with crypto
Step 3: Buy tokens

How to Buy Cryptocurrency Without Verification?

You may want to buy cryptocurrency without your identity being verified, and it is possible with a limited number of options. This includes buying crypto from an ATM machine using cash or using a wallet and purchasing from a decentralized exchange or P2P platform. We will share the step-by-step process for buying from a P2P platform.

Step 1: Choose a provider
Step 2: Search for an offer
Step 3: Buy crypto

Can You Buy Cryptocurrency Offline?

You may want to receive cryptocurrency offline to experience enhanced security. A paper wallet is an excellent method for this purpose. Have a look at the step-by-step process to understand the process of receiving cryptocurrency in your paper wallet:

Step 1: Create a paper wallet
Step 2: Move crypto to paper wallet

Should You Buy Cryptocurrency?

This section will help you determine if buying cryptocurrency is a good choice for you and what you should expect.

Risky Investment: you should understand that investing in cryptocurrency is risky because of the volatility and unpredictability. It’s not uncommon for the new cryptocurrency projects to crash overnight due to rug pulls. Also, crypto trading platforms are prone to attacks, which is another way your assets could be gone. Centralized exchanges that have been hacked in the past include Kucoin, BitGrail, and MtGox.

When to Invest: at the time of writing, the value of cryptocurrencies has taken a huge hit because of macro-level factors such as energy prices, political developments, and inflation. Therefore, you should assess the right buying time to ensure you get the biggest gains.

Cryptocurrencies have a fear and greed index, which ranges from 0 to 100. When the index is at 25 or below, then there is extreme fear and that’s the right time to buy because the coin will be at the lowest price. However, when the index is at 75 or above, then there is extreme greed and the price will be highest because many people are buying the coin - this is the right time to sell.

Alternatively, you can follow the DCA (Dollar-Cost-Averaging) model, which means you should buy crypto over a time period to reduce the effect of price fluctuations.

Crypto Volatility: the price of cryptocurrencies is generally more volatile than fiat currencies. Therefore, you must ensure you can handle the volatility financially and stick to your financial goals.

Hacks and Security: crypto trading platforms can be hacked, so it’s safer to store cryptocurrencies in cold storage wallets. Using DeFi wallets is safer than storing cryptocurrencies on CEXs.

Oversaturated Market: there are many crypto trading exchanges, so the competition is stiff. This is great for traders because they enjoy lower transaction fees, better features, and intuitive user interfaces.

Crypto losses and SIPC: if you lose money while trading cryptocurrency because of fraud or hacking events, you are not protected by SIPC.

Benefits of Buying Cryptocurrency

There are many benefits to buying cryptocurrencies, which should help you figure out if it’s a worthwhile venture.

Make Money: If you are successful in buying a blue-chip cryptocurrency like Bitcoin or Ethereum during the dip at a much lower price, then you can land yourself in an opportunity of generating a significant ROI when these cryptocurrencies reach their ATH (all-time high) in the bull market.

Diversify Your Portfolio: There are thousands of cryptocurrencies in the market, which means you have a lot of options to diversify your portfolio.

Limited Supply: Many cryptocurrencies have limited supply and a deflationary tokenomics structure, which is one of the reasons why the native tokens of some projects scale in value.

Fast and Easy Transactions: Blockchain networks like Solana offer a robust transaction speed (faster than VISA) while keeping a low cost.

Low Fees: Emerging projects are reducing the cost of executing the transactions - for example, Polygon is a decentralized Ethereum scaling platform that provides lower gas fees.

Decentralization: Parties can interact with fewer constraints with decentralized platforms. Users are not required to register with a provider or be subject to rule changes. The platforms can be trusted because a central organization cannot tamper with user accounts.

When to Buy Cryptocurrency

Just like with buying stocks, getting the timing right while purchasing cryptocurrencies is important to generate maximum profits. Here are a few points to consider:

  • Buy the Dip: Buying the dip refers to buying cryptocurrency when it has fallen from its peak valuation.

  • Dollar-cost Averaging: instead of buying crypto in one transaction, you can spread them over time. Therefore, your cryptocurrency investment portfolio will be less affected by price fluctuations.

Should You Invest in Bitcoin or Altcoins?

You should conduct your own research before deciding if you should buy Bitcoins or Altcoins. This allows you to understand why one choice is better than another without relying on advice that might be misleading.

What Is the Best Cryptocurrency to Buy?

In this section, we provide suggestions for what cryptocurrencies are good investment choices. Keep in mind, that these are suggestions and not guarantees of the best-earning potential.

Bitcoin: Best Cryptocurrency for Beginners

Bitcoin is the best cryptocurrency to buy for beginners because of several reasons including but not limited to: operating independently from other markets, not subject to the same inflation as fiat, great store of value, mammoth size community, robust infrastructure, limited supply subject to halving every four years, and more.

BNB: Potential long-term Growth

Many experts believe that the Binance coin will continue to grow because it has a track of continued growth. That’s because it has a lot of utility, which includes the ability to trade and invest in other securities, quarterly token burn, and reduced fees paid while trading cryptocurrency. Also, it fuels the Binance Smart Chain, which is one of the most popular programmable blockchains that runs smart contracts.

Decentraland: Great to Get into Metaverse

If you're interested in a metaverse coin, then Decentraland (MANA) is one of the best cryptocurrencies. It is ranked as the top metaverse coin based on market capitalization. The adoption by big brands gives this metaverse project value, legitimacy, and mass adoption. For example, brands like Nike, Samsung, and Coca-Cola are involved with Decentraland.

Ethereum: Easy to Buy into Smart Contracts

Ethereum is the driving force behind web 3.0 innovations like decentralized finance (DeFi), blockchain gaming, NFTs, decentralized applications, decentralized autonomous organizations, and more. These innovations have found their way into the economy to help industries to scale.

Since ETH is the native cryptocurrency of the Ethereum ecosystem, the users interacting with anything built on top of this blockchain will need to transact this coin. This leads to the immense utility for the coin followed by EIP-1559 burn functionality that reduces the circulating supply to enhance the value.

Do You Need to Pay Tax on Cryptocurrency in the US?

The Inland Revenue Service is the tax authority in the United States where you need to share crypto transactions. The tax authority classes cryptocurrencies as an asset and a digital representation of value. Assets that share the characteristics of virtual currency will be treated as Federal Income for tax purposes. Here is what you need to know:

Tax Payment: You do not need to pay taxes for holding cryptocurrency in the United States. However, you will need to pay taxes if you generate returns from selling your crypto because it triggers the capital gains clause for assets.

Additionally, if you receive cryptocurrency for business payments, then it’s a taxable transaction because it’s classed as business income.

Taxable Events: these include paying for goods and services, exchanging for another cryptocurrency, receiving forked or mined crypto, and exchanging crypto for fiat currencies.

Non-taxable Events: using fiat currency to buy cryptocurrency, donating crypto to charity or other tax-exempt organizations, giving crypto as a gift, and transferring cryptocurrency between wallets.

Tax Report: to ensure that you can accurately report cryptocurrency activity, you must keep organized records throughout the year. To file your cryptocurrency activity at the end of the tax year, use the IRS form 8949 - Sales and Dispositions of Capital Assets.

When to file taxes: the tax year ends on December 31st, and it must be filled by April 15th of the following year.

Cryptocurrency Price Predictions: What Is the Future of Crypto?

In this section, we will cover the various aspects that contribute to the movement in the price of cryptocurrencies. This will help you better understand the complexities of trying to predict how coin prices change over time.

What Impacts Cryptocurrency Price?

Let’s dive deeper into the top 5 factors determining how cryptocurrency prices change.

  • Demand for Cryptocurrency: the demand depends on utility, which is what the currency can be used for. Utility increases the application of the coin and overall usefulness. Without utility, price increases are based on hype, and that eventually fades.

  • Competition: many coins have similar attributes, but if they are first to market, then they may end up the winner of that category. Also, technological improvements of previous coins may shift focus from older coins to better alternatives.

  • Market Sentiment: Cryptocurrencies have a FUD rating that ranges from 0 to 100, which is a measurement of the general sentiment towards how risky the currency is to buy. 0 is very risky and 100 is very safe.

  • Government Intervention: governments can interfere with cryptocurrency infrastructure. For example, China banned Bitcoin mining, which affected the coin’s price.

Cryptocurrency Market vs. Stock Market

This section will help you understand the differences between trading cryptocurrencies and stocks so that you can understand which avenue of investing is the right choice for you.

When investing in crypto, you do not get a share of a company, while stock provides this material asset. Therefore, crypto investors don’t get dividends, but they can stake crypto to receive passive income.

Another major difference is the operating horse. Stocks can only be bought during specific hours on weekdays. In comparison, cryptocurrency exchanges are online and open for trading 24/7.

Other Ways to Invest in Cryptocurrencies in 2022

This section provides various alternatives for investing in cryptocurrencies that do not involve buying the coins directly.

Stake Crypto Using DeFi or CeFi

DeFi or CeFi staking is the process of locking up cryptocurrencies in smart contracts, which allows you to get passive income and other rewards. The value of these rewards and income differs based on the coin you have chosen.

Buy Cryptocurrencies Using ETPs (ETFs & ETNs)

Investing in ETFs is another investment form that allows users to bet on wider aspects of the industry. This investment type tracks a range of crypto assets, so in one investment, you will be spreading the risk. Some of the more popular ETFs include BLOK, BLCN, and LEGR.

Invest in Cryptocurrency Trusts

Crypto funds refer to portfolios entirely made up of cryptocurrencies. Like indices, they spread the risk of investing since you are not committing to the price fluctuations of a single currency. Two trusts that you can consider include Ethereum Classic Investment Trust (ETCG) and the Bitcoin Investment Trust (GBTC).

Buy Cryptocurrencies Using Mutual Funds

Cryptocurrency mutual funds are packaged with several cryptocurrencies and presented as a single investment product. The number and specific cryptocurrencies included in the fund varies by the service offering the investment type. Grayscale Bitcoin Trust is an example of a popular cryptocurrency mutual fund.

Buy and Sell NFTs

You can buy non-fungible tokens (NFTs) using cryptocurrencies like Ethereum is the most popular currency for buying NFTs. NFT marketplace like OpenSea SuperRare and Nifty Gateway offers the users to buy or sell NFTs built on top of different chains like Ethereum, Polygon, Solana, Klaytn, and more

You will need to connect a DeFi wallet like MetaMask and Coinbase Wallet to execute NFT transactions. Popular examples of NFTs include Jack Dorsey's first ever Tweet, Bored Ape Yacht Club, and Beeple’s “Everydays: The First 5000 Days”.

Buy Cryptocurrency Stocks and Shares in Companies Owning Crypto

Consider investing in companies that hold large amounts of crypto such as Coinbase, Tesla, and Block. You can buy shares of these companies through the stock market using fiat currency. Specific stock options include

  • PayPal: cryptocurrencies got a massive boost from the news that PayPal decided to add cryptocurrencies as a payment form in 2020.

  • Nvidia: this is a GPU (graphical processing unit) manufacturer, which is one of the primary tools used to mine crypto.

  • Santander Bank: Santander Bank is one of cryptocurrency Labs’ first partners.

Cryptocurrency Mining

Cryptocurrency blockchain are secure because computations are used to verify the ledgers holding transactions. Miners use the computational power at their disposal to run these computations and in turn, receive cryptocurrency as a reward. However, it’s a costly process, so the Ethereum blockchain is going to observe Merge, which will remove the need for mining.

Use Cryptocurrency Faucets

You can earn cryptocurrency from faucets that trickle out a small amount of crypto from completing tasks such as solving puzzles, and watching ads and videos. Some of the top crypto faucet coins include Dogecoin, Litecoin, and Dash.

Is It Still Worth Investing in Cryptocurrency or Not?

In conclusion, investing in cryptocurrencies in 2022 is like investing in stocks, mutual funds, or real estate - you need to understand the risk and choose investments that are based on research. Do not invest more than you can afford to lose and try to spread the risk by diversifying your investment portfolio. Cryptocurrencies are volatile investments but there is a lot of opportunity in 2022 if you make the right bets.

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Amala Pillai

Amala Pillai

Amala is custom content and news editor based in London. She is a former financial journalist based in Singapore with 7 years of experience covering a range of business and financial topics. Now she focuses on crypto and macro-economics. She has also covered feature profiles, tech, business politics and ESG— she was the Environment Editor for the Solutions Newspaper, 2016 and worked in an editorial capacity at both News corp (Dow Jones) and JBN. She also has experience as a content creator, strategist and brand editor for various financial institutions and banks.