Sometimes the hardest part of buying cryptocurrency isn’t deciding which coin to buy, but How buying it in the first place. Despite the general acceptance of crypto, the purchase process can still be confusing due to the variety of platforms, technical jargon and outright scams that make it difficult to know which options are safe.
But by choosing a service that includes financing, buying and storing, you can buy crypto without leaving a single platform. For some beginners, that is the most effective way to start. Read on to learn about your options and their potential challenges.
The easiest way to buy crypto today
For many people, the easiest way to buy crypto is to use an all-in-one platform that allows you to deposit money, buy crypto and store it in one place. These platforms generally fall into one of three categories: payment apps, brokerages and centralized crypto exchanges.
Payment apps are designed for sending money or doing everyday tasks, but a few of them, including PayPal and CashApp, also let you buy crypto. You can buy crypto in minutes using a linked debit card or bank account. The trade-off is that these apps support a limited number of digital assets and often charge high fees.
Brokerages like Robinhood and SoFi include crypto alongside traditional assets, offering them as part of a broader investment strategy. If you already use one of these platforms to trade stocks or exchange-traded funds (ETFs), adding crypto can be a seamless experience. But while this approach makes it easy to track your investments, brokerages – like payment apps – often limit what you can do with digital assets to buy and sell. For example, they generally do not support crypto-to-crypto trading or crypto staking.
For both payment apps and brokerages, transferring your crypto off the platform and into an external wallet is often difficult or restrictive. That means you may have less flexibility if you want to try active trading or decentralized finance in the future.
Centralized exchanges – such as Coinbase, Kraken and Crypto.com – provide a complete crypto experience within a single platform. These platforms are designed to buy, sell and hold digital assets, so they often support a wide range of coins and features, such as crypto staking and lending. Most of them also have an easy onboarding process and an intuitive interface to attract beginners.
Compared to payment or brokerage applications, centralized crypto exchanges can be a little more complex, but they tend to offer greater control over your assets and lower fees in return.
The main advantage of all three methods is integration. You can go from depositing to owning crypto without switching platforms. To choose between them, consider how much control you want, how many properties you want to access and how much you’re willing to pay in fees.
Buying crypto in one place
Once you have chosen a platform, the actual process of buying crypto is simple.
Start by creating an account and verifying your identity. This step is required by regulated trading platforms and usually only takes a few minutes. Next, you will need to connect the payment method. Many platforms allow bank transfers; some also support debit or credit cards.
Once that’s done, select the cryptocurrency you want to buy. Bitcoin and ether, the cryptocurrency that powers ethereum, are the two most popular and largest cryptos by market cap. Enter the amount you want to buy and review the transaction details while keeping a close eye on the fees and the final price you receive.
The crypto will appear in the built-in wallet of your account after confirming the purchase. You can leave it there, avoiding the extra step of transferring it to an external fund unless you want more control over your assets.
Pros and cons of using a single crypto platform
Using a single platform streamlines the process of buying cryptocurrency because you don’t have to transfer funds between services, manage multiple accounts or navigate unfamiliar tools. For starters, that can make a significant difference.
The biggest trade-off is that when you store your crypto in one place, you trust a third party to protect your assets. This is known as custody risk, and is why many crypto investors end up getting a wallet.
When you buy crypto from an exchange or trading app, the platform stores it in a wallet it directs. This means it has control over your private keys (the alphanumeric code that places your assets on the blockchain).
If the platform that holds your keys suddenly collapses, your crypto will likely be temporarily inaccessible – like what happened when FTX filed for bankruptcy in 2022 – or it could be lost forever. And if hackers gain access to the platform, they may make off with your keys and your funds.
These issues can be mitigated by choosing a platform that has a strong track record of protecting user assets and regularly auditing its code and funds. However, for new crypto investors, the reduced complexity of using a single platform can outweigh the downside.
More from Mali
The best Crypto exchange
A simple guide to buying and holding Crypto
Common Questions People Ask Before Buying Crypto
