Interested in learning how to buy bitcoin? The most popular cryptocurrency is now accepted around the world and has a growing number of applications — but you need to know where to go to purchase and store it.
That’s why I am going to coach you through making your first Bitcoin purchase using Coinbase.com.
There are a few rules I want to establish first to make sure that you know what you’re getting yourself into.
- Never buy more than you’re willing to lose. This means don’t cash out on your mortgage, spend your kids college money, or spend any amount of money that you’re not comfortable with losing.
- Don’t fall victim to fear induced trading. You will build up confidence as you become better educated and more experienced. Do not be afraid to HODL (hold on to your funds to ride out a turbulent market).
- Don’t trust anyone! No one is a cryptocurrency “expert”. We are all just speculating and using pattern recognition to try and identify trends. Twitter accounts like John McAfee’s are what is referred to as “Shills” in the cryptocurrency world. A shill is someone getting paid or working for an Initial Crypto Offering / cryptocurrency or someone that is trying to play the market by persuading a lot of people to buy/sell at a certain time for their own financial gain.
Now that we have that out of the way, let’s talk about getting started. The easiest way to buy cryptocurrency like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCC) is by creating a Coinbase account.
Coinbase – Getting started
Once you have created a Coinbase account you will want to buy across all four currencies currently offered. I started out with $200 in BTC, $75 in LTC, and $75 in ETH. That LTC grew from $75 to $330 in just two weeks. That’s when my interest really peaked.
To get the funds faster, you can use your credit card or debit card which will have higher fees, or you can buy from a bank transfer. Bank transfers will take up to 7-10 business days, so if you’re looking to get started right away it’s better to use a credit/debit card.
Securing Your Coinbase Account
You should submit the photographs of your photo identification and set up two step authentication to prevent anyone from breaking into your account and to also make sure that if you get locked out of your account, you can get back in. A co-worker of mine upgraded to a new iPhone and as a result had to redownload his Google Authenticator app. Consequently, he was locked out of his Coinbase account, but because he had gone through the security procedures they reset his authentication and he got back in.
Understanding Your “Wallets”
When you buy a cryptocurrency on Coinbase, it is transferred to your corresponding wallet. So if you were to buy $100 USD in Ethereum, it would appear as .0137051 ETH, (going by today’s exchange rate of $1 = .14 ETH).
If you want to transfer your Bitcoin, Litecoin, Ethereum, or Bitcoin Cash to someone else, another exchange where you can buy altcoins, or to a different wallet, you want to make sure that you always use a wallet for that currency.
An example, say I want to transfer 1.852 BTC to Binance.com so that I can do day trading with it. I will want to go to the the Accounts tab, then under Your Accounts click on Send. That is where I will paste in the address of the Bitcoin wallet I want to send the funds to.
If you send your BTC to an ETH wallet, that money is lost forever. So make sure that you are always sending your BTC to another BTC wallet, ETH to another ETH wallet, and so forth.
How To Avoid Fees When Buying on Coinbase
If you don’t want to pay the ridiculous fees when buying your cryptocurrency on Coinbase, don’t worry – there is a way around it! Yes, you read that correct – you can deposit money into any of the four currencies on Coinbase without paying a penny!
This is something that I learned the hard way, along with many others. This trick alone will save you hundreds of dollars over the course of your new day trading career.
How To Avoid Paying Fees on Coinbase when buying BTC, ETH, LTC, BCC:
- Under the Accounts tab: Deposit funds into your USD wallet. You will want to use the bank transfer, not the wire transfer as there are additional fees associated with this.
- Wait 2-3 Days: Since you’re sending funds from your bank account, it will take two to three business days to go through.
- Exchange your cash (USD) for BTC, ETH, LTC, BCC: You will need an account gdax.com to do this. You can trust gdax, as it’s owned and operated by Coinbase. If you have a Coinbase account, that means you already have one at gdax.com, however they may require some additional identification verification.
- Deposit Funds Into GDAX: Once you’re signed into your account, go to the exchange and click the Deposit button. This is how you move your USD cash from your Coinbase account to your GDAX account.
- Buying BTC Without Fees: Now that you have cash deposited into your GDAX trading account, you can buy BTC, LTC, ETH, and BCC without incurring any fees. From here you can transfer those funds to another cryptocurrency wallet address.
Congratulations, you have officially figured out how to use Coinbase without paying any fees! You’re already off to a better start than me.
Next, you will want to learn how to create an account on Binance.com where you can buy alt coins (coins that aren’t available on Coinbase and have the potential for much higher returns on your investment).
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