This section is all about how to to get started buying Cryptocurrency with FIAT money.Moving money from the established banking system into the world of Cryptocurrency is the first, and often most confusing step, to buying, selling and trading crypto.
It is relatively easy to move money into the crypto space, with consumer level intermediaries accepting credit and debit card payments with instant transfer, though they may charge fees or a percentage above the rate at which the Cryptocurrency can be bought on an exchange. Moving money back out from crypto to a FIAT bank account can involve more in security, proving identity, delays and more fees.
Initially getting an account with some of the major exchanges can involve a verification process that can take a week, or even longer for some, to be able to transfer funds into an account and use it to buy cryptocurrency. There can be an even more in depth process of KYC (know your customer) for withdrawing funds, and it is becoming common for transferred funds to be locked for a short period to ensure security. Coinbase has recently introduced a period of five days in which newly transferred funds can not be transferred out again, though they can be used to buy and trade crypto immediately.
There are moves being made to make buying cryptocurrency as easy as buying an online book with the introduction of integrated payment via credit card into software wallets, such as the mobile app based Button Wallet, that will allow users to purchase crypto easily within the app itself.
Buying Crypto with GBP
Getting into the cryptocurrency world with US Dollars is relatively easy, with a lot of options. For UK based investors and traders with GBP as their FIAT currency the options are much more limited. One route to converting GBP to Bitcoin is the Binance Jersey company which facilitates the transfer of GBP or EUR and buying of Bitcoin (BTC) or Ethereum (ETH) which can then be transferred to the main Binance exchange or elsewhere. Use this link to sign up with Binance JE.
What Cryptocurrencies can you invest in and trade? Since the launch of Bitcoin in early 2009 there have been thousands of other digital tokens based on blockchain technology. They are usually the means of exchange built into a project aimed at providing some real world use such as validating transactions and provide security. Some have become major currencies such as Ripple (XRP), Ethereum (ETH) and Litecoin (LTC), while many other projects, and their associated coin, have failed to obtain traction.
Two of the best websites to view a complete list of Cryptocurrencies ordered by market cap and trading volume are coincap.io and CoinMarketCap. Both sites provide links to the associated website of the coins project so more detailed information can be found to help with assessing the potential of the coin and the project.
Some other good sources of review and information about Cryptocurrency projects and the coins can be found at:
Bitcoin is the first and most well known of the cryptocurrencies, and many believe it will stay at the forefront of value, being compared to a digital 'gold'. It currently has over 50% of the crypto market capitalisation and dominates the overall market.
Coins such as Tether (USDT) are known as stable coins because they are backed by a FIAT currency (USD) on a one to one basis and are thus tied to that currency. On exchanges that don't offer FIAT trading pairs (USD, EUR, GBP etc) then a stable coin provides that facility.
Everything else apart from Bitcoin and the stable coins is known as an alt coin or altcoin (alternative coin). There are many thousands, some of very dubious origin or use, but the major alts such as Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), EOS (EOS) and Binance Coin (BNB) have huge market caps in the billions of USD and can be considered as worthwhile as Bitcoin for long term investment or trading.
Cryptocurrency News & Opinion
There is no shortage of opinion, review, analysis and news reporting in the world of crypto. Everyone has an opinion, and it's usually different to the next person. One will write convincingly, using technical analysis and market data, that Bitcoin is about to crash into the crypto abyss, while another will use the same data to argue it is about to moon past $20k. As with all matters it's best to read widely and then form your own opinion.
An excellent place to start with the latest crypto news is actually the charting website TadingView. Once a trading pair is selected. BTCUSD for example, then the right hand bar has a Headlines section that is updated regularly throughout the day. This has links to the latest news articles being published and is a good place to find publications on crypto with a wide range of topics. Some are listed below.
Where do you go to buy and trade cryptocurrency? With the internet and online world comes connectivity to a vast range of digital applications via a web browser or mobile app. A Cryptocurrency Exchange is basically a website with sophisticated software in the background that runs in the browser, or mobile app, to facilitate the buying, selling and trading of cryptocurrency.
Exchanges vary in the exact features they offer, above the obvious ability to buy and sell cryptocurrency. Currently there are over 18 thousand markets (trading pairs) available, on over 250 exchanges listed on CoinMarketCap. Important features for trading should include good charts with built in indicators and drawing tools, market orders, limit orders, and stop loss orders, and clear views of the order book and open trades.
Top Crypto Exchanges
Even though there are over 250 cryptocurrency exchanges listed on CoinMarketCap many of them will have very small trading volume or availability of trading pairs (or both), and may be questionable in security, or the ability to recover funds transferred to them. The lower the trading volume on an exchange the harder it is to get limit orders filled for both buying and selling, and the effective spread (the difference between the bid and ask price) could be large.
The top few crypto exchanges have daily trading volume in excess of $2 billion and over 400 markets (trading pairs). The top exchange overall, and one of the best known, is Binance (sign up here) with $2.5 billion in daily trading volume and 486 markets. with HitBTC the largest in number of markets at 795 and $1.4 Billion in daily trading volume.
Full, up to the minute lists with rankings against daily, weekly and monthly volume, and trading pairs or markets, can be found online at:
How to trade cryptocurrency? Simply put it is the same as any asset in that the trader will want to buy low and sell at a higher price. Sounds simple enough in the world of cryptocurrencies, and where prices can go up rapidly, easily 10-20% in minutes, or 50-100% over a day or two, it should be easy to simply buy some cryptocurrency and wait a while, selling once it makes a substantial gain. But crypto can also go down rapidly by the same amounts, and stay at a lower value for a long time, so it is also extremely easy to lose money!
Trading Cryptocurrency is not for the inexperienced, or novice trader in financial markets. Nor is it for those not willing to take risks with their money and to spend the time learning how to manage trades so as to reduce that risk. It is good advice, widely found in all the literature on trading, that you should never risk more than you can afford to lose. Trading isn't gambling, but it can take a lot of time and effort to learn how to manage the risks and preserve the trading capital, and while learning it is very likely you will lose some money, and hopefully make some. Learning to trade crypto is about discipline, risk and money management, as much as predicting the next price move.
Cryptocurrency Trading Pairs
Whenever a pair of cryptocurrencies is offered for trading on an exchange the Ticker Symbols are shown in a similar form, for Bitcoin to buy Ripple, to BTCXRP, or BTC-XRP, or BTC_XRP. The symbol to the left is called the Quote currency, which is what is used to purchase, and the price quoted of, the Base currency to the right side. So with BTC-XRP it is the price of Ripple in Bitcoin that is quoted. If the trading pair is USDT-XRP then the price is quoted and traded with USDT (Tether).
Before deciding to purchase a particular cryptocurrency it is important to understand the price as it relates to the historical data, and then to access if the current time is good to buy, or if the price is moving down and waiting a while may be advantageous. Simply buying a cryptocurrency from a consumer website, app or wallet that offers instant purchases for FIAT using a credit card may seem like an easy method, and it may be for some, but it will be difficult to assess how the price being offered relates to the actual price available direct on an exchange, or how the price reflects historical price fluctuations.
Most good places to buy crypto will incorporate a chart of the cryptocurrency historical data, available over different time frames, and up to date within the last minute. Charts are also available on dedicated websites such as TradingView (one of the most popular and widely used), Coinigy or Cryptowatch, via exchanges such as Binance, or in a range of Mobile Apps such as TabTrader.
Once bought the Cryptocurrency that will be used to trade with will most likely have to be transferred to an exchange for trading, such as Binance, unless it stays on the exchange on which it was bought with FIAT, such as Coinbase. With Coinbase it is possible to trade directly with FIAT, such as US Dollars (USD) or Euros (EUR), but most exchanges will only allow trading with Cryptocurrency with Bitcoin being the most used, followed by Ethereum (ETH), stable coins such as Tether (USDT) or alt coins.
It is therefore very likely that transfers of Cryptocurrency for trading will have to be made. The process should be documented fully on the exchange being used, and will include a wallet address (an example would be in the form of 3G5LytFvbAzX7QYAsRa3uGCTywYi0Z7bfv), that must be carefully copied as mistakes in sending can not be reversed! It may be advisable to send a small test transaction first to ensure that everything has been copied and configured correctly.
Technical Analysis (TA)
Technical analysis is the term used to describe the pursuit of using historical price data, shown in charts, to assess optimum entry and exit points for buying and selling Cryptocurrency (and many other assets such as stocks, shares and FOREX). It's not necessarily predicting exact price movements, but the most likely moves in price so that the trader can plan ahead depending on the actual move being made, be that a bounce off support, a break out above resistance, or a move though support down to the next support level. In this way the trader can assess potential risk to reward ratios, and wait for confirmation of the price move before buying. It is of course very much more complicated that that, and whole books and online courses are dedicated to the subject - far more than can be covered here.
One of the most important concepts is that of resistance and support lines where the price has historically responded to a certain level by hitting it and rising above regularly, or reaching it and dropping back. These often form very noticeable patterns that can be seen on multiple time scales, from minutes to weeks, and can be useful in predicting if the price will move to a certain level then change direction, or if it breaks the level then where it might move to, and the extent of that move.