A Guide to Getting Started with Cryptocurrency Trading
Over the past few years, Bitcoin and other cryptocurrencies have gone from being something that only a select few people were interested in, to something that an increasing number of people around the world have begun investing in. Bitcoin was the first cryptocurrency to be introduced, having been around since 2009. Each Bitcoin was initially worth less than $1, but today, after a lot of investment, one Bitcoin is now worth tens of thousands of dollars. And, it is showing no signs of slowing down and is only expected to grow even more in value over time. The rise of Bitcoin has also led to the increasing popularity of many other cryptocurrencies such as Ethereum. Since Bitcoin and other cryptocurrencies are easy to invest in with more and more accessible options for investors becoming available, it’s no surprise that it’s becoming a popular choice for many people who want to invest. Here’s what you need to know if you want to get started with investing in Bitcoin or other cryptocurrencies.
How to Purchase Crypto
The best place to purchase cryptocurrencies such as Bitcoin and Ethereum is from a trustworthy, reputable cryptocurrency exchange. There are several different crypto exchange options to choose from with some more well-known than others such as Binance. The best way to choose an exchange is to consider your personal needs and requirements for trading cryptocurrency and choose an exchange that fits this the closest. Gemini and Crypto.com are also popular options with beginners since the process of buying crypto is straightforward and you can do it using your regular fiat currency on a handy mobile app. Some other factors to keep in mind before you choose the right exchange for you include the security, fees charged, withdrawal and deposit limits, customer service availability and more.
Options for Buying Cryptocurrency
When it comes to investing in cryptocurrency, you can find exchanges that allow you to purchase it with regular fiat currency such as Canadian dollars, and others that allow you to buy cryptos with other cryptocurrencies. If you want to use Canadian dollars to buy Bitcoin or other cryptocurrencies, a fiat-to-crypto exchange will allow this. Most of the popular exchanges that are aimed at beginners will offer this option. You can simply pay using your credit or debit card. On the other hand, if you already own a cryptocurrency and want to trade it for another, or are considering the option of doing this in the future, then you’ll need a crypto-to-crypto exchange. Some fiat-to-crypto exchanges offer this option while others do not.
Getting a Cryptocurrency Wallet
No matter which cryptocurrency you are planning to buy or how much of it, storing your coins in the exchange that you use is not always a good idea. This is because while the coins are technically yours, you do not completely own them when they are stored in the exchange, and there are some risks that could lead to you losing them, particularly security risks around cybercrime. To keep your coins safe, it’s a wise idea to get a separate cryptocurrency wallet that you can use to store them. You can usually do this easily with several options to consider including cloud-based and hardware wallets where you can transfer your cryptocurrencies from the exchange in just a few clicks.
Paying Tax on Cryptocurrency
Investing in Bitcoin and other cryptocurrencies can be anything from a hobby you do in your spare time to a serious investment to build your wealth over time. However, whether you are a casual or more serious investor, it’s important to keep paying tax in mind. In Canada, trading cryptocurrencies comes with a range of different regulations and rules, and it’s important to understand these and how they work before you begin trading. Cryptocurrencies are treated as a commodity rather than legal tender in Canada. Traders are usually liable for both income and capital gains taxes. You can find out more about Canadian cryptocurrency tax at Wealthsimple. Wealthsimple offer a range of advice and handy tips to help crypto traders get started with all the basics and more covered, along with a range of investment products and services that you might be interested in.
What are Some of the Top Reasons to Invest in Cryptocurrencies?
More and more people are deciding to invest in crypto as they see it as the future of finance. In addition to this, cryptocurrencies are becoming easier to invest in, with easy apps available that you can simply download to your phone or tablet to get started. Some of the main reasons why an increasing number of people have decided to start crypto trading either as a hobby or a serious investment include:
Cash is On the Way Out:
Experts believe that paper currency is going to be a thing of the past much sooner than we think. We have already begun to see more businesses reduce their cash payments and switch to contactless payments and card payments over the past eighteen months as a result of COVID-19. Over the past few years, cashless payments have become the preferred option for a growing number of customers with lots of us preferring to use digital payment wallets and card payments rather than paying in cash. Experts believe that the next step will be a complete transfer over to using digital currencies.
When it comes to making online transactions, the fact that you are often able to remain completely anonymous means that cryptocurrency is a very secure option to consider in comparison with others. In a world where theft of consumer data and other data breaches seem to be happening all the time, cybersecurity is struggling to keep up in a world that’s becoming more and more reliant on cashless payments and online financial transactions. On the other hand, paying with cryptocurrency could offer one of the most viable solutions to this problem, with more reliance on math and science rather than human IT professionals to ensure that financial information is secured.
Rise in Crypto Payments:
While paying for goods and services with cryptocurrencies is still not as mainstream as other forms of payments such as card, digital wallet and even paper cash payments at the moment, an increasing number of businesses have started to welcome customers who want to make payments in cryptocurrencies such as Bitcoin. In Canada and many other countries worldwide, you can find a growing number of digital-first companies that allow customers to pay directly with cryptocurrencies, suggesting that they are at the front line of making the transition to a world where making payments with cryptocurrency is accepted everywhere.
When it comes to making investments, many new investors want a flexible option – and cryptocurrency provides the perfect one. Bitcoin and other cryptocurrencies have a high level of liquidity meaning that it is easy for you to make transactions in seconds without the need to wait for the demand to match your offer. Along with this, cryptocurrency trading often differs from other investments types such as stocks and shares as the crypto market is open 24/7 making it easier for you to trade at any time that is the most suitable for you.
With cryptocurrency a form of decentralised finance or De-Fi, it is not possible for anybody to take your digital property away. This differs from fiat currencies such as the Canadian dollar, which are actually controlled by financial institutions such as banks. Although it may not be a common occurrence, anybody with a bank account has actually signed a contract agreeing that the bank is able to refuse service for any reason that they might see fit, which could include denying access to all your money. On the other hand, there are no possible situations where you might end up blocked from using your funds with cryptocurrency, making it an ideal alternative.
It’s Open to Anybody:
When it was first introduced back in 2009, only the most tech-savvy people were able to invest in Bitcoin and make money from it. In the early days, you would have needed to have the skills to program your own cryptocurrency wallet. However, things have changed a lot since then and investing in cryptocurrencies has no become more accessible to anybody. Regardless of your tech expertise and skills, you can start investing in Bitcoin and making money from it with a wide range of user-friendly and easy apps and platforms that can be accessed in minutes. As long as you have a suitable device that is connected to the internet, pretty much anybody is able to get started with investing in cryptocurrencies.
If you have heard a lot of good things about investing in cryptocurrency, there’s no better time than the present to get started. This is because crypto investments might be set to change in the future, as there has been no transparent regulation of the crypto market so far, deterring the bigger investors who need a clear legal framework from taking advantage. As soon as regulations are put in place, the big investors are likely to jump straight in – which will ultimately raise the price of many cryptocurrencies.