Are you buying your first crypto and looking for useful tips?
I had been there myself. I know exactly how it feels. On one side you are excited to try out crypto investing. You’ve heard others making good money from cryptocurrency. On the other side, you’re worried as it seems like a totally different type of investment.
In this post, I’ll share 8 helpful tips to help you get ready as a first-time crypto buyer.
Table of Contents
- Why do you need to know the tips before buying your first crypto?
8 tips before buying your first crypto
- 1. Get ready for a reliable crypto account
- 2. Prepare your crypto fund
- 3. Aware of the deposit and buy crypto option
- 4. Take note of the withdrawal option and procedure
- 5. Aware of the fees and charges
- 6. Take note of the transaction timeline
- 7. Only make a deposit from your own account
- 8. Try out with the minimal amount
- Final thoughts
[Disclaimer: I am not a certified financial planner. My sharing is purely based on my own research and personal experience. To make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a certified financial planner if necessary]
Why do you need to know the tips before buying your first crypto?
Cryptocurrency (crypto) is a unique alternative investment. Compare to other types of investment, it’s rather hard to understand because you can’t see them physically.
In a simple explanation, cryptocurrency is a virtual currency that only exists as data. It is based on modern cryptology technology that comprises codes and mathematical rules.
You’ll need to experience buying cryptocurrency yourself to know how it works. Alternatively, you may read experiences shared by others (like what you are reading now).
Below is a list of how these tips can be helpful for first-time crypto buyers.
Better prepare yourself for your crypto journey
These tips for first-time crypto buyers listed down the important things to take note of before buying your first crypto.
The tips shared here are based on real experience. So, you’ll know what to expect along the way. And hopefully, you can start your crypto journey with confidence.
Reduce your risks of crypto investing
Among the tips mentioned in this guide are common cryptocurrency mistakes to avoid when you are performing your first crypto trade. Avoiding these mistakes could help you to reduce your risks of crypto investing.
Maximize your crypto-investment
This crypto buying guide for newbies also highlights the opportunity that can be easily missed out on by first-time crypto buyers. Such as registering your crypto account through a promotional code to be eligible for a sign-up bonus of free cryptos.
Over the long run, these welcome bonuses could help to maximize your crypto investment.
8 tips before buying your first crypto
My cryptocurrency journey started in 2017.
Prior to my first Bitcoin transaction, I had no experience at all except reading a bunch of articles about Bitcoin. With each transaction, I gained new experiences. Along the way, I made some mistakes too.
Each time I encountered a useful tip, I jot it down in my notebook. Not only for my future references but also to share with my readers on The Money Magnet.
Here are my 8 tips to help you as a first-time crypto buyer (don’t miss out on the last tip).
1. Get ready for a reliable crypto account
Firstly, register for a crypto account so that you can start your cryptocurrency investment whenever you are ready to do so.
Preferable a crypto account that is approved by your local authority. Because you want to have peace of mind with your crypto investment. And you want to avoid issues such as situations where your crypto account is inaccessible.
In Malaysia, choose to register with crypto platforms that are approved by the Securities Commission Malaysia (SC). I highly recommend Luno Malaysia. Not only does it come with a generous signup bonus but you get to enjoy great global features that can help you optimize your crypto investment.
Below are the reasons why you need to get ready your crypto account as early as possible:
- It is free to register for a crypto account. There’s no registration fee.
- You can explore and play around with the features to get familiar with the platform.
- Some crypto exchanges could take up to a few working days before they approve your crypto account. (As crypto prices move fast, you want to avoid the situation where you see a great buy the dip opportunity but your crypto account is still in the process.)
If you haven’t signed up for a crypto account, register for Luno Malaysia now and redeem the Luno promo code worth RM50 in Bitcoin.
2. Prepare your crypto fund
Secondly, get ready with an amount you are comfortable starting with. Make sure the amount is something you are willing to lose (because cryptocurrency is highly volatile).
By saying willing to lose, I didn’t mean you just let it drift. Since the beginning of my crypto journey, I told myself that I am going to make the best of the amount that I am willing to lose.
Even if I lose it, I’ll make sure I learned a valuable lesson from it.
Back in 2017, I bought my first crypto through the Remitano platform, 0.0205 BTC with RM708.42. I share the screenshot of my first crypto transaction below.
In 2017, there were limited reliable crypto platforms. And the minimum purchase was quite high. Thus, I ended up with RM708.42 for my first crypto purchase.
As for you, you may start your first crypto purchase with any amount you feel comfortable with. Take note of the minimum purchase requirement.
And please don’t compare with others because everyone is unique and different. Prepare the amount based on your own financial situation. You can always invest more along the way.
You may also read more about the importance of allocating your savings mainly for cryptocurrency in my other post on Investing in Cryptocurrency for Beginner: 6 Important Considerations.
3. Aware of the deposit and buy crypto option
Next, before buying crypto for the first time, make sure you know the deposit and crypto buying options of your preferred crypto exchange.
Pay attention to the below details:
- What is the deposit option? Is it through a Bank transfer or an Instant transfer?
- Bank transfer might require several hours (depending on the exchange) before your deposit is reflected in your crypto wallet)
- What is the minimum deposit amount?
- How about the minimum crypto purchase amount allowed?
If possible, choose a crypto exchange with multiple deposit options, especially Instant Transfer. Because you can only perform your transaction when the money is reflected in your wallet.
And it would be great if the crypto exchange has a low minimum deposit and low minimum crypto purchase. For example, the minimum deposit for the Luno exchange is RM10 and its minimum crypto purchase is RM1.
The low deposit and crypto purchase allow you to start your first crypto purchase with a small amount.
4. Take note of the withdrawal option and procedure
Another thing that you want to take note of as a first-time crypto buyer is the withdrawal option and procedure.
Be aware of the things such as:
- the minimum and maximum withdrawal allowed
- withdrawal charges
- the withdrawal timeline (how long does it take for the deposit to be reflected in your bank account?)
Whenever possible, opt for a crypto exchange with:
- low minimum withdrawal per transaction
- high total withdrawal per month
- low withdrawal charges
- short withdrawal timeline
So that you can make a withdrawal even with a small amount within a short period of time.
5. Aware of the fees and charges
Crypto exchanges charge fees for using their platform. It would be wise to check out the fees and charges before using the crypto exchange.
Take note of fees and charges such as:
- Deposits fees
- Withdrawal fees
- Service charges for buying or selling crypto either directly from the wallet or through its exchange
- Charges for sending crypto to other crypto wallets
Fees can play a significant role in returns on investment. Thus, look for a crypto exchange with a competitive fee structure.
6. Take note of the transaction timeline
As you are depending on the crypto exchange to buy or sell your digital assets, it is important to know the timeline for each transaction.
Before proceeding to your first crypto purchase, you may want to know the answer to these questions:
- How long does it take for the deposit to be reflected in your crypto wallet?
- When the withdrawal amount will be available in your bank account?
Personally, if I am ready to buy the crypto and I need to make the deposit, I would use Instant Transfer. Because crypto prices fluctuate fast, they can go up or down drastically within minutes.
Do take note that for deposits through Instant Transfer, some crypto exchanges might charge a fee.
7. Only make a deposit from your own account
In Malaysia, crypto exchanges approved by SC only accept deposits from your own bank account. This is due to the Anti-Money Laundering guidelines.
So, your bank account name and crypto account name must be the same. Deposit from a third-party account is not allowed, including a business account.
Transactions or deposits made from bank accounts other than your name (including sole proprietors) will be rejected. And there’s a fee involved to refund the amount to you.
I am going to share a real example. In 2021, my husband accidentally made his first deposit to Luno from his business account. Immediately he received a notification mentioning his deposit was rejected.
Then, he realised that he made the transaction from his business account. It took him about one week before he got back the refund with an admin fee charge.
Avoid this mistake from happening. A simple mistake like this could:
- delay your crypto purchase
- require an admin fee for the refund process
- waste your time to follow through the refund the amount
I find that this can be easily solved when you choose to deposit the minimal amount first before depositing more money.
8. Try out with the minimal amount
Lastly, I encourage you to try out the whole buying process with the minimum purchase amount. The objective is to experience the buying process yourself.
Try out early so that you can learn the crypto buying procedure early. You’ll know what to expect. As you completed each transaction, you’ll be more experienced and have more confidence in your future crypto purchase.
The first time buying crypto can be an exciting experience. It opens up the opportunity to gain access to a new technology that could change your personal finance.
I hope my sharing above has highlighted the important tips for a first-time crypto buyer.
If you ask me, I would say I have a better picture of how cryptocurrency works after I register for a crypto account and completed my first crypto purchase. Thus, I encourage you to do the same (buy the minimum amount) and experience it yourself.
Don’t forget to get the promo code or referral code such as the Luno promo code (RM50 in Bitcoin) before you make your first transaction.
Any other things you wish to know as a new crypto buyer? Please leave your comment below. I’ll try my best to answer.
Featured Image by sergeitokmakov from Pixabay
All screenshots were taken by the author