The cryptocurrency world has grown in popularity in recent years, as more and more individuals invest in it. But what exactly are altcoins? Where can you get them? And how do you market them?
We then go practical, teaching you how to purchase and sell cryptocurrencies on exchanges like Binance and Paxful, with step-by-step instructions for each process stage.
Following that, we’ll go through some of the hazards associated with investing in altcoin trading before wrapping up our opinions on whether or not this form of investment suits you. We’ll address all of these questions and more in this tutorial.
What are altcoins?
Alternative cryptocurrencies to Bitcoin are known as altcoins. They are sometimes referred to as “cryptocurrencies”, “digital coins”, or “crypto tokens.” The term “altcoin” is a combination of the words “alternative” and “coin.”
Altcoins are a type of digital asset (i.e., virtual currency). Ethereum, Litecoin, Ripple, Monero, and more than 22,904 (as of March 2023) additional cryptocurrencies are now accessible on various exchanges across the world.
Learn more about altcoins in this comprehensive article.
Where can I buy altcoins?
Altcoins may be bought in a variety of ways. You can do this through brokers, ATMs, and cryptocurrency exchanges.
- Crypto exchanges are online marketplaces where users may buy and sell cryptocurrencies in exchange for other digital currencies or fiat money. KuCoin, Binance, Coinbase Pro (previously GDAX), Kraken, and Bitstamp are some of the most well-known cryptocurrency exchanges.
- Crypto brokers: These provide a similar service to crypto exchanges but normally do not take fiat currency deposits such as bank transfers or credit cards; instead, they only accept deposits via cryptocurrency wallets such as those provided by Bitgo and others. eToro and Xtrade are two examples.
So, how do I buy altcoins?
You can buy altcoins, such as Ethereum, on exchanges, which are websites that let you swap cryptocurrency for other cryptocurrencies. There are several types of exchanges, but the majority follow the same fundamental steps:
Step 1. Decide on how much you want to invest in the altcoin
Before you begin buying altcoins, you should consider how much of your portfolio will be devoted to this new asset class. Several things will influence this decision:
- The total size of your portfolio
- Your investment time horizon and risk tolerance
- How much time can you dedicate to researching the various cryptocurrencies available?
Step 2. Research for the most promising altcoins available
Before you begin purchasing cryptocurrencies, you should conduct extensive research on the numerous possibilities on the market. Websites like as CoinMarketCap and CoinGecko may help you learn about different currencies and their market capitalization, trade volume, and historical data.
Check for the potential of each altcoin based on these factors:
- Team and developers: Evaluate the trustworthiness and experience of the project’s team.
- Use case: Examine the coin’s real-world uses and prospective demand.
- Understanding the underlying technology and how it differs from other initiatives is important.
- Check the size and participation of the community that is supporting the project.
- Partnerships: Look for strategic alliances or collaborations with well-known corporations or organizations.
Step 3. Create a cryptocurrency exchange account
After you’ve decided on an exchange, the following step is to open an account. You must provide some basic personal information and establish a password (or use 2FA).
It’s time to start trading now that your account has been established and activated! The processes are the same for all exchanges: Choose a cryptocurrency pair (for example, BTC/ETH) or a fiat currency pair (for example, USD/ZEC) that interests you.
Then enter the amount of money you wish to purchase or sell. Specify whether or not there are any fees involved; verify everything before confirming; wait for confirmation through email/SMS message from both parties involved in the transaction (this may take several minutes); and then enjoy seeing those cryptocurrencies arrive in their new home.
Step 4. Select the right exchange
You’re on the correct track. You’re ready to acquire some cryptocurrencies, but where should you start? There are several exchanges available, each with its own set of advantages and disadvantages.
Here are some things to look out for before choosing the right crypto exchange:
- Credibility: Reading evaluations from other customers is the greatest method to check if an exchange is credible. It’s also advantageous if they’ve been there for a while (since exchanges come and go). Customers that have a strong reputation have had pleasant experiences trading with them in the past, which implies fewer issues when attempting something new, such as buying altcoins.
- Fees: This one is simple, the smaller the percentage charge per trade or deposit/withdrawal transaction size, the better! A low-fee exchange will save money over time because of lower overhead expenses related to running their business (and thereby passing those savings on to us).
Step 5. Pick a currency trading pair
The final step is to select a currency pair. Several exchanges provide hundreds of cryptocurrency trading pairings. The most common are:
- BTC/USDT (Bitcoin / Tether) – This is the most often used pairing since it allows you to exchange fiat money (dollars or euros) for cryptocurrencies at any time without having to wait for bank transfers or other delays. You may also use USDT as a reliable store of value when the price of Bitcoin swings too much for your liking.
- ETH/BTC – Since its inception in 2015, Ethereum has been one of the top cryptocurrencies owing to its smart contract capabilities and ability to run dApps on top of its blockchain network. If you want to know the ETH price in a certain currency combination, you may utilize websites like CoinMarketCap or CoinGecko.
Step 6. Perform the trade
After you’ve input all of the necessary information and selected “Buy,” the following step is to wait for the network to authenticate your transaction. Depending on how busy the network is, this might take anything from a few seconds to many hours, so be patient!
Once your transaction has been verified, you may view its status by clicking on it in your account history or by visiting https://blockchain.info/tx/[transactionhash]. This page will tell you whether or not it was a success; if it was, congratulations! Your cryptocurrencies have arrived and are available for usage (or trading).
Step 7. Check that the altcoin is available in your wallet
Access your crypto wallet, which is where you save your cryptocurrencies. When you’ve opened your wallet, search for the part that shows your balances. This section typically includes all of the cryptocurrencies you possess, including altcoins, as well as their relative amounts.
If you have a large number of cryptocurrencies in your wallet, you can use the search tool (if it is available) to locate certain altcoins. Once you’ve added the cryptocurrency to your wallet, it should show you your balance, if you have one.
How do I trade my altcoins?
To sell your altcoins, first, go to the exchange where you purchased them. Once there, navigate to the sale tab and choose the altcoin(s) you wish to sell. Enter the number of coins or tokens to be sold, then click “Sell” or “Confirm” to complete the transaction.
Conclusion
To summarize, buying and trading cryptocurrencies may be a fascinating and possibly rewarding business, but it is critical to proceed with prudence and expertise.
Conduct an extensive study on the project, team, technology, and prospective use cases before investing in any cryptocurrency. Keep up with market movements and news.
You may navigate the world of altcoins and perhaps find success in this dynamic and fast-paced market by following these suggestions and practicing patience and discipline.