Investors struggle to find ways to invest in what most consider to be the hottest trend to date – cryptocurrencies.
Unlike other currencies, one cannot buy crypto coins through a regular brokerage account. Your local bank is not going to accept Bitcoin in your account. This may change in time to come. But, for now, investors in crypto will need to make use of Cryptocurrency exchanges such as rubix.io for buying and selling purposes.
Even though traditional brokers offer a host of Bitcoin tradeable, the markets are volatile due to high margin requirements. Only very active and experienced investors can make it work for them as relative heavy vetting is needed. Then again, futures are for bitcoin only, which virtually eliminates access to other currencies such as Litecoin and Ethereum.
Having said that, the best method to mitigate exchange risk is to spread your holdings among different trusted exchanges. Each of these has different protocols to do with investing.
One of these exchanges happens to be Coinbase, which is regarded as one of the biggest ones as it boasts a trading volume of well over $20 billion and registered users of more than 10 million. They provide access to Litecoin, Ethereum, and Bitcoin. What is more, they offer access to an active trader platform referred to as GDAX, offering numerous features to the benefit of short-term crypto traders.
It is super easy to set up your trader account and purchase your first cryptocurrency via Coinbase. It is one of the few exchanges that allow the buying of currencies using U.S. dollars.
Your account is set up by clicking through on the signup button. From here, you need to complete the required personal details and agree to the agreement before creating your account.
On receive an account activation request via email, you can select the right option, which is generally an individual account.
It seems amazingly similar to traditional stockbrokers, except for the fact that you are dealing with Cryptocurrency exchanges that are different in many ways.
You would have to enter your phone number so the exchange can use it for a two-step authentication security system to ensure the safety and security of your account.
The minute you get to log into your account, you will be requested to enter a code number that you will obtain from your phone. Also, a username and password. By the way, the text code presents a powerful barrier against hackers.
Following this, you will be requested to verify your identity by uploading either a passport photo, ID photo, or driver’s license.
Then, it is all systems go as you can connect the right funding method such as a bank account, credit or debit card to the newly created account. All funding methods are confirmed employing a small, refundable charge by Coinbase.
Gemini is another favorite exchange that was launched by Winklevoss Twins. Even though you are only allowed to trade with Ethereum and Bitcoin on their platform, they provide FDIC insurance when you have a cash balance. However, once the cash gets converted to digital assets, the insurance falls away.
Another digital currency trading platform of note is Kraken as they offer up to 17 different Cryptocurrencies. The only snag is the extensive approval process that consists of three levels.
The first two is similar in nature to all other exchanges. Sadly, there is not funding allowed via U.S. dollars. The way to transact is first to trade.
To reach the third level, you need first to complete the first two levels, then take a selfie of yourself where you hold a handwritten document with the date written as well as the wording – “for trading with Kraken only” on it.
What is really lovely about this exchange is that one is allowed to make use of the red-hot Ripple. Besides, very few trades make provision for Ripple.
Some of the risks you would do well to consider when trading with Cryptocurrency is that you should only use the money you can afford to lose. You may want to think of it as if you are speculating. Even though it is risky, the potential awards can be huge in the Crypto world.