Key takeaways
- An ideal way to buy cryptocurrency for the first time is through a reputable exchange like Coinbase or Binance.
- Complete the account setup process, including identity verification, before funding your account.
- Use the instant buy feature for simplicity and speed or an advanced order book for the best rates and lowest fees.
- Consider moving your crypto to a self-custody hardware wallet for added security, or start earning more crypto through options like staking.
Making your first crypto purchase is intimidating. There are pages and pages of conflicting information on the internet, anonymous forum threads giving “advice,” and thousands of brands marketing their crypto exchanges.
If you’re not confident about where to start and the process involved, then it’s easy to make a costly mistake with your money.
Below, you’ll find everything you need to buy crypto for the first time, including the key steps, terminology and how to purchase crypto safely.
Steps to buy crypto: Tips for first-time buyers
When you make your first crypto purchase, you might be tempted to find the quickest and easiest way to go about it.
But before you start reaching for your credit card, it is beneficial to get yourself set up with the right decisions and platforms from day 1. This tutorial will give you access to the best rates, safest exchanges and security in the long run.
Step 1: Choosing your crypto
First, identify the cryptocurrency(s) you want to own. It’s a wise idea to start with well-known, established assets such as Bitcoin (BTC) or Ether (ETH). These are coins that millions of people trade on most platforms. Any top crypto exchange will list the biggest assets and have high liquidity, making them easy to buy and sell at any time.
Step 2: Picking the best platforms to buy crypto
The most significant decision you need to make is selecting the right platform to buy crypto. It’s easiest to start with trusted centralized exchanges (CEXs). These are built and operated by recognized organizations that provide a wide range of features, customer service and even built-in custodial crypto wallet storage.
Global exchanges like Coinbase or Binance are suitable for most users. However, there can be geographical restrictions based on local licensing regulations. So, if you want to use another platform, make sure to research its history, security and track record in the industry.
This guide uses Coinbase as an example, but other major exchanges follow a similar setup and process.
Step 3: Creating an account
With your chosen centralized exchange, you’ll need to create an account. This is a straightforward process, similar to signing up to any secure financial platform.
Follow the user-friendly signup process, which requires personal information, including name, address, phone number, a robust password and more. It’s recommended to activate two-factor authentication (2FA) to double lock your account with a secondary device.
On Coinbase, head to https://login.coinbase.com/signup
Step 4: Verifying your identity
During the signup process, you’ll need to verify your identity. Crypto regulations in many countries require exchanges to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
To pass these checks, you must upload a valid government ID — a passport or driver’s license — and a current photo of yourself (most often a selfie). There might also be questionnaires about the source of your funds and investment experience. Answer honestly and accurately to avoid your account being rejected or locked in the future.
Notably, it can take 24–48 hours for an account to be verified before you can start buying crypto.
Step 5: Funding your account
To get the best rates on your purchase, it’s advisable to deposit fiat currency, like dollars or euros, into your exchange account. While there are credit card functions available, the exchange rates and extra fees can make this an unattractive option.
Navigate to the deposit area of your account. Select the currency, payment type and amount to deposit. Then, follow the simple deposit process.
Did you know? The top crypto exchanges have trading volumes totaling billions of dollars with digital assets every day. Binance and Coinbase both regularly facilitate over $10 billion in a 24-hour period.
Now that you have a verified and funded crypto exchange account, you can get to the fun part: buying your first crypto.
Step 6: Choosing your trading method to buy your chosen crypto
Exchanges like Coinbase offer two main buying options. You can use the instant buy feature or a traditional order book exchange.
1. Instant buy
The instant buy feature is the simplest way to purchase crypto, although you will be subject to a larger fee and spread on your purchase, so you won’t get the exact market rate. The quoted price will be higher than the market trading price.
On Coinbase, use the buy/sell feature on the sidebar. Select the crypto and the amount. You can switch between fiat and crypto selectors for the amount to buy.
The exchange gives you an overview of the purchase order to confirm. Once confirmed, the crypto is deposited into your exchange wallet.
2. Order book trading
The advanced order book allows you to buy crypto directly from other sellers. You can set orders reflecting the current market value to get the best rates.
Click the “Advanced” toggle on the left-hand toolbar to open the trading area.
Next, you need to select your trading pair. For example, to trade US dollars for Bitcoin, you need to select the USD/BTC trading pair. You’ll see a long list of buyers and sellers with the price they want to trade.
Use the right-hand toolbar to place your order. Select the crypto you want to buy and input the amount. You can switch between fiat and crypto selectors for the amount to purchase. Then you can select market order to execute the trade at the live market rate automatically.
The order should be filled instantly on a high-liquidity asset like Bitcoin or Ether. Once complete, the crypto will show in your exchange wallet.
Did you know? It is estimated that there are more than 20,000 cryptocurrencies in existence, although many are inactive, discontinued or hold no real value. The accessibility of blockchain technology makes it easy for anybody to create a new cryptocurrency.
After your crypto purchase: What’s next?
If you’ve bought crypto, you might be wondering what’s next. Well, you can just leave it in your exchange account as an investment.
However, it is not wise to leave large amounts sitting in a custodial exchange wallet/account. If the exchange is hacked, fraudulent, or goes bust, then you could lose your crypto. It’s why millions of crypto users withdraw to a “self-custody wallet.”
Self custody
A self-custody wallet gives you complete control over your cryptocurrency. The private keys are in your possession and not a centralized exchange. You can then secure and use your crypto freely without trusting a third party. For the best balance of functionality and security, use a hardware wallet like Ledger or Trezor.
Did you know? There have been several large-scale crypto exchange hacks and cases of fraud. Mt. Goix infamously lost 25,000 BTC during the first significant hack in 2011 — a stash worth over $2 billion in 2025.
Staking
Staking allows you to put your crypto to work. You can earn interest by locking it to a “proof-of-stake” blockchain like Ethereum. Centralized exchanges offer in-built staking services. You can lock your crypto up and earn interest as a reward.
Trading
You can start crypto-to-crypto trading. This can be helpful to widen your portfolio or even profit from your trading strategy. Continue using the exchange order book to start trading different pairs or even explore decentralized exchanges (DEXs) with a self-custody wallet.
Common mistakes to avoid when buying crypto
Many first-time buyers make avoidable mistakes. Here’s what to watch out for:
- Choosing the wrong platform: Always use trusted and regulated exchanges.
- Neglecting security: Never skip enabling 2FA or leave your crypto on exchanges.
- Ignoring fees: Be aware of hidden fees for purchases, transfers and withdrawals.
Are cryptocurrency transactions taxable?
Cryptocurrency transactions are subject to taxation, and it’s important to stay compliant with tax regulations. Consider the following:
- Capital gains tax: Any profit from selling or trading crypto is subject to capital gains tax. Track your purchases and sales to report accurately.
- Tax reporting requirements: In many countries, crypto transactions must be reported to tax authorities. Keep records of all transactions, including buys, sells and exchanges.
- Tax on staking rewards: If you’re staking crypto, the rewards may also be taxed as income. Ensure you’re aware of laws applicable to your jurisdiction to report your crypto earnings properly.
Can you make $1,000 a month with crypto?
The possibility of earning $1,000 a month with crypto exists, but it comes with significant risks and is not guaranteed.
Some skilled traders and early adopters have managed to earn $1,000 or more per month by leveraging market volatility and employing advanced trading strategies. For example, during bullish phases, day traders or swing traders have capitalized on short-term price swings in Bitcoin or altcoins to generate substantial profits.
Additionally, earning through staking or yield farming on decentralized finance platforms has provided a steady stream of passive income for certain investors.
However, the crypto market is notoriously volatile. During downturns, investors have experienced steep losses — e.g., the dramatic price crash in 2018 led many to see their portfolios diminish rapidly. Moreover, scams like BitConnect and various fraudulent initial coin offerings (ICOs) have resulted in massive financial losses, underscoring the importance of thorough research and robust risk management.
So, while it is possible to make $1,000 a month with crypto, achieving this consistently requires expertise, careful strategy and a willingness to endure substantial risks. Always invest only what you can afford to lose and stay informed about market developments.
Written by Marcel Deer
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.