Buying and Selling Cryptocurrencies
How to Buy and Sell Cryptocurrency
The first step is to choose a platform and create an account for cryptocurrency trading. Depending on the platform, you may or may not need private and public keys to conduct a trade. For example, you do not need keys to buy and sell crypto on cryptocurrency exchanges — they abstract access by giving you a username and password and hold your crypto (i.e., your keys) as custodians unless you decide to withdraw your crypto to a personal wallet.
At that point, they deliver your keys to you. Buying or selling crypto from an independent wallet requires both public and private keys to complete the transaction.
The actual method of buying or selling crypto has greatly simplified over the years and depends on the processes in use at a specific platform. Most cryptocurrency exchanges follow procedures similar to legacy trading platforms.
Therefore, the first step is to transfer or deposit money into your trading account. Then, you can initiate a trade by entering the type and quantity of assets you want to buy or sell.
A Word About Fees
A trading platform’s fees vary based on the exchange. Some exchanges have a variable fee structure depending on the quantity of assets you purchase. Other exchanges charge a service fee plus another fee that’s determined by the volatility of an asset’s price across U.S. crypto exchanges. And there’s a transaction fee that’s based on the number of transactions being handled on the blockchain at the time of your trade.
The more transactions pending on a blockchain, the higher the fees. For example, during bitcoin’s meteoric rise in price in 2017, bitcoin transaction fees skyrocketed to hundreds of dollars, then dwindled to single digits in the following year.
