In previous lessons, we learned which are the mistakes cryptocurrency investors make so you can be aware of them so you can avoid doing them. We also have learned everything about cryptocurrency wallets, how to download and set them up as well as how to use them.
In this lesson, we will get used to cryptocurrency exchanges and create your first account on a cryptocurrency exchange. You will also learn how to buy any cryptocurrency you want.
The cryptocurrency exchange we suggest is called Kraken.
Kraken is the US exchange founded in 2011 and launched to the public in 2013. As one of the oldest exchanges in the market, Kraken built a reputation for being a safe place for anyone interested in buying and trading cryptocurrencies.
In its history, it’s one of the rare exchanges that has never been hacked which is proof that they’re doing a great job on securing their users’ privacy and funds.
HOW TO CREATE AN ACCOUNT ON KRAKEN
The first step is to create an account on Kraken if you haven’t yet.
Go to kraken.com and click on create an account.
Fill out the registration form, agree to Kraken’s terms of service and the privacy notice and click on SIGN UP.
HOW TO GET VERIFIED ON KRAKEN
Once you created an account on Kraken, the next step is to verify your account.
Click on Get verified.
There are 3 types of verification, starter, intermediate and pro.
For starter verification, you need to provide full name, email address, primary address and phone number. With this verification, you cannot deposit or withdraw any fiat currency.
To use fiat, you will need to get intermediate type of verification which requires to provide ID, photo, and proof of residence. Choose intermediate verification, type in your personal data and click continue.
All sides of your documents should be visible and be careful that the picture is bright and clear. For proof of residence, you can choose between utility bill, that is a phone bill, electricity bill, or any other bill where they can clearly see your name, address and date. It shouldn’t be older than 3 months. You can also choose a bank statement or credit card statement.
That’s it. You will have to wait for a few hours up to a few days for them to review and approve the verification.
If something is missing or something is not okay they will contact you by email.
HOW TO DEPOSIT MONEY TO KRAKEN
As soon as you are Tier 2 verified, you can deposit money to Kraken. The deposit will take up to 48 hours to arrive.
In order to make a deposit, in the menu click on Funding and then choose the currency you want to deposit to your Kraken account.
IMPORTANT: You have to deposit from a bank account that matches the personal information you’ve entered into your Kraken account. When depositing money, you need to enter the correct reference, including Kraken.com at the end.
Deposit an amount to the IBAN account number of Kraken from your personal bank account.
Tip: Experience shows that depositing the same amount twice can slow the second deposit, so we advise you when you decide to deposit multiple times always to deposit different amounts to avoid this slowdown.
HOW TO BUY BITCOIN ON KRAKEN
After receiving your deposit, you are ready to buy Bitcoin.
The first thing you have to do is to click on Trade on the left side and select which one of the available markets you want to trade.
In this example, we will trade the Bitcoin/EURO (XBT/EUR). A short name for Bitcoin on Kraken is XBT instead of BTC. Same as buying, you can use Kraken later for selling Bitcoin back to EUR or any available fiat currency.
After selecting the market you want, click on the new order.
Kraken has numerous trading options and order types. To help keep things simple, I will show you how to use a Market order because it will execute your order instantly.
Firstly, you’ll need to know what assets you would like to exchange, for example buying Bitcoin with your EUR.
After you know which pairs you’ll be trading, you can select them from the drop-down menu near the top left corner while viewing the “Trade” tab.
The first currency in a pair represents the base currency, while the second in a pair represents the quote currency. In a Buy order: you give the quote currency and receive the base currency.
After you selected EUR and XBT, click on the large buy button and you’ll be brought to an order confirmation screen where you can double-check your order. Note that the order confirmation page will truncate the amount of cryptocurrency to spend based on that cryptocurrency’s price precision.
This is how you buy or exchange any cryptocurrency. If you want to buy Ethereum or Litecoin, all you need to do is to change the selected currency pair and repeat the process. Since the most common currency pairs are with Bitcoin and Ethereum, if you want to buy some currency that doesn’t have EUR or USD pair, firstly, you need to buy Bitcoin or Ethereum and then you will be able to buy a token which doesn’t have fiat pairs.
That’s how you buy any cryptocurrency you want.
Make sure to check our next lesson of the course which will give you investing tips and tactics.