The cryptocurrency market can be difficult to understand at first, but once you get the hang of it, you’ll see how easy it can be to make big bucks trading coins. This step-by-step guide on how to create wealth with crypto for only $500 per month teaches you everything you need to know about cryptocurrency trading.
Whether you want to buy Litecoin and Bitcoin or Ethereum and Ripple, the most important thing to do first is to research your options and find the top coins according to CoinMarketCap’s Market Capitalization list. Then look up the value of each coin during its last year of trading.
What Is Cryptocurrency?
The easiest way to think about cryptocurrency is that it’s a virtual currency. Cryptocurrency has been referred to as magic internet money, and for good reason—it allows you to transfer value anywhere in a very easy way, nearly instantly, regardless of where you are or who you’re sending it to. This means that money can be moved across borders almost as easily as sending an email. If any currency would fit under such a definition, it is cryptocurrency. In particular, there are two big names in terms of cryptocurrencies: Bitcoin and Ethereum.
The major difference between these two is that Bitcoin is a payment system, whereas Ethereum is more of a platform for decentralized applications. Although most people just refer to it as Ethereum, which it’s currently branded as; in reality, there are multiple different cryptocurrencies that run off of Ethereum, including Augur and Golem. While these cryptocurrencies don’t necessarily directly correlate with one another in value, they both utilize blockchain technology. The other major advantage of a cryptocurrency over standard currencies such as dollars or pounds is that it has a fixed supply; there will only ever be 21 million bitcoins created (and then halved every 210,000 blocks), and exactly half of those coins have already been mined by users.
Bitcoin and Ethereum are certainly not the only cryptocurrencies, although they may be two of the best known. There are many different kinds of cryptocurrencies, but I believe that all can be split into three different categories: payment systems (such as Bitcoin), platforms for decentralized applications (such as Ethereum), and privacy coins (such as Monero). You can invest in these currencies in a number of ways, from buying them directly in exchange to purchasing them using traditional money and then holding onto them for a long time before selling them. When you buy cryptocurrency through an exchange or brokerage account it will automatically be placed in your wallet which is basically just an encrypted file that allows you to access your funds.
Get A Free Wallet (There are many options)
If you’re going to be investing in cryptocurrencies, you’ll need a cryptocurrency wallet. There are different wallets for different cryptocurrencies. For example, if you’re going to be buying Bitcoin and Ethereum, it might make sense for you to use two different wallets (one for each currency). If you want an easy way to exchange funds between your wallets and your bank account, consider getting an online wallet. These online wallets will allow for instant exchange between currencies at all times.
If you’re willing to put in a little more work, it might be beneficial for you to have an offline wallet. These wallets are typically hardware devices that connect directly to your computer. Offline wallets are considered more secure because they aren’t connected to other computers and can’t be hacked remotely. However, they also require a regular backup—if your offline wallet is lost or damaged, you’ll lose all of your funds. There are different options for setting up an offline wallet as well; some come preloaded with several currencies and can easily store other currencies later if necessary.
If you’re going to be holding large amounts of funds, it might make sense for you to have a paper wallet. Paper wallets are physical documents that contain two codes: one public code and one private code. The public code is considered your address—this is what people will use to send you funds. Your private code is used for spending and should never be given out. Be aware that if you share your private code with someone else, they can access all of your money in that wallet, so it’s important that you keep them safe and secure.
Buy Ethereum using Coinbase
Buying a cryptocurrency is actually quite simple. All you need is an online currency exchange account and a virtual wallet. Then it’s as easy as transferring dollars (or whichever local currency you use) into your exchange account and exchanging it for BTC or ETH (bitcoin or Ethereum). From there, send your new coins to your virtual wallet. And that’s pretty much all there is to it. To make sure no one steals them from you, be sure to set up 2FA security features on all of your accounts before buying any coins. Not only will these keep people out if they get their hands on your password or private key, but they also prevent account hacking and theft of funds that might occur without them enabled.
Step 2. Once you have some BTC or ETH in your exchange account, you’re ready to purchase some of your desired cryptocurrency. For example, if you want to buy litecoin (LTC), then go ahead and click on it in your exchange’s order book. It will show a price chart showing its value at different points in time, as well as current buy and sell prices. Click sell if you want to start buying LTC now and selling it later when its price rises; alternatively, click buy if you think its price will fall over time and are looking forward to making a profit by buying at a lower price and selling higher.
Buy EthConnect using Changelly
Changelly is a site that allows you to swap various cryptocurrencies, like Ether and Ethereum Classic. If you want to get started with EthConnect, simply buy Bitcoin using a credit card or other payment method, then use Changelly to exchange it for ETH. Once you have your ETH in hand, transfer it over to an exchange like IDEX and buy some EthConnect. The amount of ETH you’ll need will vary depending on how much EthConnect costs at that moment in time—but 1–2 ETH should be enough for now. After purchasing some coins, simply sit back and watch them grow!
Once you’ve got your EthConnect and have transferred it over to an exchange like IDEX, it’s time to sell. The key here is not so much timing—as you can see from my graph, I’ve often sold at a loss—but consistency. Make sure you sell some coins every day of about $500 worth (0.1 ETH) and more on days where EthConnect is doing well in order to maximize your profits! If possible, never spend any of your profits but always reinvest them back into trading. As long as you keep selling $500 worth of EthConnect a day, even if it costs you money sometimes, then eventually you should make enough profit that your overall balance becomes positive. Once that happens, congratulations!
Start Trading On Binance Exchange
To get started trading cryptocurrency on Binance, head over to their homepage and sign up for an account. Once you have your account created, you’ll need to verify your information and set up two-factor authentication (2FA). This step is important—when you’re managing assets that are worth thousands of dollars it’s best not to leave things open for hackers. After your profile is established and verified, log in. Make sure you remember your password as well; if you lose access to your account it will be impossible for you to recover what’s inside it. When logged in, select Funds from the top menu bar, then Deposits Withdrawals from within Fund Management.
Next, locate your cryptocurrency of choice (we’ll be using Ethereum for our example) and click Deposit. You’ll be shown an address to send your tokens from a wallet you control. Choose a reliable wallet such as MyEtherWallet or Jaxx, transfer your ETH into it, then head back over to Binance and click Exchange at the top right. Now, select ETH from under Select A Pair in the left side column and search for ETH/BNB in the right side column. Enter the amount of ETH you deposited earlier and select the Buy button at bottom of the screen. Your order will be filled immediately since Binance offers low fees and quick transaction times. Once you have ETH purchased on Binance, it’s time to go shopping!
Go back to Binance’s Deposits & Withdrawals page and click ETH. In an Ethereum wallet outside of Binance, transfer ETH you bought earlier from your new exchange account into it. Be sure not to send any ERC20 tokens from exchanges like Coinbase or Gemini; do that from a wallet where you control your private keys only (do not store money in Coinbase). When your deposit arrives in your Ether wallet, search for DBC/ETH on Binance and trade it for a small portion of DBC. You can buy using all of your ETH, or just a fraction—the choice is yours! Once you have some DaBucks tokens, sell them back for Ethereum at 50% higher than what you paid!
Withdraw Funds From Binance To Your Wallet
As a trader, you’ll eventually want to withdraw funds from your exchange account and hold them in your wallet. There are two options for doing so: withdrawing directly from your exchange or through an intermediary. It’s up to you which option you choose, but keep in mind that transactions will usually require more time if done through an intermediary (which incurs fees) than if done directly by withdrawing funds from your account at Binance. Also note that some exchanges will only allow certain types of accounts (e.g., personal vs. business) to withdraw via bank transfer or other intermediary methods. Check out our guides on how to make a cryptocurrency deposit and how do I withdraw my coins? for more details and tips about paying withdrawal fees!
If you want your funds immediately (and don’t want to pay withdrawal fees), it’s best just to withdraw directly from your Binance account. Your withdrawal options will depend on which coins you hold in your account—you can see a full list of available withdrawals by clicking Funds and selecting Withdrawal. Some assets may only be withdrawn as an Ethereum token, while others may allow you access to their wallet addresses so that you can withdraw them yourself. Always make sure that you select an option appropriate for whichever coin(s) you hold, or else it may be difficult (or impossible) for anyone but Binance support staff to help retrieve lost funds!