How to Buy Cryptocurrency as a Beginner? Complete Bitcoin Beginner's Guide and Exchange Selection

Basic Process of Buying Crypto

For beginners looking to enter the crypto market, the first question is often: where do I start? In fact, regardless of which trading platform you use to buy crypto, the process generally follows the same steps, with differences in fees, supported coins, user experience, and other details.

Five Core Steps to Buying Crypto:

Step 1 - Confirm Your Exchange Choice
Different exchanges suit different investment needs. Some specialize in spot trading, others focus on futures derivatives, and some are hybrid platforms. The first step is to decide which type of exchange to use based on your investment goals.

Step 2 - Complete Platform Registration and Identity Verification
Most exchanges require new users to undergo KYC verification (real-name authentication). This is to comply with financial regulations in various countries. After submitting identity proof and related documents, approval usually takes 1-3 business days.

Step 3 - Deposit Funds into Your Trading Account
Once verified, you can fund your trading account. Most exchanges support fiat deposits (such as TWD, USD) or deposits with other cryptocurrencies. Common deposit methods include bank transfer, online banking, and credit card.

Step 4 - Place Orders or Purchase Crypto
After funds arrive, you can start trading. Whether buying spot or trading contracts, the platform provides corresponding order tools. Beginners are advised to start with simple spot purchases.

Step 5 - Withdraw Funds or Convert
After trading, you can choose to store assets in your account in stablecoins or withdraw directly to your bank account. Withdrawals typically take 1-3 business days.

Choosing a Crypto Purchase Method in Taiwan

Local Taiwanese exchanges mainly include several platforms, all supporting TWD deposits and withdrawals, making them relatively friendly for Taiwanese users. However, trading fees are generally higher, and the number of supported coins is more limited.

These platforms operate in a centralized manner, managing user assets and data through a unified platform. The advantage is a relatively simple trading experience, but the risks include platform hacking and lower privacy protection.

Understanding Different Types of Trading Methods

To buy crypto, first understand the different trading methods available in the market. Each has its suitable scenarios and risk characteristics.

Centralized Exchanges - The Most Widely Used Choice

Centralized exchanges are like traditional stock brokers, where user assets are held in custody by the platform. They match buy and sell orders to complete transactions.

Features of Centralized Exchanges:

• Deep liquidity and many trading pairs
• Good liquidity, orders are easily filled
• Easy to operate, suitable for beginners
• Relatively higher trading fees
• Platform risks (hacking, exit scams, etc.)
• Limited privacy protection

The main steps for buying crypto: first purchase stablecoins like USDT with fiat, then exchange stablecoins for Bitcoin or other target coins.

Decentralized Exchanges - Focus on Privacy and Security

Decentralized exchanges use smart contracts to automatically match trades, with no central platform control. The process is fully transparent, and users hold their private keys, truly owning their assets.

Features of Decentralized Exchanges:

• Fully transparent, no censorship
• No KYC required
• Users manage their private keys, high asset security
• More complex operation, requires wallet knowledge
• Less liquidity, slower transaction speeds
• Lower trading volume

Using DEXs requires preparing a crypto wallet and conducting peer-to-peer transactions via blockchain. Suitable for investors with technical skills and privacy concerns.

Derivatives Trading Platforms - Designed for Professional Traders

Derivatives platforms offer products like futures, options, and leveraged tokens. Investors do not need to hold actual assets but speculate based on price movements. Both long and short positions are possible, offering maximum flexibility.

Features of Derivatives Trading:

• High leverage (usually 1-100x)
• Two-way trading, profit from both rising and falling markets
• Low account opening barriers, small capital can start
• Many trading opportunities, suitable for short-term trading
• Higher risks, requiring risk management knowledge
• Potential for liquidation risk

Derivatives trading uses margin to leverage positions. For example, with 1x leverage, investing $100 controls $100 worth of Bitcoin; with 10x leverage, $100 margin controls $1,000 of assets. Higher leverage means larger potential profits and losses.

Spot Trading vs Derivatives Trading - How to Choose?

Both methods have advantages and disadvantages, suitable for different strategies.

Spot Trading involves buying real crypto assets and storing them in a wallet. Suitable for those who believe in Bitcoin’s long-term value and plan to hold for a period of time or years. It requires more initial capital but has relatively controlled risks.

Derivatives Trading focuses on price volatility. No need to buy actual assets, just predict price directions. Ideal for traders with technical analysis skills who want to profit from short-term fluctuations.

Comparison:

Spot trading is suitable for long-term holders and asset appreciation, with a one-way approach (buying long), requiring more capital. Derivatives trading is better for short-term traders and professional investors, offering two-way trading opportunities with lower entry barriers.

Important Considerations Before Buying Crypto

Clarify Your Investment Goals
Beginners should start by buying spot Bitcoin on a reputable centralized exchange. These platforms have large user bases, deep liquidity, fast order execution, and better stability.

If you prioritize privacy and asset security, and are willing to learn technical operations, decentralized exchanges are a better choice.

If you have some trading experience, confidence in market judgment, and want to amplify gains, consider derivatives trading. But be sure to fully understand leverage risks and avoid blindly increasing leverage.

Risk Control Is Key
Bitcoin’s price can fluctuate 20-30% in a short period. Before investing, assess your risk tolerance. Regardless of the trading method, always set stop-loss and take-profit points for each order to avoid irrational decisions driven by greed or panic.

For leveraged trading, be especially cautious. A conservative approach is to start with small amounts in demo or real trading to familiarize yourself with the platform and process before increasing your investment.

Trading Strategies for Different Investment Cycles

Super Short-term Traders: Use intraday swing trading, buying low and selling high multiple times within a day. This requires frequent market monitoring and strong technical analysis and psychological resilience.

Short to Medium-term Traders: Trade based on pre-set stop-loss and take-profit ratios, holding positions for days to weeks. Suitable for those with some analysis skills aiming for short-term gains.

Long-term Investors: Make decisions based on Bitcoin’s fundamentals and macroeconomic trends, holding for months or years. Usually buy on spot exchanges and store in personal wallets for long-term holding.

Summary and Recommendations

Buying crypto isn’t complicated; the key is to clarify your investment goals and risk appetite.

For Beginners:
Choose a reputable centralized exchange → complete identity verification → fund with fiat → buy stablecoins → exchange for Bitcoin or other target coins → trade according to your plan or hold long-term.

Long-term Bitcoin investors can buy spot on local or international exchanges, which are generally safer and more reliable.

Experienced traders seeking higher risk and returns can try derivatives platforms offering futures or contracts.

No matter which method you choose, remember: the crypto market is highly volatile and may result in principal loss. Fully understand the related knowledge before buying, set reasonable stop-loss and take-profit points for each trade, and adjust your strategy flexibly based on market conditions. Most importantly, only invest funds you can afford to lose.