Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
How to buy altcoins online
In this beginner’s guide we cover the basics of getting your first altcoin. Follow a step by step guide to making your first purchase, take a look at the future prospects of the sector as a whole, and get help on the best time to invest.
Compare the best altcoin trading platforms
To buy an altcoin now you should use one of the brokers below. You can learn more about the specific features of each one by reading our detailed reviews, or simply navigate to their website from the links in the table to get started. Otherwise, scroll down to learn more about buying altcoins first.
How to buy altcoins online – a step-by-step guide
Step 1. Decide which coin to buy
If you’re new to crypto and have previously only invested in Bitcoin, then it might be best to start with a well-known altcoin such as Ethereum and Dogecoin. Alternatively, if you have a large crypto portfolio already, or are looking to put money into smaller coins in anticipation of future gains, then it can pay to research some newer/smaller projects with potential.
Step 2. Choose an exchange
Regardless of which altcoin you want to buy, the best option is always to use a cryptocurrency exchange. An exchange is a marketplace that lets you buy or sell coins with other users, with the current market rate determined by activity on the platform.
Each exchange has a unique set of features and has a different set of coins available. While most offer all the leading altcoins, it might be more difficult to find one that lets you buy a brand new, smaller coin. The exchanges below offer a broad range of coins and are simple for beginners to get to grips with.
- Binance: Binance is the most popular exchange platform and it offers one of the widest range of coins as well. You either can dive straight into the main exchange or download a slimmed down, beginner-friendly ‘lite’ app to start with. Sign up with Binance now >
- Bittrex: Bittrex is another exchange that’s simple and easy to use. It prides security above all else and offers hundreds of different coins, from the leading cryptos to small altcoins. Join Bittrex today >
Step 3. Sign up and create an account
In order to use an exchange, you have to set up an account first. This process is simple and should only take a few minutes. You will need to provide some personal details and contact information, like an email address, and most platforms require a form of ID to verify the account.
Step 4. Deposit money
Most of the top exchanges accept deposits in fiat currency (such as GBP or USD), so the easiest way to fund your account is via a bank transfer or credit/debit card. Note that this usually comes with a fee of around 1-2% for bank transfers and 3-5% for cards.
Some exchanges only operate in cryptocurrency. In those cases, the easiest way to fund your account is with Bitcoin. You should learn how to buy that first, and then deposit your new coins into the exchange account.
Step 5. Purchase your altcoin
To find the right coin you need to search for its ticker symbol. If you were looking for Ethereum, the ticker would be ETH. Then you’ll be able to see a list of ways to pay for it, which are normally presented in pairs. The ETH/GBP option, for example, is the one where you can exchange your pounds for Ethereum.
There are usually two ways to buy a coin. With the ‘market’ option you can buy it instantly at the current market rate, while ‘limit’ means you can set the price at which you want to buy and the platform will execute your trade when the market rate hits that level.
As soon as the purchase has gone through, the coins will be credited to your account. You can see your holdings by going to the ‘wallet’ section of your account, and you can hold a range of different altcoins at once.
Step 6. (Optional) Get a crypto wallet
Many people simply leave their coins in the exchange account. However, if the exchange were to be hacked or the victim of some malicious activity, those coins could be lost. An alternative option is to transfer the coins you buy into a dedicated cryptocurrency wallet. These are separate applications that are like online banking apps and store your money behind a pin code or password.
Like with exchanges, there are lots of them and each has a different set of features. Most are free and online but some are physical devices that you plug into your computer. The two wallets below are both available online and simple to set up even if you’ve never used one before.
- Freewallet: Freewallet is an online wallet that lets you store your coins and manage them through a web browser or dedicated mobile app. It can hold multiple different altcoins at once and, as the name suggests, is completely free. Join Freewallet >
- CoolWallet: CoolWallet is a combination between hardware and online wallets. It comes with a small, card-like, device that stores your coins. You manage them via an app that connects to the device over bluetooth. Get CoolWallet now >
How to trade altcoins online – a step-by-step guide
Step 1. Find a CFD broker
Day trading refers to the practice of using contracts for difference to buy and sell coins many times over the course of the day. This strategy requires an online broker. You want to find one that offers free trading or charges a low fee per trade, otherwise it can become a very expensive approach.
Brokers are easier to use than an exchange. You can buy or sell coins instantly at a set price and you never have to handle any cryptocurrency. Instead, a CFD is just a note that represents the price of a coin and you make money based on how that changes. The two brokers below offer this form of trading with some of the lowest fees around:
- eToro: eToro is a CFD broker that lets you trade all of the leading cryptocurrencies. You can sign up and get started very easily, and trade either online or via its excellent app. It also boasts a social trading feature so you can discuss tips and learn from other users. Sign up with eToro >
- Plus500: Plus500 is another CFD broker that offers cryptocurrency as well as a range of other assets. You can create an account in seconds, then begin trading CFDs on all the top cryptos. Join Plus500 now >
Step 2. Set up and fund your account
You have to create an account before you can use a broker. The process is much the same as an exchange, where you have to provide some personal information, contact details, and attach a form of photo ID. Then you can add money to your account through a bank transfer, a card payment, or by sending money from PayPal or another payment provider.
Step 3. Learn how to perform technical analysis
Price analysis is the foundation of a successful day trading strategy. This means studying historical price charts to look for trends and then using these to predict how the coin might perform in the future. The most basic of these are ‘support’ and ‘resistance’ levels, which are usually signals to buy and sell, respectively.
There are lots of different indicators in total and you can mix-and-match them to create your own unique strategy. You can find out more about the different forms of analysis in detail in our education section, or take the course on short term trading to learn how to interpret them.
Step 4. Decide whether to buy or sell
An advantage of CFDs compared to buying coins outright is that they give you more flexibility. You can use them to ‘short’ an asset, which means selling the CFD now in order to buy it back later at a lower price, as well as to buy it. Choose which position to take based on your analysis. If that leads you to believe a coin is going to rise in value, you should go ‘long’ (buy). If the reverse is true, then you can ‘short’ (sell) it.
Step 5. Execute the trade
Choose how much money you want to stake and then hit ‘buy’ or ‘sell’ to finalise your trade. You can now see it in the ‘open positions’ section of your account. Your work doesn’t end there, however. You should immediately start analysing the price again to work out when to close the trade by taking the opposite position.
That’s because a key part of trading is being active and sticking rigidly to your plan. The idea is to make lots of trades and earn a small amount of money on each trade, rather than achieving one or two big wins.
Should I invest in altcoins?
That depends on the state of the cryptocurrency market and whether you have a particular coin in mind. Altcoins collectively perform better when the whole market is trending upwards and they’re often the first casualties when sentiment starts to turn. Take time to research a coin before you put money into it so that you understand the factors that might affect its price.
Day traders should also stay on top of the latest news and trends because hype plays a large role in how an altcoin’s price fluctuates. Many of them have a small market cap, which makes them more volatile to small flurries in activity. A single tweet from a famous name or a few posts on a messageboard can cause dramatic swings in price.
If you still aren’t sure whether altcoins are for you, don’t worry. It’s a good idea to take some extra time before you put your money into something new. Here is a list of their main pros and cons, followed by a few final questions to help you decide.
- There are thousands of different altcoins available
- Many coins are cheap and can see dramatic increases in value over a short period of time
- You can earn interest or other rewards for holding some coins
- Some coins can be used as a means of payment to purchase items online
Finally, here are three more questions to consider before you invest in altcoins.
1. Is now a good time to buy an altcoin?
That depends on which coin you’re interested in. Before you do anything you should research that cryptocurrency in more detail and investigate the project behind it. Then you can decide whether to buy now or wait for a better opportunity.
Then you need to consider what your goals are. Do you want to buy and hold coins in the hope that they appreciate over time? Or are you more interested in trading them to try to make a quick profit? That shapes whether you should consider the overall potential and quality of a project or simply focus on technical analysis of the coin’s price.
Here at Invezz we regularly perform our own analysis of different cryptocurrencies that have been in the news. You can find our latest altcoin features below, and you can use these articles to get an idea of the indicators you should look out for, as well as part of your background research.
Bitcoin price analysis for May
Litecoin could be one of the best performers in the upcoming days. Here are the next targets
Ethereum could advance even more in the ongoing bull market. Here are the next targets for buyers
2. What problem do altcoins solve? What are their future prospects?
Between them, altcoins solve all sorts of different problems. There are coins that offer financial services without the need for a bank, ones that support innovative new video games, and ones that offer alternative forms of file sharing that don’t rely on the benevolence of Big Tech firms.
There are many more on top of that and their prospects can be quite different depending on the level of competition and how serious their project is. For example, it’s unlikely that many Dogecoin-imitators can maintain value in the long term but it is possible that coins which solve a practical problem, like ones that offer an alternative form of digital advertising, can succeed.
In a broader sense, all altcoins rely on cryptocurrency becoming more mainstream and easier to access. Any regulation of the space or negative news stories can adversely affect the entire market. Use the links below to stay up to date with the latest developments.
COTI to issue new stablecoin for Cardano ecosystem
Ethereum price prediction: Is ETH a buy or sell this week?
Enjin (ENJ) price analysis: is October a good month to buy this cryptocurrency?
3. Do you want to invest in altcoins for the long term?
The answer depends on what sort of investor you are and which coins you’re interested in. It can also change, as if the market is trending up it’s better to hold, while more turbulent times can suit a short term trading strategy. Here are some final considerations for each different approach.
Considerations for a long term investment strategy
If you have picked a coin that you expect to increase in value over time, then you should dive in and get some straight away. The best way to do this is to pick an exchange and then find a wallet to store your new coins in.
Considerations for a short term trading strategy
This approach means finding a platform that makes it cheap and easy to make lots of moves. For the more mainstream coins, you can use a broker to do this and you should brush up on technical analysis to identify the right time to buy and sell.
Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >