How to Buy Cryptocurrency: A Step-by-Step Beginner’s Guide

You have watched the price moves, seen crypto in the news, and decided it is time to get started. You are ready to buy your first Bitcoin or Ethereum, but the charts and technical terms can feel like a foreign language.

The reality is that buying cryptocurrency today is similar to opening and using a mobile banking app. In this guide, we will walk through how to buy cryptocurrency using CoinJar. You will learn how the market works, how to secure your account, and what to check before you tap “Buy.”

Understanding the Marketplace

Before you buy, it helps to know what you are buying into. Most beginners start on an exchange, which is also known as a spot market.

A spot market is a place where assets are bought and sold for immediate delivery. When you buy crypto on a spot market like CoinJar, you trade your government-issued money (fiat currency such as USD) for a specific cryptocurrency at the current market price.

You are not placing a bet on the future price. You are buying the actual asset. Once the transaction settles, you own the crypto. You can hold it, spend it, or move it to a private wallet.

How it works in practice

Buying cryptocurrency usually follows four basic steps: registration, verification, deposit, and trade.

1. Registration

First, download the CoinJar app. (Make sure you are in a state where CoinJar operates.) Then, create an account. On CoinJar, you sign up with a valid email address and choose a strong password.

Since this account will hold money, make your password unique and hard to guess. Avoid using the same password you use for email, social media, or streaming services.

2. Identity Verification (KYC)

After you sign up, you cannot trade right away. You need to complete a process called Know Your Customer, or KYC. Legitimate exchanges use KYC to confirm who you are and to meet legal requirements.

To verify your account, you will usually need to upload:

• A government-issued ID, such as a passport or driver’s license.
• A selfie, so the platform can confirm the ID belongs to you.

This extra step can feel annoying, but it is a good sign. It means the platform is taking fraud, crime prevention, and user safety seriously.

3. Depositing Funds

Once your identity is verified, it is time to add money. On CoinJar, you can deposit local currency with a wire transfer (or ACH for instant purchases).

Check the fees and limits before you choose.

4. Placing the Trade

When your account is funded, you can place your first trade. Go to the “Buy” button (or the “Trade” button in the bottom middle), choose the cryptocurrency you want, such as Bitcoin or Ethereum, and enter the amount of local currency you want to spend.

You will see the current price and any fees before you confirm. When you approve the trade, your cash balance goes down, and your crypto balance goes up, usually within seconds. You can check your account on CoinJar by pressing “Portfolio” at the bottom of your screen.

Keeping Your Assets Safe

Owning cryptocurrency comes with extra responsibility. Blockchain transactions are designed to be final, so once a transaction is confirmed, it usually cannot be reversed.

Because of this, security is critical. Treat your crypto accounts with the same care as your online banking, and then some.

Two-Factor Authentication (2FA)

Turn on Two-Factor Authentication as soon as your CoinJar account is set up. 2FA adds another step to the login process.

With 2FA, even if someone learns your password, they still need a code from your phone or authentication app to sign in. This makes it much harder for someone to gain access to your account without permission.

Account Recovery

One advantage of using a centralized exchange like CoinJar is that you are not on your own if you lose access to your account.

In a “self-custody” setup, where you store your own private keys on a hardware wallet or other device, losing your password or recovery phrase often means losing your crypto forever. There is no reset button.

With an exchange, your assets are held in your account, and CoinJar can help you recover access. If you forget your password or lose your 2FA device, you can reach out to CoinJar Support. You will need to prove your identity again, which may be a detailed process, but you are not automatically locked out of your funds for good.

Risks, Red Flags, and Security

Buying crypto through a trusted exchange can be straightforward and safe, but the wider crypto world contains real risks. Knowing the basics can help you avoid common traps.

Recovery Scams

Be very careful of any person or service that claims they can recover lost or stolen crypto for a fee. If you send funds to a scammer, or if your wallet is compromised, no one can simply “hack the blockchain” to give your money back.

Crypto transactions are designed to be permanent. So-called “recovery agents” that say they can reverse transactions are almost always running an extra scam to take even more money. Only use official support channels from the exchange you actually use, and ignore unsolicited offers.

Volatility

Cryptocurrency prices can move fast, both up and down. A coin can gain or lose a large percentage of its value in a single day.

Because of this volatility, only invest money you can afford to lose. Short-term price swings are normal in crypto, so avoid making emotional decisions based on sudden moves.

Tax Implications

In many countries, including the United States, cryptocurrency is treated as property or an asset for tax purposes. That means a taxable event may occur when you:

• Sell crypto for fiat currency (for example, selling Bitcoin for USD).
• Trade one crypto for another, such as swapping Bitcoin for Litecoin.
• Spend crypto on goods or services.

Tax rules can be complex and can change over time. Keep clear records of your transactions, including dates, amounts, prices in USD, and any fees you paid. Knowing your cost basis, which is what you originally paid for the asset, is important when you report gains or losses later.

You can also obtain crypto tax software that keeps track of all your transactions and automates reporting for you. Examples are CoinLedger and Koinly, to name a few.

Summary

Buying cryptocurrency is a modern money skill that most people can learn in an afternoon. By choosing a reputable platform like CoinJar, completing identity verification, and turning on security tools like 2FA, you can make your first purchase with confidence.