If you want to start buying some crypto, one of the fastest ways is by signing up to Coinberry (and start for as little as 50 CAD). You can start by downloading their app, creating your account, verifying your identity, funding your account, and buying some crypto (they support 29+ cryptocurrencies and tokens).
What is a crypto platform?
Before we talk more about Coinberry, it helps to understand first what a crypto platform is, how it works, and how it makes money. This way, you’ll make a more informed decision when starting your crypto investing journey.
First, what is a crypto platform? This is where you can buy and sell cryptocurrencies and tokens. Its role is to facilitate and process transactions. It’s like a stock trading app where you can buy and sell shares. When investing in stocks, you buy shares at what you think is a low price (or undervalued) and you sell them at a higher price (“Buy low, sell high”). Similarly, when you buy some crypto, you hope or expect its price to rise in the near future or long term. You make a profit when you buy some crypto at a low price and sell it later at a higher price.
Right now, there are hundreds of crypto platforms and thousands of cryptocurrencies and tokens. Many of these crypto platforms support dozens of tokens and cryptos. This way, investors will have several options, and they can easily shift their funds or rebalance their portfolios according to the movements of the crypto market.
For example, if Bitcoin’s price is getting too high or has already reached its peak for this month, investors might want to sell it, take the profit, and buy other cryptos that are cheaper (which may increase in value a bit later). With proper execution and luck, investors can make money by regularly rebalancing their portfolio (sell when high, buy other cryptos at low prices).
As a result, it’s important for a crypto platform to support dozens of cryptos and tokens. This way, investors can make their strategies more responsive and dynamic according to market trends. In addition, beginners will also have several options as to where to start and which crypto they should first buy (such as when the prices of Bitcoin and Ethereum are too high when they start, so they might want to consider buying less popular cryptocurrencies).
How do crypto exchanges work?
As mentioned earlier, a crypto trading platform or a crypto exchange facilitates and processes buy and sell transactions. In other words, it acts as an intermediary or a middleman between buyers and sellers.
Perhaps you’ve already heard about how cryptocurrencies and blockchains are peer-to-peer, decentralized, and there’s no middleman. But in crypto platforms, they act as a middleman. How do we make sense of that and is a middleman always necessary?
There are other ways (that don’t require a middleman) to earn crypto such as through crypto mining and storing crypto through a physical or hardware wallet (this looks like a USB drive). However, this requires some technical know-how and several precautions so you can protect your digital assets.
Many beginners and investors might not be willing to learn those technical details. They might just want to quickly buy some crypto and get into action. To do that, a fast and easy way is to use a crypto exchange platform. The entire process is straightforward and intuitive, just like creating a new email address and opening a new bank account. Instead of figuring out the technical details, investors can go straight to buying some crypto and focus on analyzing the trends. Later on, they can always learn more about cryptocurrencies, physical crypto wallets, and blockchains. But for now, it might be enough for them to invest and see the results.
How do crypto exchanges make money?
As an intermediary, a crypto platform usually makes money from transaction fees. Similar to banks and payment network processors such as Mastercard and Visa, they take a small percentage of the total transaction amount as payment. This way, they can sustain their businesses, make a profit, and improve or expand their services.
Similarly, many crypto platforms take a small percentage of the total transaction amount (which may reach up to more than 3% depending on the transaction amount and mode of payment). There could also be a small flat fee that usually applies to transactions under $100 or $200. In these cases, the platforms make money with each transaction (including each deposit and withdrawal), which comes at the investor’s expense (higher transaction fees mean less money available for buying more crypto).
On the other hand, there are also other crypto platforms that have no deposit and withdrawal fees. Instead, they make money by buying discounted crypto from several providers and then selling that crypto at the listed prices. In other words, they make money “behind the scenes,” and as a result, customers get to keep more of their money and use that to buy more crypto.
Which crypto platform has the lowest fees?
When choosing a crypto platform, it helps to study its fee structure so that you know exactly what you’re paying for and you can better estimate and calculate your ROI.
As mentioned earlier, many platforms charge a small flat fee or a small percentage of each deposit, withdrawal, and other transactions. There are also other platforms such as Coinb erry that have zero CAD deposit and withdrawal fees. In this case, it makes sense to choose a platform that can help you save money and help you buy more crypto.
As crypto investing becomes more competitive (and many more platforms are sure to enter the market), expect the fees and charges to become lower so that those platforms can attract more customers or retain their existing ones. This way, customers will get more value out of their money, and further take advantage of the rapidly evolving crypto market.