How to Buy Your First Crypto
To buy your first crypto, choose a venue that accepts your jurisdiction and verify that in its own terms of use. Size the purchase as money you are prepared to see fall by half. Then decide, before buying, whether the coins stay on the exchange or move to a wallet you control.
Covered on this page, for traders outside the US: BYDFi, WEEX and Blofin.
The order of decisions matters more than the choice of coin. Venue, then size, then custody — and the last one is the one most people leave until something has already gone wrong.
Before you start
A venue that accepts your jurisdiction, confirmed in its own terms. Not in a review or a comparison table. Exchanges publish restricted-territory clauses and several large ones exclude US persons entirely.
An amount you could watch fall by half. Not a target, a tolerance. Drawdowns of that size have happened repeatedly in this asset class and are not exceptional events.
A decision about who holds the coins afterwards. Exchange or your own wallet. Deciding this before buying avoids the position where you are learning custody under pressure.
The steps
1. Choose the venue before the coin
The venue determines what you can buy, what it costs, and whether you can withdraw. The coin is a smaller decision made inside those constraints.
2. Read its restricted-jurisdiction clause yourself
Find the terms of use and the section listing restricted territories. This takes two minutes and is the difference between an account and a locked account.
3. Size it against a halving, not against a target
Write the figure down before funding. This asset class has produced falls of that scale more than once, and the sizing has to assume it rather than hope against it.
4. Start with the largest two
The two largest by market value have the deepest markets and the tightest spreads. Smaller coins add liquidity risk on top of price risk, and you can add that later deliberately.
5. Understand what an exchange balance is
The exchange holds the coins and owes you a balance. That is a counterparty relationship, and it is a different thing from possessing the asset.
6. Decide on self-custody with both eyes open
A wallet you control removes the counterparty and adds the risk of losing the key. There is no recovery process and no support line. Both options carry a real risk; pick which one you prefer.
7. Price the fees before you trade rather than after
Trading fee both ways, the spread, and the withdrawal fee. Add the three together for the buy and the eventual sale — that total, not the headline trading fee, is what a round trip costs.
8. Check the depth before sizing anything unusual
A quoted price on a thin market is not the price you will receive. Volume tells you whether your order is the market or a participant in it.
A halving is not a worst case here. On monthly closes since September 2014, Bitcoin has twice fallen about three quarters from a record: 75.6% to January 2019 and 73.0% to December 2022. The monthly closes behind this chart are published.
How to tell it worked
Check five things within 7 days of your first purchase.
One: you read the venue’s restricted-territory clause yourself. Not a summary of it. This is binary and it is the only step with a legal dimension.
Two: the amount matches what you wrote down. If the position grew between deciding and buying, the sizing rule was decorative.
Three: you can state where the coins are held and who controls the keys. If the answer is unclear, custody has not been decided, it has been deferred.
Four: you know the withdrawal fee. Many people discover it at the point of leaving.
Five: nothing you bought required a smaller coin to make the case work. Starting in a thin market adds a second risk to a first purchase that already has plenty.
Why custody is the decision that matters
Both options have failed people, in opposite ways. Exchanges have frozen withdrawals and failed outright, taking customer balances with them. Self-custodial wallets have lost coins permanently to misplaced keys, with no recourse of any kind.
So the question is not which is safe. It is which failure you are better placed to prevent. An exchange failure is outside your control entirely; a lost key is inside it, and it is preventable with a written backup stored properly.
Deciding this before buying is the whole point of step six. Afterwards, the decision gets made under time pressure and usually by inertia.
The original data
Of the 24,971 unique videos in this site’s search study, 411 have an instruction-shaped title mentioning crypto, at a median of 24,684 views across 275 channels, with a maximum of 4,284,132. Bitcoin and the wider category appear in 1,076 titles overall. A video that turned up in more than one search is counted once.
411 instructional videos across 275 channels is a crowded, widely distributed subject. Almost every creator has made one, which means the marginal value of another explanation is low and the useful contribution is the part they mostly skip — the venue terms and the custody decision.
The answer is that a double is not a reason. The size you wrote down in step three was chosen without reference to the price, and a move that has already happened does not change what you can afford to watch fall. Buying more because it rose is the position being sized by the chart instead of by you.
When it fails
A flat stretch is where first-time buyers do the most damage to themselves. The large coins go nowhere, patience runs out, and the money migrates into smaller and thinner ones where something is always moving. That adds liquidity risk, venue risk and often outright fraud risk on top of a position that was already volatile — and it happens during the calm periods rather than the dramatic ones.
The second failure is funding a venue that excludes your jurisdiction. It surfaces at withdrawal.
A third is leaving custody undecided. Deferral is a decision to stay with the exchange.
A fourth is sizing to a target rather than a tolerance. The tolerance is what gets tested.
A fifth is ignoring the withdrawal fee. It can exceed a small purchase entirely.
And a sixth is trading a thin coin at size. The quoted price and the filled price are different numbers.
Related
Crypto covers what the asset class is and how it differs structurally from equities. Wallet explains what holding your own keys actually involves. And cold wallet is the offline version and the trade-offs it carries.
Read the venue’s own terms of use before funding anything, rather than a review of them. People trade for months on platforms whose terms exclude their country the whole time, and that only becomes a problem at withdrawal. Withdrawal is the only moment that actually matters.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money. Some links on this page earn a commission if you buy through them. It costs you nothing and it does not decide what appears here or in what order — how these pages are made is set out in our methodology.